The central government is working on a model called ONDC that will enable customers to log in to an open network and look for products or services that they require
ONDC is expected to digitise the entire value chain, standardise operations, promote inclusion of suppliers, derive efficiencies in logistics and enhance value for consumers.
The government wants to replicate UPI’s success
The Central government in the backdrop of drafting its contentious ecommerce rules has now come up with a new kind of model to rival the e-commerce giants Amazon India and Flipkart which dominate the online shopping market.
According to a Times of India report, the central government is working on a model called Open Network for Digital Commerce that will enable customers to log in to an open network and look for products or services that they require. Depending on buyers’ location, sellers’ will be listed along with the product details and price.
As per the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce, ONDC aims at promoting open networks developed on open-sourced methodology, using open specifications and open network protocols independent of any specific platform.
ONDC is expected to digitise the entire value chain, standardise operations, promote inclusion of suppliers, derive efficiencies in logistics, and enhance value for consumers.
The report highlighted that the government hopes ONDC replicates the success of UPI. For context, UPI was built by the National Payment Corporation of India and has recorded a transaction of a whopping $2.7 Bn for June. UPI has also been adopted in Bhutan.
ONDC will be connected to a payment gateway and also in some cases provide delivery and logistics services.
As per the source quoted by TOI, broad contours of ONDC are in place. Infosys chairman Nandan Nilekani and RS Sharma of the National Health Authority were among others in the advisory group overlooking the ONDC project.
A pilot project involving auto-rickshaw and taxi drivers has been already conducted. It is expected that in the coming months, multiple pilot projects involving delivery, FMCG players, Kirana stores among others will kick off in Bengaluru, Delhi, Varanasi and Jaipur. The government believes that the present model is platform-centric and requires buyers and sellers to be on the same platform, thus benefiting a handful of players.
Few players quashing competition has been a global phenomenon. In the U.S tech giants such as Facebook, Google, Apple have been under for not killing the competition. The Indian government in recent times is inspecting the way ecommerce companies in the country are doing business. The government has observed that with the booming of ecommerce business in the country, unfair trade practices have increased with some sellers getting more preference from the ecommerce platform. In the proposed amendment to the consumer (ecommerce) rules, the government wants to ban “flash sale”, prevent ecommerce platforms from misrepresenting products, and show Indian alternative products on the platform among others.
ONDC can seem to strife the growth of a few companies further who are dominating the market. A similar move can be seen that is under work by the National Restaurants Association of India (NRAI), a restaurant body in loggerhead with food delivery giants such as Swiggy and Zomato. NRAI is working to build a delivery platform to take on Swiggy and Zomato which as per NRAI is looting Indian restaurants.
