OPEN NETWORK FOR DIGITAL COMMERCE (ONDC)
What will the future shop, shopping and shopping experience be like is the riddle all of us are trying to unravel. For a long time it has happened without us giving it a thought and we kept lapping up all that came our way. From kirana stores, to big shops, to malls to home delivery to amazons, flipkarts and the like and a huge transformation to digital commerce courtesy COVID-19 has been our journey. Digital commerce is there to stay and there is no looking back. Product at your doorstep of right quality and price, in the fastest possible time is the promise of the present and the future. And it is this battle which seems to be heating in a manner unimaginable, and battle lines are drawn all around the place. Amazon is the known market leader claiming to be the shopkeeper of the world. Flipkart and others are also there in the fray.
These are all platform companies, run on the super strength of aggregation and network effect, supported ably by super high tech platform, with all information on the fly, working real time, enabled by data analytics and AI engine and enjoying high commissions in the process. They are creative and competitive monopolies, that have come to stay and give run for money to small and medium sellers, dictating the price, and the buyer remaining unsure of the real price. Who is being fleeced and how much is the unknown story? The known story is the customer can buy at will, mostly of the right quality and is delivered home. For sure lots are left out of this strong tool of digital commerce and those who are in the trade have to follow the terms and diktats of the digital commerce behemoths.
There is need for a digital commerce platform to take care of unattended; buyers and sellers, covering uncovered services and products, stand in competition against the Amazons, provide extremely competitive margins, very small commissions and give all the utilities what is being offered by digital commerce behemoths, might be more. This in reality is the vision of Open Network for Digital Commerce. The analogy being drawn out are the hugely successful payment gateway and Aadhar. The complexity is way greater than single transactional and identity database solutions provided at scale. There were no challengers there, ONDC has to find its own way through tough competition, having to prove at every stage, on both the tech and business model side and its capability to iterate and scale nearly relentlessly.
The stage is all set for an ONDC, given shift from offline to online, Indian transactional internet model quite different for ad enabled internet model, store to doorstep shift, millions of small traders in need of a platform, likely credit at scale, delivery companies growing and birth of brand aggregators for an ecosystem in the making. Even 20% commerce coming on this platform would mean a $200 billion dollars business. Banks and telcos can add further value. Integration and scale are extremely critical. Digital commerce has lots of loose ends and open threads have to be seamlessly tied into protocols and exhilarating customer experience. Critical mass and experience only can tilt the scale. There is a need for a regulator to play an effective role. From pricing, conflict of interests, data ownership / analytics, intermediary’s role; issues will crop up to blur the windscreen. Whatever may be the challenges, we are at the cusp of a promising business transformation, nowhere tried in the world.
ONDC HAS THE POTENTIAL TO BRING ABOUT TOTAL BUSINESS TRANSFORMATION.