Government launches ONDC, an alternate e-commerce platform to Flipkart and Amazon, in Bengaluru benefitting the small retailers

Consumers in Bengaluru can now shop from multiple ranges of products and services from a single buyer application of their choice. In addition, consumers can place their orders in two categories-groceries restaurants. It has been made possible through the buyer applications participating on the network. 

MyStore, PayTM and SpiceMoney are available as buyer apps in ONDC.

Open Network for Digital Commerce (ONDC) has been initiated in Bengaluru to reduce the dominance of the two key players in the e-commerce market- Flipkart and Amazon. The services will be available to the public in Bengaluru for now. 

The Government has taken the initiative to help small retailers and create an alternative option to the dominant global chains like Amazon and Walmart.

The two markets control India’s half of the rapidly expanding e-commerce market.

Consumers in Bengaluru can now shop from various categories of products on a single platform of their choice. Consumers can choose products from two domains-groceries and restaurants. 

The orders can be placed in two categories- groceries and restaurants with the help of any buyer applications participating in the ONDC network.

Commerce and Industry Minister Piyush Goyal has revealed in a tweet that the ONDC network would prove to be democratic, cost-effective, and will empower buyers and small businesses. 

He has further added that the ONDC network will provide the consumers in Bengaluru with a new shopping experience. 

Beta testing of the Government’s revolutionary Open Network for Digital Commerce has already been initiated on 30 September.

The government believes that ONDC will help to cease the monopoly of the key players in the e-commerce market and further increase the reach of the small merchants.

The commerce and industry minister launched the pilot phase of the ONDC in five cities including Bengaluru, Delhi NCR, Bhopal, Shillong, and Coimbatore. 

Many organizations of national repute have invested in the network of 255 crore INR and the lenders include popular banks such as State Bank of India, UCO Bank, HDFC Bank, ICICI Bank, and Bank of Baroda. The initiative was launched on 31 December 2021 and started with a financial investment from the Quality Council of India. 

It is not an application or software but a set of specifications designed to regulate the interchange and connections between shoppers, technology platforms, and retailers.

ONDC refers to the set of standards adopted voluntarily by the sellers or the logistic providers or payment gateways.

ONDC will allow the local shop owners across various categories such as mobility, grocery, food order, delivery, hotel booking, and travel, to showcase their products and provides services in any of the search apps. 

If both Amazon and Walmart’s Flipkart joins their platforms with ONDC, a user searching for any key product will see results from Flipkart and Amazon.

How will the ONDC Network operate?

The ONDC network has created a lot of popularity among merchants as it focuses to create an inclusive marketplace. PayTM is active only on the seller side while on the buyers’ side many apps have gone live including Digit, eSamudaay, and Gofrugal Technologies.

Dunzo and LoadShare are the two logistic providers which are on board with the ONDC Network. 

There are three levels of commission: the buyer level, the seller level, and the logistic level. 

The buyer applications will be based on the customer-facing platforms in the network. As a result, they will charge a buyer fee.

PayTM is the only app on the seller side that is currently on board and charges a 3 percent commission. In addition, a seller’s fee will also be charged through the network as merchants will be linked to the network via the seller applications. They will manage the inventory and the orders. 

The sellers can also decide to charge a delivery fee or provide free delivery service based on the distance.

Furthermore. The seller applications will not charge any retailer who earns less than 1 lakh INR in a month for a lifetime.

The initiative will allow small businesses to achieve increased business at a lower cost. Cloud kitchens generally operate through Zomato, Swiggy, or any other food delivery services which ask for a high commission fee.10 percent commission fee on food services will prove to be beneficial to small retail Businesses.

Currently, 60 merchants have joined hands in the business with no onboarding fee but only a transaction commission. 

In addition, the end consumers are charged less for the delivered services.

The open Network of Digital Commerce has kickstarted its launch with 161 orders on day one in Bengaluru. The services are initially provided to consumers from 16 pin codes in Bengaluru. 

The beta launch aims to provide early feedback for necessary changes to take place. The attempt is to see if transactions happen successfully and products reach the end consumers. The next step emphasizes building trust in the system. The network will soon operate nationwide.

edited and proofread by nikita sharma