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10 Reasons Why Open Network for Digital Commerce (ONDC) Will Disrupt Indian E-commerce

Online shopping has become a part of our lives. With the advent of smartphones and affordable data plans, Indian consumers have shifted to online retail in a big way. In fact, the e-commerce market in India has grown from $33 billion in 2018 to $200 billion in 2021 with a CAGR of more than 50%. With so many e-commerce ventures sprouting up in India, it’s difficult for new ones to stand out from the crowd. However, ONDC has some unique features that make it stand out from its competitors. Here are 10 reasons why you should keep an eye on this upcoming venture:

ONDC Offers Tailored Solutions to the Indian Consumers

This is a key advantage that ONDC has over the current e-commerce market leaders Amazon and Flipkart. It has been stated that Amazon is not attuned to the needs of Indian consumers. Historically, Indian consumers prefer to buy products in person rather than online, which is why Amazon has been investing in brick-and-mortar stores in India.

ONDC is specifically designed with the needs of Indian consumers in mind and offers a tailored shopping experience. This will help to attract more consumers to ONDC, disrupting Amazon's and Flipkart's business in the Indian e-commerce market.

ONDC Has the Potential to Disrupt E-commerce the Way UPI Disrupted Digital Payments

The GoI supports ONDC, which has the potential to upend e-commerce in the same manner that UPI did for online payments. ONDC’s focus on building a community where users can discover and buy hand-picked products by Indian brands gives it an edge. Similar to UPI, ONDC would function as a non-profit corporation to draw sellers who would otherwise pay substantial sums in commissions to other e-commerce platforms.

ONDC Will Use Open Specifications and Network Protocols Independent of Any One Platform

The business model of ONDC is based on an open and decentralized framework. Here, anyone can list the products and services after being verified by ONDC. All the transactions will be processed and verified on the blockchain network. ONDC will use open specifications and network protocols, independent of any one platform. The sellers will have the freedom to choose the payment method such as UPI, credit cards, or cash on delivery (COD).

Starting an Online Store Is Easier for Small Businesses and Entrepreneurs

The ONDC platform provides an easy-to-use interface for sellers to list their products and services. Small enterprises and entrepreneurs will find launching their own online storefronts simpler. It will eliminate the need to spend thousands of dollars on website development. They simply need to register on the platform and begin adding items. They can also choose the category, sub-category, and product name such as the category “Electronics”, sub-category “Mobile Phone”, and product name “iPhone X.”

ONDC Will Also Provide Access to a Wide Range of Products and Services From Different Sellers

Customers can buy products and services from a wide range of sellers on the ONDC platform. The ONDC team has developed a proprietary algorithm that will show the products and services of the sellers near the user’s location first. Also, customers can search for products and services from sellers located in other parts of the country.

ONDC Focuses on Great User Experience and Customer Satisfaction

The ONDC platform is designed to offer a great user experience with a focus on customer satisfaction. The platform will allow only authentic sellers to sell on the platform. After checking product detail, consumers will choose the product and provide contact details. The sellers can then contact them to conclude the deal. The platform will also have a live chat feature and a 24/7 customer support helpline, making it more user-friendly.

Consumers Can Pay Using UPI or Credit Card for Faster Checkout and Fraud Detection

Customers can choose their payment mode using UPI or a credit card. The payment will be verified on the blockchain and the money will be transferred to the seller’s bank account. This will make the transaction process easier and faster. The platform could also be integrated with the Aadhaar Payments Network (APN) to verify customers’ identities and prevent fraud.

Consumers Won’t Have to Remember Passwords

ONDC will adopt Digilocker Single Sign-On, which eliminates the need for usernames and passwords. With built-in two-factor authentication, this will usher in the next level of security for authenticating users, avoiding account takeover, fraud, and identity theft.

ONDC Only Features Hand-Picked Products That Are Exclusive to Its Platform

The products on the ONDC platform are hand-picked by curators. They will be responsible for sourcing products and quality checks. The products featured on the ONDC platform will be exclusive to the platform. This will allow it to build a strong community of users and will be a win-win for all stakeholders.

ONDC Could Protect the Personal Data of Indians and Prevent Data Exploitation

Many e-commerce platforms rely on third-party vendors to collect and analyze data. And, many of them are located outside India and are governed by strict foreign data protection laws. This could pose a risk to the security and privacy of Indian data. ONDC will only collect and store data on its platform to ensure complete security.

Encouraging Future Prospects

With its vast potential, ONDC intends to transform the e-commerce market from an ecosystem driven by operators to a network led by facilitators. E-commerce platforms will no longer have the power to onboard sellers; instead, ONDC will have this ability. It is now being used in Delhi, Bengaluru, Coimbatore, Shillong, and Bhopal as a trial launch. Paytm has been chosen as the buyer app for the time being. Several systems, like Gofugal, Digit, and Growth Falcon, have been incorporated for sellers.

Additionally, discussions with Dunzo, PhonePe, and Reliance Retail are at the advanced stages. Microsoft already made the decision to join the network. Amazon and Flipkart may soon join ONDC, claims a report from The Indian Express.

© Copyright 2022. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC., its management, its subsidiaries, its affiliates, or its other professionals. Ankura is not a law firm and cannot provide legal advice.


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