ETtech Explainer | ONDC: India’s bid to break ecommerce monopolies
Illustration: Rahul Awasthi New Delhi: The Open Network For Digital Commerce ( ONDC ) was unveiled by the government in April as a potential alternative to Amazon and Walmart’s Flipkart in the country’s fast-growing ecommerce market.
The network, which aims to democratise ecommerce by putting more kiranas and unorganised retailers online, was launched as a test in Bengaluru and four other cities, with plans to expand to 100 locations across the country by August.
What is ONDC?
ONDC is being pitched as a non-profit ecommerce network that will display products and services from all participating ecommerce platforms in search results.
For example, if both Amazon and Flipkart integrate their platforms with ONDC, a user searching for a Bluetooth headset on Amazon would also see results from Flipkart on the Amazon app.
It is thus seen as a way to challenge the dominance of large ecommerce platforms in India. Graphic: Rahul Awasthi
ONDC aims to go beyond retail ecommerce, however, and similarly connect companies in areas such as mobility, food delivery, hotel booking and travel, among others.
What’s the goal?
The platform intends to open up new opportunities, reduce digital monopolies, and empower micro, small, and medium businesses, as well as small traders, by bringing them online. It’s the brainchild of the Ministry of Commerce and Industry’s Department for Promotion of Industry and Internal Trade (DPIIT).In a country of 1.35 billion people, ONDC plans to increase ecommerce penetration to 25% of all consumer purchases in the next two years, up from about 8% presently.Within the next five years, it expects to sign up 900 million buyers and 1.2 million sellers on the shared network, with a gross merchandise value of $48 billion.India’s ecommerce business was valued at more than $55 billion in gross merchandise value in 2021, according to the government, […]
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