Government launches ONDC: the next milestone in eCommerce

(Last Updated On: May 18, 2022)

To empower small businesses with eCommerce and end the monopoly of e-marketplace giants, the government has launched an Open Network for Digital Commerce (ONDC). Experts say, “ONDC meets all the criteria for the next digital revolution and disruption in India.”

Here’s what you need to know to stay on top of this eCommerce revolution.

What is ONDC?

Imagine you have a t-shirt business and sell through social media. You want to reach more customers but you don’t want to go through the hassle of registering on online marketplaces. So, you register your business on ONDC which supports small businesses and customers around the country can buy from you.   

A Flipkart or Amazon, but backed by the government, and small business-friendly.

ONDC was born because of the government’s vision to democratise eCommerce in India.

Right now, 80% of online retail market is captured by Amazon and Flipkart, both of which are foreign-based. Their strategies such as ​​aggressive discounts and promotion of preferred sellers do more harm to MSMEs and limit their growth. 

ondc model
The ONDC business model (source: ONDC strategy)

This new venture will move Indian eCommerce away from the current platform-centric model to an open network — representing trust and equality. 

This means that you can reach a wide customer base without registering on separate platforms. If you have a physical store, online shoppers near you can find your business easily. 

For example, if a buyer is looking for, say, a white shirt, they will find the products hosted on Amazon and Flipkart. And they will also find the white shirt sold by local shops in their neighbourhood or nearest location. This works even if you don’t have a physical store and sell on social media. 

How is ONDC different from Government e-marketplace?

The Government e-marketplace is an online portal where you can sell products only to government agencies and officials. The online portal allows for direct purchases of goods up to INR 50,000, and public procurement takes place through bidding and reverse auction.

ONDC does not have any such limits and will be available to every online shopper across the country. There will be strict protocols and dispute resolution set up by the committee to fulfil processes smoothly.


How will ONDC benefit MSMEs?

ONDC promises to provide a playing field to small merchants too. Here’s how you can benefit from it once the platform rolls out in full swing:

More visibility, less hassle

Your products will be visible on multiple marketplace websites without having to register on each of them separately. This is possible because several operational aspects such as onboarding and product cataloguing will become open source.

Beat competition

Marketplace giants favour a few sellers over the thousands of others in the category. This makes competition fierce for small brands. ONDC enables you to beat the competition by giving a fair opportunity for all sellers registered on it.

Supports local businesses

 Are you a physical store owner looking to sell online? The open-source commerce platform supports local businesses. This means that an online shopper can find a store near their location.

Related Read: How to sell online in India: Website v/s marketplace

The downside of ONDC

ONDC seeks to unify eCommerce in India. Though this brings more opportunity for small sellers, it also takes away the competitive advantages that businesses can have. For example,

  •  If your business is on an open-source platform, you can’t get access to the behaviour insights of your customers
  • You don’t have control over the overall shopping experience and user interface

So, to build a long term sustainable business, you will need something beyond what open-source platforms and marketplaces can offer.

Related Read: 10 reasons why your business needs an eCommerce website

An online store where you can easily upload products, receive payments securely, and acquire customers will be a powerful addition to your business journey. As more businesses go online, the best way for you to stand out and make the most out of eCommerce is to have an eCommerce website.

Instamojo helps MSMEs go online and get a better platform to do business. You can track your sales, access customer data, and offer unique shopping experiences.

The future of eCommerce is at the intersection of open source platforms and online stores. Are you ready to scale your business into the future? Sign up on Instamojo for free and get your own online store.

Start an online store

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