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ONDC – A game changer in e-commerce

What is ONDC?

As an alternative to the current state of e-commerce, the Indian government introduced the Open Network for Digital Commerce (ONDC) in 2021 with the goal of “Creating an inclusive ecosystem for e-commerce”. India has led the globe in showcasing the effective implementation of digital infrastructures, like AADHAAR, UPI, and others, at the population level. Another tech-based project, ONDC (Open Network for Digital Commerce), was launched to change how e-commerce operates in the nation by enabling e-commerce via an open protocol built on open-source specifications.

This program has supported and strengthened the expansion of Indian startups in addition to facilitating the quick adoption of e-commerce. Through the open protocol, ONDC enabled scalable and affordable e-commerce, enabling entrepreneurs to grow cooperatively. Hence becoming a game changer in e-commerce.

Goal of ONDC

The goal of the Open Network for Digital Commerce (ONDC) initiative is to advance open networks for any kind of digital or electronic network-based trade in products and services. Open-sourced methods, open standards, and open network protocols that are not dependent on any one platform are to be the cornerstones of ONDC.

Similar to the hypertext transfer protocol for information exchange over the internet, the simple mail transfer protocol for email exchanges, and the UPI(unified payments interface) for payments, the foundations of ONDC are to be open protocols for every step of the entire chain of activities in the exchange of goods and services.

To facilitate information sharing between providers and customers, these open protocols are utilized to build public digital infrastructure in the form of open registries and network gateways. Any suitable application of their choice might be used by both providers and customers to conduct transactions and exchange information over ONDC.

To be digitally visible and do business, the buyer and seller must utilize the same platform or application. This present platform-centric digital commerce model is therefore replaced by ONDC.

Operations like order fulfillment, inventory management, order management, and cataloging are standardized under ONDC protocols. This has freed small enterprises from platform-centric regulations and has allowed them to utilize any ONDC-compatible application or ONDC app. This has also enabled small enterprises a variety of ways to conduct business and be found on networks. Additionally, it would make it easier for people who aren’t currently on digital commerce networks to adopt digital ways.

It is anticipated that ONDC will increase customer accessibility and inclusivity in e-commerce. Customers may use any compatible application or platform to find any seller, good, or service, giving them more options and more freedom of choice. Customers will be able to match demand with the closest supply thanks to it. Additionally, customers would have the freedom to select the local businesses that they like. As a result, ONDC would drive logistics efficiency, standardize processes, encourage the use of local suppliers, and improve value for customers.

Features of ONDC

By switching from a platform-centric to an open-network architecture, ONDC, a UPI for e-commerce, aims to democratize digital or electronic commerce. Merchants will be allowed to store their data through ONDC to contact customers and develop credit histories.

Regardless of the platform or application they use, ONDC intends to enable merchants and buyers to transact through an open network and be digitally visible in this system. By dismantling organizational walls and creating a single network to spur innovation and growth, it will also enable retailers and customers, to revolutionize a wide range of industries from ondc food delivery and retail to transportation.

With open specifications and open network protocols that are not platform-specific, the new framework seeks to promote open networks built using open-sourced methodologies.

It is anticipated to increase value for customers, standardize processes, encourage supplier inclusion, digitize the entire value chain, and create efficiency in logistics.

The official statement from the government states that ONDC would take all necessary steps to protect the privacy and confidentiality of data on the network. The ONDC will not require participants to provide any transaction-level data with the ONDC. It will collaborate with participants to release aggregate, anonymized network performance measurements while maintaining privacy and confidentiality.

Hence we believe that ONDC has emerged as a great step taken by the government and shortly it can be a game changer in e-commerce.

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