ONDC simplified
What is ONDC?
Open Network for Digital Commerce (ONDC) aims at promoting open networks for exchange of goods and services over digital or electronic networks. It was incorporated as a Section 8 company in December 2021, with the Quality Council of India and Protean eGov Technologies Limited as Founding Members. ONDC is to be based on open-sourced methodology, using open specifications and open network protocols independent of any specific platform. Its shareholders include a Government of India-led non-profit organisation, an e-governance technology company, and several of India's top banks.
Who does it benefit?
ONDC will benefit sellers, entrepreneurs, researchers, buyers, service providers and Payment Gateways amongst others
How is it beneficial?
ONDC helps standardize operations like cataloguing, inventory management, order management, order fulfilment, and digitisation of the entire value chain. Thus, small businesses would be able to use any ONDC compatible applications instead of being governed by specific platform centric policies. This will provide multiple options to small businesses to be digitally visible and discoverable over an open network and conduct business. It would also encourage easy adoption of digital means by those currently not on digital commerce networks and would empower merchants and consumers to break silos to form a single network to drive innovation and scale.
ONDC is expected to make e-Commerce more inclusive and accessible for consumers. Consumers can potentially discover any seller, product or service by using any compatible application or platform, thus increasing freedom of choice for consumers to choose their preferred local businesses. It will enable the consumers to match demand with the nearest available supply, and would thus, promote inclusion of local suppliers, drive efficiencies in logistics and lead to enhancement of value for consumers.
ONDC shall take all measures to ensure confidentiality and privacy of data in the network. ONDC shall not mandate sharing of any transaction-level data by participants with ONDC. Will work with its participants to publish anonymised aggregate metrics on network performance without compromising on confidentiality and privacy.
Various roles available on the ONDC platform?
ONDC identifies 4 types of roles in the industry which it caters to - Buyer Network Participant, Seller Network Participant, Technology Service Provider and Gateway.
Buyer Network Participant: Connects buyers to the ONDC network via a buyer application and shoulders buyer-facing responsibilities such as customer support, ensuring a seamless shopping experience, and providing a single checkout experience across categories.
Seller Network Participant: A Seller Network Participant is responsible for connecting sellers to the ONDC network through a seller application. They are also responsible for digitizing the seller's catalogue and dispersing payments. Additionally, they must train sellers on best practices in e-commerce to ensure quality fulfilment and provide a positive buying experience for customers.
Gateway: Gateways serve as technology providers to ensure that all sellers in the ONDC Network can be discovered. They facilitate multicasting by forwarding search requests from buyer applications to all seller applications and vice versa, as specified in the ONDC Network Policies. The Gateway service enables manual searches by end consumers by providing relevant product/service information from ONDC's seller universe.
Technology Service Provider: Technology Service Providers (TSPs) offer a range of software applications either as standalone solutions or via cloud-based services. As an outsourced software provider, TSPs enable seamless business operations on the network, empowering players to participate in e-commerce without requiring in-house technology capabilities. TSPs also serve as drivers for achieving ONDC goals and attracting businesses of various sizes to join the network.
Steps to follow to start operations and production in ONDC
Get familiar with how the ONDC functions and how one can leverage the platform to accelerate ones business
Identify ones role in the network to connect with the right end consumer or the apt B2B channel
Submit participation form available in the website
Initiate implementation plan after completion of the onboarding steps including Introductory calls and implementation briefing
Go into the development phase which includes technology development, policy compliance and operational readiness
Pass the final checklist verification process which provides steps under technical, operational and regulatory compliance to enter the production phase
Enter the Testing and operationalization phase which starts with soft launch in pre-production environment with test users
Go live into the production environment with a Probationary Period with live users
Launch full-scale production with live users
Categories that ONDC is involved in
Buyers can purchase across multiple categories and services through ONDC enabled Buyer Apps. ONDC has been launched with Grocery, F&B and Fashion categories to start with and is in process of launching new categories.
Does ONDC charge any commission?
ONDC does not charge or recommend any commissions. The commission discussion & agreement is between the seller and seller NP. It is expected that Seller App will charge viable commissions for a category as sellers have choice of joining ONDC through any of the active seller NPs on the ONDC network. The seller also has option of passing the cost of packaging, delivery to the buyer as separate line items from the product selling price.