Will ONDC Kill the E-Commerce Monopoly?

Will ONDC Kill the E-Commerce Monopoly

ONDC is slowly coming into the limelight. Many reports claim that ONDC will soon kill the e-commerce monopoly. But, what is ONDC, and how will it kill the e-commerce monopoly? Let’s find out.

What’s Happening?

Whenever we talk about online shopping, ‘Flipkart and Amazon’ somehow manage to enter the conversation. That’s because these are colossal e-commerce superpowers dominating the Indian retail markets. These e-companies are aggregators between customers and manufacturers/sellers. 

So, if you buy a watch worth Rs 2,000 for Rs 500 from an e-commerce website, these companies are still making huge profits, hurting offline small businesses.

To reduce this abuse of aggregator superpower, the government has come up with ‘Open Network for Digital Commerce (ONDC)’. 

Why Has the Government Taken This Initiative?

  • Firstly, a few sellers on e-commerce platforms gain a lot of traction because they offer products at a competitive rate. So, small sellers listed on its website are pushed down in search results. 
  • The second reason is its deep discounting model. You can buy branded products at 50-60% discounts during sales, which hurts offline retailers. 
  • Lastly, these e-commerce companies manufacture products under their own brand name and sell them at a lower price with a ‘best-seller’ label. Such products grab a lot of attention, which leads to low sales of other products.

Because of these reasons, the government has come up with ONDC.

What is ONDC, and How Will It Kill the Ecommerce Monopoly?

ONDC is an initiative taken for micro and small sellers. It will enable local buyers and sellers to transact through an open network digitally. So, it will also help small sellers create an identity on the e-platform.

The unique feature of ONDC is that it breaks dependency on one platform by creating a wide network of entities, which include aggregators, sellers, and logistics.  

So, if you wish to buy bread, you go to Blinkit’s website and place the order, the kirana shopkeeper will keep your order ready, and a logistics company will pick up the order and drop it at your place. So, a single entity doesn’t provide the entire service and breaks the monopoly.

What Lies Ahead?

The idea of ONDC sounds excellent, and many small retailers and logistics companies would benefit from it. Minister of Commerce and Industry Piyush Goyal said that ONDC will end monopolistic practices in digital commerce in India.

In April, the centre launched ONDC in five states in the pilot phase. But, looking at the framework of ONDC, various questions are yet to be answered on the customer experience end. With so many sellers listed, will you get standard quality products? Because different entities are involved in the process, won’t it possibly make more room for scams… and a lot more. 

ONDC is still a work in progress…Let’s see how the future evolves.

Until then…

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