Open Network for Digital Commerce
26th May, 2023
- The Open Network for Digital Commerce (ONDC) aims to "democratise e-commerce" and "provide alternatives to proprietary e-commerce sites," is expected to be officially launched by the Union government this year.
- While it has invited businesses to join the ONDC platform, large e-commerce giants such as Amazon and Flipkart have been hesitant to participate.
- The Indian Commerce Minister has requested that these enterprises join ONDC as soon as possible or risk being left behind.
What is the ONDC?
- The government wants to change the fundamental structure of the e-commerce market from a platform-centric model to an open-network model.
- The ONDC is modelled after the Unified Payments Interface (UPI) project, which allows people to send or receive money irrespective of the payments platforms on which they are registered.
- To make such transactions a reality, the government has ordered companies to list themselves on the ONDC.
- The pilot version of the ONDC was launched last year in a few major cities and thousands of sellers have already been on-boarded onto the platform, but Amazon and Flipkart have not yet on-boarded their main shopping platforms onto the ONDC network.
Why is the Centre pushing for it?
- The government believes that the ONDC will end the domination of the e-commerce market by a few large platforms.
- Amazon and Flipkart have been accused of promoting seller entities in which they hold indirect stakes, and food delivery apps such as Swiggy and Zomato have been accused of charging high commissions from sellers.
- With an open network like ONDC, the government hopes to level the playing field and make private platforms redundant.