ONDC is the next big thing!

ONDC (Open Network for Digital Commerce) is a decentralized network for e-commerce. Sellers can list their products on the network and 3rd party players like Amazon, Flipkart, Myntra can integrate ONDC on their platform to list these products. ONDC unbundles the commerce stack—so buyer apps, seller platforms, and logistics providers can all interoperate freely. The network itself is partially owned by the Govt of India.

A Bit of History

If you want to expand your business online, and you are not on a major E-Commerce platform like Amazon or Flipkart, then it is very difficult to compete against these giants. Together, they hold a very significant portion of the market. You, as a small business owner, do not have the capital, manpower or logistics to go against Amazon or Flipkart. So you go on these platforms to sell your product. But that comes at cost. Due to oligopoly, you are reliant on just a few players to sell your product. They may set exhorbitant commissions, delist your product and launch their own private-labelled alternative, rank your products lower in comparision to products that manage to get the “Amazon’s Choice” tag. Further, you may get non-compete clauses which will not allow you to sell your products at other platforms.

TLDR; Sellers are at a big disadvantage, whenever they launch their products on 3rd Party Platforms. They lose control over their products and often have to share a significant chunk of their profits with the platform.

How ONDC Works

At the very simplistic level, ONDC is just an open network (like UPI, Bitcoin, Ethereum etc) to enable decentralized E-Commerce. The ONDC protocol (still in draft) is based on the Beckn Protocol for decentralized interoperable P2P networks.

There are 3 main partners in the network.

1. The Seller: Uploads their product on the ONDC Network through any application that integrates ONDC.
2. The Buyer: Buys products from an App that fetches all the products on the ONDC Network.
3. The Logistics: Provides Logistics and Delivery to the product buyer bought on the Network.

Many 3rd Party Players have already started integrating into the ONDC network. Paytm being one of the major ones.

Major challenges

While a great idea on it’s own, it is not without challanges and low adoption. It is a very new technology and will take years for adoption. Many things are still uncertain in the specification, like segregation of products, returns and refunds, no rating system of products or grievance redressal etc. Furthermore, the existing players are unwilling to adopt this new technology.

It’s like building a decentralized Amazon with all parts independent. It requires coordination, trust, and maturity, which takes time.

Still, these challenges are solvable — and many are being addressed as adoption grows.