Modi govt India’s plan to develop Open Network for Digital Commerce (ONDC) is not good news for already knackered global e-commerce giants Amazon, Walmart’s Flipkart. The e-tailers have their plates full with a range of problems including an ongoing antitrust probe, a proposed prohibition on flash sales, and perennial opposition from various traders’ bodies.
Amazon and Flipkart’s ambitions to dominate India’s $800 billion retail market will soon face a reality check as India’s commerce ministry looks to ‘end monopolistic practices’ in digital commerce.
ONDC spearheaded by the commerce ministry is an initiative aimed to promote open networks for all aspects of the exchange of goods and services over digital or electronic networks. ONDC is to be based on open-sourced methodology, using open specifications and open network protocols independent of any specific platform.Modi govtGovt claims that ‘as UPI is to the digital payment domain, ONDC is to e-commerce in India.’ The initiative is aimed to democratise digital commerce and move it from platform-centric model to an open-network model. Union Commerce and Industry Minister Piyush Goyal says that ONDC will work both for products and services.
How will ONDC work
Modi govt ONDC goes beyond the current platform-centric digital commerce model where the buyer and seller have to use the same platform or application to be digitally visible and do a business transaction.
“The foundations of ONDC are to be open protocols for all aspects in the entire chain of activities in exchange of goods and services, similar to hypertext transfer protocol for information exchange over internet, simple mail transfer protocol for exchange of emails and unified payments interface for payments,” the ministry said.