Explainer: What is ONDC, India’s undertaking for an open e-commerce network?
Table of Contents
A shipment moves on a conveyor belt at an Amazon Fulfillment Centre (BLR7) on the outskirts of Bengaluru, India, September 18, 2018. REUTERS/ Abhishek N. Chinnappa
Sign up now for Totally free unrestricted access to Reuters.com
NEW DELHI, June 1 (Reuters) – India’s governing administration in April introduced its Open Network For Digital Commerce (ONDC) as a possible choice to dominant worldwide giants Amazon.com (AMZN.O) and Walmart (WMT.N) in its quick-expanding e-commerce marketplace.
Below is a description of the distinctive going areas of ONDC.
WHAT IS ONDC?
ONDC is a non-income business whose network will empower the display screen of items and services from all collaborating e-commerce platforms in research success across all apps on the community.
Sign-up now for Free endless entry to Reuters.com
For case in point, if each Amazon and Walmart’s Flipkart integrate their platforms with ONDC, a person searching for a Bluetooth headset on Amazon would also see final results from Flipkart on the Amazon app.
WHAT ARE ONDC’S TRANSACTION TARGETS?
ONDC aims to elevate e-commerce penetration in the upcoming two years to 25% of India’s consumer purchases, from almost 8% now, in a place of 1.35 billion men and women.
It also hopes to indication up 900 million purchasers and 1.2 million sellers on the shared network within the up coming 5 yrs, whilst attaining gross items value of $48 billion.
The federal government estimates that India’s e-commerce marketplace was worthy of more than $55 billion in gross goods benefit in 2021 and will mature to $350 billion by the finish of this decade. Now, Amazon and Walmart’s Flipkart regulate a lot more than 60% of the market.
HOW DOES ONDC Goal TO Raise Competition?
The government suggests current platforms get the job done in silos and are tightly controlled, maintaining out lots of little players. It expects ONDC to improve level of competition and foster innovation by commence-ups.
It also hopes to carry in logistics companies and other individuals who can collaborate with sellers to provide products and solutions to customers.
The emphasis would be on tiny merchants and rural people, with applications in Indian languages.
ONDC officials liken the network to a shopping mall with 1,000 gates as an alternative of just two, thus limiting prospects for chosen sellers to get preferential cure – a widespread accusation versus major e-commerce companies.
End users will be able to fee company vendors on ONDC, which will be applicable and noticeable throughout the community.
The authorities says ONDC will enable to conclusion “predatory pricing, specially in large-margin, large-price merchandise”. Amazon and Flipkart deny that they have engaged in predatory pricing.
WHAT Worries DOES ONDC Confront?
ONDC aims generally to faucet thousands and thousands of little businesses that frequently absence technological abilities, so the government will have to operate a substantial recognition campaign to get them on board, said the Confederation of All India Traders, a group that signifies 80 million these firms.
Scaled-down organizations with very low volumes might also deficiency the assets to match the discounts made available by heavyweights like Amazon and Flipkart.
Register now for Free of charge unlimited accessibility to Reuters.com
Reporting by Munsif Vengattil in New Delhi Modifying by Edmund Klamann
Our Benchmarks: The Thomson Reuters Have faith in Principles.
