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Snapdeal is now available on ONDC, here’s all you need to know about the network

Snapdeal is now available on ONDC, here’s all you need to know about the network

  • E-commerce platform Snapdeal made its debut on the government-led Open Network for Digital Commerce (ONDC) on July 19.
  • An initiative by the Department for Promotion of Industry and Internal Trade (DPIIT), ONDC aims to support micro, small and medium enterprises (MSMEs) and small traders and help them get on to online platforms.
  • ONDC is a UPI of e-commerce that seeks to democratize virtual commerce, shifting it from a platform-centric model to an open-network.
With the launch of Unified Payments Interface (UPI), the Indian government brought all virtual banking and payments under one roof. The government is now pulling off a similar feat in yet another walled garden, the e-commerce category, with the launch of Open Network for Digital Commerce (ONDC).

ONDC aims to democratize virtual commerce by bringing all platforms under one open network. It would create a new, equal-level playing field for the e-commerce landscape, which is currently dominated by international players Amazon and Flipkart.

Open Network goes beyond the current platform-centric model where the buyer and seller must be part of the same platform/ application to enable transactions between them.

By moving away from platform-centric models to an open network, ONDC intends to stop digital monopolies.

Currently, Amazon and Flipkart have end-to-end control over the entire e-commerce ecosystem which includes seller onboarding, customer acquisition, order fulfillment, payment, returns and complaint redressal.

Imagine a platform that not only shows products from Amazon, Flipkart and Meesho under one umbrella, but also from all your local kirana stores. That’s exactly what the open network intends to do. You would be able to compare the prices of Amazon finds and product specifications of Flipkart finds through one application.

Courtesy: ONDC, Ministry of Commerce

It will unbundle the supply chain, shifting the power from the likes of Amazon and Flipkart to consumers, merchants, and providers of support services.

With an open network, smaller players will also have access to Amazon or Flipkart controlled data. ONDC, therefore, aims to support MSMEs and small traders and help them get on online platforms.

Snapdeal is the first e-commerce platform to get on the open network. E-comm platforms Dunzo and Ekart have also partnered with ONDC.

How does ONDC work?

Not only will the open network enable smoother transactions and online buying experience for consumers, it would also digitize the entire value chain and improve efficiencies in logistics for sellers.

Small merchants will be able to skip separate lists of mandates and commissions for every platform they join.

With ONDC, retailers will have access to processes and technologies that are deployed by e-commerce giants such as Amazon and Flipkart. It would also mean better discoverability for all retailers and enhance transparency in pricing.

Silos will be broken down and an open list with delivery partners, aggregators, customers, restaurants, and logistic providers will be put together.

According to the government, “ONDC will 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 anonymized aggregate metrics on network performance without compromising on confidentiality and privacy.”

When was ONDC announced?

An initiative by the Department for Promotion of Industry and Internal Trade (DPIIT), ONDC would enable both sellers and buyers to be digitally visible and transact through an open network, regardless of what platform or application they use.

The initiative was announced by a nine-member advisory council that included Infosys co-founder and chairman Nandan Nilekani, National Health Authority CEO R S Sharma, QCI Chairman Adil Zainulbhai, National Payments Corporation of India CEO Dilip Asbe and others.

As per DPIIT, ONDC “...aims at promoting open networks developed on open-sourced methodology, using open specifications and open network protocols, independent on any specific platform. ONDC is expected to digitize the entire value chain, standardize operations, promote inclusion of suppliers, derive efficiency in logistics, and enhance value for consumers.”

The open network is not just for retail transactions, it is also for food, delivery, travel, hotel booking, and more, which would potentially challenge the dominance of all large e-commerce players.

As more small traders and retailers accept the online world, ONDC plans to increase e-commerce 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.

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