ONDC: The Future of Digital Commerce in India

Introduction

India, as a country lately has witnessed a boost in the leap of e-commerce and online transactions within itself. It is ever- growing at an unprecedented rate.  A report by the Indian Brand Equity Foundation states that the Indian e-commerce market is expected to reach $200 billion by 2026, growing at a CAGR of 30.4% from 2021 to 2026. 

This growth, in turn, invites a set of challenges.  A list of serious issues has been faced time and again by the digital commerce industry in India, consisting of an absence of standardization, interoperability, and trust. This is where the Open Network for Digital Commerce (ONDC) comes in. 

ONDC is a government- led step towards the creation of a unified digital commerce ecosystem in India. All the stakeholders in the digital commerce industry, including merchants, payment service providers, logistics providers, and consumers, will be able to access this platform.

In this blog post,  the future of digital commerce in India with ONDC is explored in detail. We will discuss what ONDC is, why it is important for India, how it will work, who will benefit from it, and when it will be implemented.  Important insights on how businesses can prepare for ONDC and adapt to the changing digital commerce landscape in India have also been provided wherever required.

What is ONDC?

ONDC, or the Open Network for Digital Commerce, is a government-led initiative in India hoping to put together the digital commerce ecosystem. The government aims to present a platform for the entire digital commerce industry, which would include merchants, payment service providers, logistics providers, and consumers. ONDC is designed in such a way that it would address the challenges faced by the digital commerce industry in India, ranging from the deficiency of standardization, interoperability, and trust.

This platform can evolve the digital commerce industry in India.  Merchants, payment service providers, logistics providers, and consumers can all benefit from it since it is a common platform.  A secure and transparent payment and logistics system reducing the risk of fraud and increasing trust between all parties involved has also been supplied by ONDC.

Why is ONDC important for India?

The digital commerce industry in India has evolved at an unmatched rate , with the Indian e-commerce market expected to reach $200 billion by 6. Yet, there exists a list of challenges along with it, such as lack of standardization, interoperability, and trust. ONDC is important for India because it attends to these challenges and creates a unified digital commerce ecosystem that benefits all stakeholders.

ONDC provides a common platform for all stakeholders in the digital commerce industry, including merchants, payment service providers, logistics providers, and consumers. This means that all parties involved can benefit from a seamless and secure digital commerce experience. ONDC also provides a secure and transparent payment and logistics system, which reduces the risk of fraud and increases trust between all parties involved.

ONDC is also important for India because it promotes innovation and entrepreneurship. With a unified digital commerce ecosystem, startups and small businesses can compete with larger players on a level playing field. This means that ONDC can help to create a more diverse and competitive digital commerce industry in India.

How will ONDC work?

ONDC aims to operate by setting a common platform for all stakeholders in the digital commerce industry. This platform will exclusively be on Open standards and will be suitable with all existing digital commerce platforms. ONDC will provide A safe and clear payment and logistics system aimed at eliminating visible dangers of fraud and increasing trust between all parties involved.

A common language will be supplied by ONDC for all stakeholders in the digital commerce industry. So that all parties involved will be able to communicate with each other at ease, irrespective of the platform they use.  Stakeholders are expected to follow a common set of rules and regulations, which will make sure that all stakeholders in the digital commerce industry function in a fair manner.

ONDC will be executed in phases.  The first phase will be centered on the foundation of a common platform for all stakeholders in the digital commerce industry.  The second phase will be centered on the foundation of a safe and trouble-free payment and logistics system.

Who will benefit from ONDC?

As introduced by the government of india .ONDC, is looking forward to establishing itself as a platform that has the potential to bring together the entire digital commerce of India. This common platform would be available for all in the digital commerce industry, including merchants, payment service providers, logistics providers, and consumers. ONDC is designed to address the challenges faced by the digital commerce industry in India, such as lack of standardization, interoperability, and trust.

Merchants will get the maximum number of advantages from ONDC as it would bring along a common platform for them to sell their products and services, irrespective of the platform they use. This initiative is guaranteed to amplify the set of audiences for merchants and boost their sales. ONDC also provides a secure and transparent payment system, which reduces the risk of fraud and increases trust between merchants and consumers.

Payment service providers can also benefit from ONDC as it would present them with a common platform for them to put forward their service, irrespective of the platform they use.  Meaning, that payment service providers can reach a wider audience and increase their revenue. ONDC also provides a secure and transparent payment system, which reduces the risk of fraud and increases trust between payment service providers and consumers.

Logistics providers will also remain advantageous from ONDC as it will supply them with a common platform for them to extend their services, regardless of the platform they use. Logistics providers would receive a relatively larger audience, which will further expand their revenue with no apparent threats of fraud since it is a secure system and boosts trust between logistics providers and consumers.

