The Open Network for Digital Commerce (ONDC) aims to increase open networks for all trade in goods and services over digital or electronic networks. The foundations of ONDC are open protocols for every single step in the set of activities for exchanging goods and services, just like how HTTP is used for sending information over the internet, SMTPS is also used for email exchanges, and UPI is used for payments.
ONDC is poised to make significant strides in the nation’s digital commerce ecosystem following the revolution that the Unified Payments Interface (UPI) brought about in digital payments. According to people with knowledge of the developments, ONDC reaches orders in the retail sector as it gets ready to introduce a second type of network design and agreements, which is supposed to add a new set of features and necessarily enhance customer experience.
The Department for Promotion of Industry and Internal Trade (DPIIT) of the Government of India established the private, non-profit Section 8 company Open Network for Digital Commerce (ONDC) to foster open e-commerce. The Quality Council of India and Protean eGov Technologies Limited (previously NSDL e-Governance Infrastructure Limited) provided the initial funding for its incorporation on December 31, 2022.
Retail has been out of reach for most sellers, particularly those from small towns and rural areas. ONDC recognized this as a once-in-a-lifetime opportunity to push India’s e-retail penetration from its current level of 4.3% to its full potential. By enabling the population-scale inclusion of all types and sizes of sellers, ONDC hopes to increase the penetration of e-commerce in India significantly.
The advisory council’s primary responsibility is overseeing the nation’s ONDC implementation. Based on their expertise in areas like technology, finance, and business, among others, the members were chosen. The ONDC employs “open specifications, free software, and open network protocol.” Independent of platform or application, consumers and merchants can transact goods and services on the ONDC.
The network policies, network trust, network grievance handling, and network reputation system will be designed by ONDC using its technology and specification layer. ONDC plans to implement a dynamic pricing model to lower operating costs for all platform users, digitize inventory management, and optimize delivery costs.
It will develop a hyper-local search engine model based on GPS proximity data as the default setting. To fulfil the order, the buyer can choose the vendor and logistics partner independently. After one year of operation, it covers 236 cities in India with over 45 network participants and 36,000 sellers. In more than eight categories, it has expanded its operations.
