Amazing opportunity for MSMEs in India.

Open Network Digital Commerce {ONDC} - The Gateway For Small Traders To Start Their Own E-Commerce Store.

Introduction 

We observed the dominance of e-commerce companies, like Amazon, Snapdeal, Flipkart, Zomato, Walmart, etc., in India's domestic market. 

When customers started preferring online shopping and getting more attracted to strategies of e-commerce companies such as season offers, discounts on the pricing of products, and home delivery have resulted in shutting down domestic businesses or struggling with market competition. 

E-commerce companies monopolies the market in India based on the marketplace model. Click here

Here are reports of some e-commerce industry acquisitions and investments in India. 

• To date, Amazon has acquired 91 companies and invested in 92 companies, company has invested $34.89B in multiple sectors such as fashion tech, Book tech, and more. Click here 
• Flipkart acquired 22 companies and invested in 24 companies. Flipkart spends $395M on the acquisitions. Click here
• Snapdeal invested in 5 companies and acquired 14 companies, they spend $6M for acquisition. Click here 

In a lockdown, we know the government shut down offline markets for safety precautions. 

The E-commerce industry boosted more during this period. Customers shifted from buying from the local market to buying online. 

In India, the $810 B domestic market is captured by big E-commerce companies such as Amazon and Flipkart. 

To support and for the growth of Micro, Small & Medium Enterprises(MSMEs) the Indian Government took the step of introducing ONDC { Open Network for Digital Commerce).

The well knows personality 'Anand Mahindra' appreciated this initiative. 

The big name 'Nandan Nilekani' is associated with ONDC. 

If you are associated with Indian MSMEs then the article is important for you. 

What is Open Network for Digital Commerce (ONDC)? 

The government of India launched the pilot phase of the Open Network for Digital commerce( ONDC) under the Department of Promotion of industry and Internal trade.

ONDC is grounded on open sourced methodology, using the open specification and open network protocols independent of any specific platform. 

ONDC is still in the pilot phase. It is introduced to provide a digital platform for local traders, MSMEs, and companies to sell their products and services in their local market digitally. 

It is been introduced to decrease monopolies and duopolies of giant e-commerce companies; Making it democratization and decentralization.

It helps in promoting an open network for all aspects of the exchange of goods and services on digital platforms.

It is introduced to help local businesses.

This platform provides free access and free registration for traders and consumers. 

ONDC protocol has standardized operations like Inventory management, cataloging, order management, and order fulfillment. 

Vendors/sellers/merchants/warehouser/

manufacturers can run their businesses through any ONDC-compatible application.  Click here

Taking into consideration that not all domestic businesses are online, here in ONDC, they can adopt this free registration platform.

Those traders, agents, and manufacturers who don't have sufficient financial resources can now also open their online store on this ONDC platform.

The uniqueness of this ONDC platform is that customers' information is not shared with the buyers until he/ she confirms the order. 

Through this platform, both local businesses and consumers will be benefited as consumers will get fast delivery (on the same day or another day) as they will buy from the local market. 

Example: If you want to buy a mobile/ grocery and you use the ONDC platform you will get multiple options to select and your information will not be shared until you confirm your order. As you order from the local seller you may get delivery in 2 -3 hours that too from the seller you might know. Won't you be happy? 

And you will start supporting Made-in-India products and services. 

Currently, a pilot study is been conducted in five cities such as New Delhi, Bengaluru, Bhopal, Shillong, and Coimbatore. 

And looking at the growth and progress of this pilot study, the department will soon allow this platform in all the states of India. 

Advantages of Open Network Digital Commerce.

• The government department introduced a secured online ONDC platform.
• A local business will grow and prosper.
• Can get Fast delivery (within a day) 
• The traders from all segments can create their online footprint on this platform.
• For delivery services, local people will get employment opportunities. 
• Consumers may know from whom they are buying.
• Consumers will get a chance to select better local products and services.
• The overall growth of the Indian economy.
• Better competition results in providing better products and services to consumers.
• May decrease the chances of local businesses going financially dry.
• On the ONDC platform, customers can access sellers through any app that is integrated with it. 

Disadvantages of ONDC 

• As it is currently in the pilot phase and is not available in all states of India. Only implemented in cities like New Delhi, Bengaluru, Bhopal, Shillong, and Coimbatore.
• It might be difficult for older individuals to understand and interface with the technology while trading.

Conclusion 

This initiative is taken by the Indian government to help small traders, suppliers, and companies. ONDC is in a pilot phase, it helps in providing the digital platform for domestic people to buy and sell their goods and services & to decrease monopolies and duopolies of giant e-commerce companies.

Here traders, warehouses, vendors, manufacturers, and merchant can trade their goods and services to customers. 

ONDC is a free registration platform where customers and traders can plug in.

Even though it is free registration there will be IT companies, graphics designers, content writers, copywriters, etc will be required to make applications for MSMEs. 

Currently, a pilot study is been conducted in five cities such as New Delhi, Bengaluru, Bhopal, Shillong, and Coimbatore. 

No information about customers will be shared until customers confirm the order.  Well-known platforms such as PayTM, Digit, eSamudaay, Go Frugal, Growth Falcons, Seller App, Dunzo, and Loadshare are integrated with ONDC. 

Finally, ONDC  is expected to launch in August 2022. 

Suggestion to ONDC 

• In the future, include Self Help groups and provide employment opportunities to local job seekers.
• In the future, provide an opportunity for local traders to export their products. 
• Provide a helpline number so that people can clarify their doubts and problems. 

Check here 

References 

1. https://www.asmaindia.in/pdf/press/11-Impact-of-E-Commerce-on-MSMEs-in-India.pdf
2. https://www.indianeconomy.net/splclassroom/what-is-the-difference-between-marketplace-model-and-inventory-model-in-ecommerce/
3. https://tracxn.com/d/acquisitions/acquisitionsbyAmazon#:~:text=Amazon%20has%20made%2091%20acquisitions%20and%2092%20investments.
4. https://tracxn.com/d/acquisitions/acquisitionsbyFlipkart.
   
5. https://tracxn.com/d/acquisitions/acquisitionsbySnapdeal#:~:text=Snapdeal%20has%20made%2014%20acquisitions%20and%205%20investments.
6. https://inc42.com/buzz/nandan-nilekani-is-building-ondc-to-curb-amazon-flipkart-dominance-in-ecommerce/
7. https://www.livemint.com/news/india/why-anand-mahindra-said-bravo-to-infosys-billionaire-nandan-nilekani-and-how-did-he-respond-read-full-story-11651369525802.html
8. https://pib.gov.in/Pressreleaseshare.aspx?PRID=1814143.
9. https://www.business-standard.com/article/economy-policy/ondc-in-advanced-stage-of-integration-with-another-17-platforms-122080100018_1.html
10. https://anujauvach.blogspot.com/?m=1

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