3 Years of Open Network for Digital Commerce | 06 Jan 2025

Source: TH 

Why in News?  

The Prime Minister of India highlighted the Open Network for Digital Commerce (ONDC) for its transformative impact on e-commerce and its role in empowering small businesses. 

• ONDC recently completed 3 years with over 15 million monthly transactions, making strides in combating platform monopolies and promoting a level playing field. 

What is Open Network for Digital Commerce? 

• About: ONDC Launched in April 2022 by Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce, Government of India. It  aims to democratize digital commerce through an open, inclusive, and interoperable platform. 
  • ONDC was incorporated as a non-profit company  in December 2021, with the Quality Council of India and Protean eGov Technologies Limited as Founding Members.  
• Objectives:  
  • Democratization of Commerce: Promoting interoperability to reduce the dominance of monopolistic e-commerce platforms. 
  • Cost Efficiency: Lowering costs for customer acquisition and transaction processing. 
  • Market Expansion: Bridging regional and linguistic gaps for wider market participation. 
  • Consumer Empowerment: Providing diverse product and service options to buyers,  with lower prices through discounts and promotions, enhancing choices and fostering competitive pricing. 

• Key Features:  
  • Open Protocol: Built on open-source methodology (which can be accessed by everyone) and protocols, ONDC allows buyers and sellers to transact seamlessly across different platforms and applications. 
  • Role Segregation: Participants include Buyer Apps (Connect consumers and sellers), Seller Apps (Interfaces for businesses to list and manage products), Logistics Providers (Ensure efficient transport), Tech Enablers (Provide IT tools). 
• Sectoral Scope: ONDC facilitates diverse domains, from food, grocery, and fashion to financial services, agriculture, and health. 
• ONDC Benefits: 
  • MSMEs: ONDC empowers Micro, Small and Medium Enterprises (MSME) by enhancing nationwide visibility, reducing reliance on high-cost platforms, and lowering operational expenses.  
    • It offers training programs to build digital skills and focuses on inclusivity by supporting women-owned and Scheduled Castes and Scheduled Tribes led enterprises through initiatives like the MSME-TEAM scheme. 
  • Startups: The ONDC Startup Mahotsav fosters collaboration, offering startups opportunities in logistics, IT, and seller-buyer platforms to integrate into a vast e-commerce network.  
• ONDC Initiatives for Awareness: 
  • ONDC is conducting workshops with industry associations like Federation of Indian Chambers of Commerce & Industry (FICCI) to educate small businesses. 
  • ONDC collaborates with Bhashini to enhance app development and e-commerce in Indic languages. 
    • The "ONDC Sahayak" WhatsApp Bot provides information in 5 languages. 
• Achievements of ONDC: ONDC has successfully piloted in cities like Bengaluru and Delhi, with the Department of Food and Public Distribution launching a Fair Price Shop pilot in Himachal Pradesh.  
  • Initially starting with Food and beverage (F&B) and Grocery, ONDC has expanded to categories like Mobility, Fashion, Health, and B2B.  
  • As of January 2024, it covers over 616 cities, broadening its geographical reach. 

• Awards and Recognition:  In 2024, ONDC received "Application of Emerging Technologies for providing Citizen Centric Services" at the National Awards for e-Governance and it was recognized as the "Start-up of the Year" at the 14th India Digital Awards (IDA). 
  • In 2023, ONDC was recognized as the "FinTech Company of the Year" at the Global Fintech Awards.