What are the news: A meeting of the Open Network for Digital Commerce (ONDC) Advisory Council was held on June 23, chaired by Commerce Minister Piyush Goyal, to review the progress of the project. During the meeting, it was revealed that seven companies have adopted ONDC protocols and created network-enabled applications. Additionally, these apps have been used by customers to transact groceries and food in the pilot phase conducted in Bengaluru, New Delhi, Bhopal, Shillong and Coimbatore since April 29, according to a press release from the ministry of government. Commerce and Industry.
What is the ONDC: ONDC is a project supported by the Indian government to promote an open UPI-like architecture for the e-commerce industry. To give you a better idea: what if there is a shopping app that shows you the products of not only sellers on the app itself, but also sellers on other platforms like Amazon, Meesho and even your local Kirana store. And as a seller, what if there is an application that allows you to list your products on multiple platforms and also choose platform-independent logistics and payment services. Now imagine many such apps and platforms not only for retail, but also for mobility, food delivery, hotel booking and ticketing, and you’ll have a good idea of what the ONDC is supposed to do.
Why is this important: The government believes that e-commerce in India is dominated by a few foreign-funded players (read: Amazon and Flipkart) to the detriment of sellers, and it wants the ONDC to break this stranglehold. But for this, a large number of participants must adopt ONDC. Review meetings like these give us a better idea of where ONDC is.
So, how is the ONDC doing? : While the press release states that the ONDC has “gained more and more from the industry” with seven companies joining, this appears to be only one more than the number of companies that were part of the network a month ago when ONDC CEO T Koshy posted about the first order on the network and said the following participants were part of the network:
- Buyer app: Paytm
- Logistics: Loadshare
- Vendor Apps: GoFrugal, eSamudaay, GrowthFalcons, and Digiit
Nonetheless, the Advisory Board discussed plans for faster deployment of the ONDC platform to more merchants, asset classes, geographies, and businesses, and a large number of businesses are in early stages. advanced integration with ONDC, says the press release.
Will the ONDC really respond to competition issues: The government still believes that the ONDC will open up new opportunities for small traders, MSMEs and businesses, enabling them to better compete with big players, but the parliamentary standing committee on trade, in a report released on June 16, said that “Various issues with regard to operational strategy, fair competition, the technical capacity of MSMEs (micro, small and medium enterprises) to take advantage of the network and clarity in the allocation of responsibilities still need to be addressed.”
More effort is needed to integrate those who are not digitally present: The government itself has identified some shortcomings, mainly that “the ONDC has shown promising results with traders who were already digitally present” and that it must “prioritize strategies towards the inclusion of traders, craftsmen and artisans not digital so that the benefits of e-commerce can be availed by these sections Commerce Minister Goyal has instructed the Department of Promotion of Industry and Internal Trade (DPIIT) to launch a pilot project focusing on non-digital merchants from a single marketplace and said local merchant associations should be involved in the exercise, according to the press release.
Work with NABARD to integrate the agricultural sector: The government also revealed that the ONDC was working with the National Bank for Agriculture and Rural Development (NABARD) to integrate the agricultural sector into the network. As a first step, a hackathon is organized from July 1 to 3 to build innovative solutions for OPAs (Agricultural Producer Organizations), the statement said. “ONDC can prove to be an invaluable tool in helping farmers find the right prices for their produce,” Goyal said.
Rope in state governments: The Government of Uttar Pradesh is actively working with ONDC to make all ODOP (One District One Product) products available on the network and Goyal has led similar efforts to make available GI (Geographical Indication), Khadi, Handicrafts and tribal. products from other states available on ONDC, according to the press release.
Leverage the strength of the Startup India ecosystem: Goyal asked DPIIT to leverage the strength of Startup India to build ONDC apps. “As the ONDC architecture removes many barriers to e-commerce entry, it is much more feasible for entrepreneurs to build sustainable businesses on the ONDC architecture. Startup India Seed funded incubator network could be put used for this purpose,” the statement read.
Develop a strong policy framework to build trust: Goyal spoke of the need to develop a strong political framework to build trust in the ONDC. “Records from the National Consumer Helpline show that the top consumer complaints relate to delivery of the wrong, faulty or damaged product, non-delivery or delayed delivery, failure to refund as promised and to the inadequacy of promised services. All of these issues need to be addressed effectively,” the press release reads.
Who all attended the meeting? The meeting was attended by Nandan Nilekani, former Chairman of the Unique Identification Authority of India; Adil Zainulbhai, Chairman of the Indian Quality Council; Anurag Jain, Secretary, DPIIT; RS Sharma, CEO, National Health Authority; Suresh Sethi, CEO of NSDL e-Gov; Dilip Asbe, CEO of NPCI; Praveen Khandelwal, Secretary General of the Confederal of All India Traders (CAIT); K Rajagopalan, CEO, Retailers Association of India; Arvind Gupta, founding member-iSPiRT; Anjali Bansal, Avaana Capital; and Anil Agrawal, Additional Secretary, DPIIT.
The NRAI in talks to join the ONDC: Separately, the National Restaurant Association of India (NRAI) held talks with the ONDC on June 21 to bring restaurants onto the network, MoneyControl reported. “With multiple NPs (network partners) offering their services on the open network without pre-filters, this will help break away from the current monopolization/cartelization of the online food delivery ecosystem,” read a memo prepared by l ‘ONDC. Food delivery platforms like Zomato and Swiggy have repeatedly come under fire from the NRAI over various issues such as commissions, pricing, data sharing, and more.