A new player has entered the market to end the dominance of giants like Zomato, Swiggy, and Flipkart, Amazon. The name of this new player is ONDC (Open Network for Digital Commerce).
Though it’s been a year since ONDC’s release, recently it has become the talk of the town following the prize comparison with Zomato and Swiggy.
WHAT IS ONDC?
After the success of the Unified Payments Interface (UPI), India is now looking to usher in another digital revolution – this time in the e-commerce space.
ONDC is a government of India initiative aimed at
bringing together buyers and sellers of a wide range of goods and services on one open network.
ONDC is not an app or service but a platform designed and developed by the Government. This service helps to connect or digitalise businesses with customers.
BOTH BUYER AND SELLER WILL HAVE EQUAL BENEFIT
With ONDC, sellers will be able to reach new customers and build high potential growth areas of digital commerce where they can also create their own terms and conditions.
On the other hand, buyers will also have multiple options on a single platform and can reach out to any seller and choose a fair price for the product without wasting much time comparing different apps. Besides this, it also offers multiple services on a single platform, like food, groceries, clothes, or a new device.
ONDC VS ZOMATO, SWIGGY
Zomato and Swiggy enjoy a duopoly when it comes to online food delivery services in India. They are often criticised for the “middleman cut”, which goes around 22% and further increases the price.
ONDC is all set to change this by cutting down the middleman between businesses and consumers. ONDC’s commission charge is only around 3-4%.
Enabling the elimination of middlemen eventually leads to fair prices for customers and a profitable margin for the business.
WHY IS ONDC IMPORTANT?
ONDC will help curb the monopoly of big players and increase the reach of small merchants. It will also help in making a larger number of buyers available to all the sellers present on the network.
India has the 3rd-largest online shopper base globally, with 14 crore e-retail shoppers in 2020. But Amazon and Flipkart currently control more than 60% of the Indian e-commerce market.
Due to this, small sellers aren’t able to reach new customers and build high potential growth. ONDC aims to change this dominance.
HOW TO USE ONDC AND HOW IT WORKS?
In order to shop through ONDC, customers can open buyer applications such as Paytm, Mystore, Craftsvilla, Spice Money, Meesho, Magicpin, and Pincode. Another option is to search ONDC on Google, choose “shop on ONDC,” and start shopping.
Currently, ONDC has around 29,000 sellers in 236 cities. Sellers will handle deliveries through tie-ups with logistics firms like Dunzo, Shiprocket, etc.
CHALLENGES FOR ONDC
The first and biggest problem is that the government will have to run a massive awareness campaign because many Indian local sellers don’t have much technical knowledge.
Second, smaller businesses with low volumes may also lack the resources to match the discounts offered by heavyweights like Amazon and Flipkart.
CONCLUSION
The government thinks ONDC has the potential to become the next UPI, which is India’s most successful digital product.
As ONDC onboards more customers and vendors, it has the potential to disrupt not just food delivery but also all kinds of e-commerce in India.
What’s your thoughts on this? Can it be another UPI?