Consumers will benefit from ONDC as it presents them with a seamless and secure shopping experience. Consumers can shop from multiple merchants on a single platform, which saves time and effort. ONDC also provides a secure and transparent payment system, which reduces the risk of fraud and increases trust between consumers and merchants.

When will ONDC be implemented?

This particular government -oriented initiative in India has already started its implementation, typically on a minute scale.ONDC specifically focuses on the formulation of a uniform digital commerce ecosystem. The implementation of ONDC has already begun, with The government of India operating closely with industry stakeholders, promising a smooth rollout.

The implementation procedure has started in phases. The first phase aims at the foundation of a common platform for all stakeholders in the digital commerce industry. This platform will typically consist of open standards and will be compatible with all existing digital commerce platforms. The second phase will be primarily directed towards building a safe and transparent payment and logistics system, which will eliminate the danger of fraud and increase trust between all parties involved.

The first phase of ONDC is supposed to be completed by the end of 2023, with the second phase expected to be completed by the end of 2024.

The government of India is committed to making sure that ONDC is applied in a timely and efficient manner and is working closely with industry stakeholders to address any challenges that may arise during the implementation process.

How can businesses prepare for ONDC?

Businesses, in order to enjoy the numerous benefits of ONDC, are firstly expected to develop some 

characteristics of their own, which are :

1. Understand the ONDC framework: It is absolutely necessary for Businesses to familiarize themselves with the ONDC framework. This would generally consist of an understanding of  the practical and working needs of ONDC, as well as any requirements. An insight into the framework helps businesses in more than one way as it gives them an upper hand that they are ready for the switch that ONDC will bring to the digital commerce industry in India.

2. Ensure compliance: Businesses need to make sure at first that they are acquainted with the ONDC framework. Specifically with the technical and operational requirements of ONDC, along with the primary requirements. When businesses are well known with the platform, any sort of penalties or fines that can be applied for non-compliance will be eliminated.

3. Upgrade technology: Businesses need to always stay up to date with technology infrastructure because by doing that, they are more likely to be compatible with ONDC. This includes The improvement in their payment and logistics systems, e-commerce platforms, etc. This upgradation in their technology infrastructure paves the way for businesses to take advantage of the welfare that ONDC  comprises.

4. Train employees:  Employees should be provided with prior knowledge of the ONDC framework and its requirements via training procedures. This contributes to the smooth operation of ONDC and their performance, such as how well they can utilize this platform.  These training procedures prepare businesses for the upcoming changes that will be brought down by ONDC in the meantime.

5. Collaborate with stakeholders:  It is important for businesses to interact with other stakeholders in the digital commerce industry because it will act as a contributing factor to a smooth transition to ONDC.  Cooperating with payment service providers, logistics providers, and other merchants and more things as such needs to be done. By joining forces with stakeholders, businesses are benefiting ONDC in the best way possible.

Conclusion

Thus, in the meantime, we acquired the knowledge that ONDC as an initiative stands as an extremely important step for the digital commerce industry in India. From which businesses can actively benefit from its onset. By fostering competition, reducing entry barriers, and enhancing data security it paves the way for a more inclusive and innovative e-commerce ecosystem,poised for substantial growth.

After gaining subsequent information about ONDC, along with the numerous benefits it entails, such as a steady boost in the technology, promised compliance, training employees, and interaction with stakeholders, businesses are all ready to imbibe the best qualities of ONDC that it has in store for you.  With ONDC, the future of digital commerce in India is definitely in good hands, and it most certainly looks bright and promising.

 Frequently Asked Questions (FAQs)

What is ONDC?

ONDC, or the Open Network for Digital Commerce, is a government initiative in India that aims to create a unified digital commerce ecosystem. It is a common platform for all in the digital commerce industry, including merchants, payment service providers, logistics providers, and consumers.

What are the benefits of ONDC?

ONDC creates a unified digital commerce ecosystem that benefits all stakeholders, including merchants, payment service providers, logistics providers, and consumers. It addresses the challenges faced by the digital commerce industry in India, such as lack of standardization, interoperability, and trust.

When will ONDC be implemented?

ONDC is being implemented in phases, with the first phase focusing on creating a common platform for all stakeholders in the digital commerce industry. The first phase of ONDC is expected to be completed by the end of 2023, with the second phase expected to be completed by the end of 2024.

How will ONDC impact merchants?

Merchants will benefit from ONDC as it provides a common platform for them to sell their products and services, regardless of the platform they use. This means that merchants can reach a wider audience and increase their sales. ONDC also provides a secure and transparent payment system, which reduces the risk of fraud and increases trust between merchants and consumers.