The Open Network for Digital Commerce (ONDC) project was launched by the government in April last year with an aim to democratise e-commerce. ONDC works on open-sourced methodology and enables small retailers and stores to sell their products or services directly to customers.
What is ONDC?
ONDC is an open e-commerce protocol introduced by the Department of Promotion of Industry and Internal Trade (DPIIT) of the Ministry of Commerce. The network enables buyers and sellers to interact with each other without the need of a third-party application. Sellers through ONDC can become visible to customers across the country who are using any of the partner applications.
How is it beneficial for customers?
Buyers can explore and buy a wide range of products from various brands and local businesses. Products across categories including food and beverage, beauty and personal care, home and decor, electronics, and fashion have been made available for buyers through ONDC.
In order to shop through ONDC, customers can open buyer applications such as Paytm, Mystore, Craftsvilla, Spice Money, Meesho, Magicpin, and Pincode.
A buyer just needs to open the buyer application and search for the desired product. The application also displays the nearby local stores and retailers based on the customer's location. After selecting the store, one can explore the prices and place an order.
Benefits for sellers
ONDC allows sellers and local businesses to compete with e-commerce giants such as Flipkart and Amazon through ONDC. The network makes them discoverable online to customers increasing their reach. Through ONDC, buyers and sellers don't need to be on the same application to carry out a transaction. A seller also doesn't have to be governed by the specific policies of an e-commerce platform and can use any ONDC-compatible application to do business.
What is the significance of ONDC?
According to Commerce and Industry Minister Piyush Goyal, ONDC will “help our small retail survive the onslaught of large tech-based e-commerce companies”. The minister said ONDC will democratize the benefits of e-commerce the way UPI helped democratize payment systems.
ONDC has been brought to make the –commerce space more inclusive for and accessible for customers, who can shop for anything from either from their preferred local business or any other retailer. The network also aims to standardize operations like order management, cataloguing, order fulfillment, and inventory management.
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