What took you so long ONDC ?
With 100 sellers, Amazon made its maiden foray into India in June 2013. With a market share of 47% on the online smartphone channel, it offers 168 million products to Indian customers and sells more than 4,000 items per minute.
The Problem
This is only one side of the story, unfortunately; there are also small and medium enterprises, distributors, and retailers in India who are going through all blood, sweat, and tears to match their heavy discounts and delivery system. Navneet Pathak, joint general secretary of the All-India Mobile Retailers Association told Rest of World – “Amazon burns cash to get hold of the market. Small retailers can’t afford to do that. Small retailers are in survival mode.”
In Amazon’s defence, Jeff Bezos committed a $1 billion investment toward helping small and medium businesses digitize during his visit to India in 2020. Amazon claims it has digitized over 4 million Indian businesses and has vowed to digitize 6 million more by 2025. But, are Amazon’s sellers truly happy?
Anya Crittenton outlined five ways small businesses are being negatively impacted by Amazon’s dominance, including the way it uses data from other sellers to discover the most popular products before producing and selling its own versions. When customers swarm to mass-produced, frequently less expensive versions of products, this is referred to as copycatting and, in the worst situation, it can drive a small retailer out of business.
Small firms are essentially going through the “If you can’t beat them, join them” phase. Not so fast, though. Just like all the other revolutionary reforms the Indian government has implemented in recent years, such as UPI, Adhar, and many more, this one as well cannot be kept in place because of a foreign monopoly.
Way to go!
In December 2021, ONDC (Open Network for Digital Commerce) was incorporated as a Section 8 company established by the Department for Promotion of Industry and Internal Trade of the Government of India to develop open e-commerce.
According to the official site on ONDC, It is a network-centric model where, so long as platforms/applications are connected to this open network, buyers and sellers can transact irrespective of the platforms/applications they use. It’s like the “UPI of e-commerce”. ONDC does not require that buyer and seller must use the same platform/application to do a business transaction. Instead, Buyers will be able to access all services currently provided by various sellers on different platforms, through a common network.
Give me an example
Okay, let’s imagine you live in New Delhi and realised one morning that you were out of soap and other necessities. You switched to the Hindustan Unilever app Ushop (a registered seller on ONDC), made all the necessary selections, and made your payment through Paytm, a registered buyer on ONDC. After a short while, you noticed a Dunzo guy standing at your doorstep. Where Dunzo is also listed as having a logistics responsibility under ONDC. Now, all of the products you requested were purchased from the nearest retail store to you rather than a big warehouse owned by a giant.
So, just like Ushop, Paytm, and Dunzo there are many network participants playing an active role in building the ONDC network. Which helps the local retailers and small businesses to expand their public reach under one shed. To get the list of all the network participants on ONDC, For detail Click here.
On April 29, 2022, the pilot phase began in New Delhi, Bengaluru, Bhopal, Shillong, and Coimbatore. At the beginning of July 2022, it was extended to Noida, Faridabad, Lucknow, Bijnor, Bhopal, Chhindwara, Kolkata, Pune, Chennai, Kannur, Thrissur, Udupi, Kanchipura, Pollachi, Mannar, and Ramnathpuram.
Try watching this video that has been posted on the ONDC website to learn more about the functioning of the ONDC.
Roles of Network Participants
Buyer Interface – any technical or telephonic interface that enables a customer to find a seller, add a product to their basket, and finish the transaction.
Seller Interface – A network-based application that enables retailers and sellers to display their product catalogues and conduct business with customers.
Gateway essential features – Identify target seller application (s) based on search request and ONDC registry and broadcast search to those meeting criteria.
Technology services – Provide software and other technical add ons for the other three roles.
What are the major e-commerce domains on ONDC?
Retail Domain: Includes transactions for goods and services (such as FMCG, F&B, footwear, clothes, etc.) between individual consumers and retail establishments, digital vendors, kiranas, etc.
Wholesale Domain: Includes business dealings between manufacturers, distributors, and wholesalers of goods and retailers (ex: FMCG, F&B, footwear, apparel, etc.)
Logistical Sector: To facilitate the physical transfer of goods from seller to buyer, including transactions between individuals, retailers, wholesalers, and logistics service providers. Then, further areas will be explored, including those for food delivery, reservations for vacation, etc.
What next?
More than 20 government and business organisations have confirmed investments totalling Rs. 2.55 billion after understanding this strategy. According to the economic times today around 80 firms are trying to integrate market players. Just like UPI, ONDC could also be proved as the digital revolution in India. Small and medium-sized businesses will be able to connect with clients in every village and town in the nation, according to Dr. Dinesh Tyagi, MD of Common Service Centre (CCE). Seeing the vision and progress of ONDC, experts believe that India’s e-commerce market is expected to reach 200 billion dollars by 2026.
More Resources :-
1. How ONDC Helps Your Business Grow?
2. How ONDC seeks to democratize digital commerce.
3. Robin Lewis, explained the monopoly and problems faced by sellers in his article “The Amazon Squeeze: You Choking Yet?”.
4. Buying from Amazon Doesn’t Support Small Business – By Anya Crittenton