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Unlocking Commerce: ONDC's Objectives and Functions



  Dec 25, 2023

Objectives and Functioning of the Open Network for Digital Commerce (ONDC)



Objectives of ONDC:

The Open Network for Digital Commerce (ONDC) is an initiative aimed at transforming the digital commerce sector in India. Its primary objectives include:

Democratizing the E-commerce Landscape: ONDC seeks to create a level playing field in the e-commerce sector. It aims to provide equal opportunities for all sellers, irrespective of their size, to participate in the digital economy.

Reducing Dominance of Major Players: A significant goal is to reduce the market dominance of major US-based e-commerce giants like Amazon. ONDC intends to break the monopolistic tendencies in the e-commerce space, offering more choices to consumers and fairer competition among sellers.

Establishing an Open Platform: ONDC is designed as an open platform for the buying and selling of goods and services. This open network will facilitate greater transparency and interoperability within the e-commerce ecosystem.

Enabling Local Retailers: The platform aims to empower local retailers and small businesses by enabling their participation in the e-commerce market. This inclusion will help them to expand their customer base and compete effectively in the online marketplace.

Major Players Backing ONDC:

ONDC has garnered support and investments from both government and private entities, including prominent financial institutions such as:

HDFC
Kotak Mahindra
Axis Bank
State Bank of India (SBI)
Punjab National Bank (PNB)
These investments reflect confidence in the potential of ONDC to revolutionize the e-commerce landscape in India.

How ONDC Works:

ONDC operates as a facilitator between buyers and sellers in the digital commerce space. Its functioning includes:

Serving as an Intermediary Layer: ONDC acts as the intermediary between interfaces hosting buyers and sellers. It connects various e-commerce platforms, allowing them to interact seamlessly.

Providing a Comprehensive Listing: When a buyer searches for a product, ONDC aggregates information from various sellers on its network. For instance, if a buyer is looking for a grocery item, they will receive a list of all ONDC-affiliated sellers offering that item.

Standardized Payment Processing: Members of the ONDC network agree to use a standardized payment processing service, ensuring consistency and reliability in transactions.

In essence, ONDC's approach is to establish an inclusive, interoperable, and efficient digital commerce environment, benefiting both consumers and sellers by offering wider choices, competitive pricing, and enhanced market access.


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