Explained: What’s Open Network for Digital Commerce and how it will benefit e-retailers, traders, MSMEs

Explained: What’s Open Network for Digital Commerce and how it will benefit e-retailers, traders, MSMEs

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ecommerceThe project to integrate e-commerce platforms through a network based on open-source technology independent of any single or unique e-commerce platform has been tasked to the Quality Council of India.

Technology for MSMEs: The government’s idea to make the e-commerce ecosystem open source, which means allowing sellers to be discoverable across multiple platforms for a wider reach to customers instead of available to customers on only one particular e-commerce platform, will help democratize digital commerce much like Unified Payments Interface (UPI), according to experts. The Department for Promotion of Industry and Internal Trade (DPIIT) on Monday, through an order, announced an Open Network for Digital Commerce (ONDC) to address the issue of digital monopolies and “digitize the entire value chain, standardize operations, promote inclusion of suppliers, derive efficiencies in logistics and enhance value for consumers,” the official statement had said. Essentially, what this would do is turn e-commerce from its current form into an open digital infrastructure, which is highly scalable for sellers and customers to connect with each other, without the barrier of making an effort of switching between two or more marketplaces for a particular product.

“When you are opting for e-commerce, you have to go to various platforms to trade as it is not seamless for you to shift from one marketplace to another and be visible to multiple people at the same time. In some ways what UPI did to the banking capabilities for people as everybody uses the same protocol to seamlessly transact real-time, ONDC is a similar case as far as commerce is concerned. So we are trying to work on it so that one can trade with anybody and create visibility for his/her product,” Kumar Rajagopalan, CEO, Retailers Association of India told Financial Express Online.

Rajagopalan is part of a nine-member advisory council constituted by the Ministry of Commerce to advise the government on how to “design and accelerate adoption of ONDC,” the government had said. The other eight members included R.S. Sharma, CEO, National Health Authority, Nandan Nilekani, Non-executive Chairman, Infosys, Praveen Khandelwal, Secretary-General, CAIT, Adil Zainulbhai, Chairman, QCI and Capacity Building Commission, Anjali Bansal, Founder & Chairperson, Avaana Capital, Arvind Gupta, Co-founder & Head, Digital India Foundation, Dilip Asbe, MD & CEO, NPCI, and Suresh Sethi, MD & CEO, NSDL.

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The project to integrate e-commerce platforms through a network based on open-source technology independent of any single or unique e-commerce platform has been tasked to the Quality Council of India. So, how it might work? “Let’s say I’m a small retailer and want to showcase my products to multiple platforms for which I have to currently work with individual platforms or use various methods to showcase products. With ONDC, it is possible you can expose products on various platforms at the same time. If someone is searching let’s say a white shirt, the network can show you multiple sellers with the same product because everybody is using an easily understandable protocol of ONDC. So, retailers would benefit from visibility, reach, ability to connect with customers faster and in a much cheaper way,” added Rajagopalan.

The move by the government indicates offering an open network protocol that enables location-aware local commerce across industries to be discovered and engaged by any network-enabled application. According to traders’ body CAIT, while the terms of reference for the Council are yet to be notified, ONDC appeared to go beyond the current platform-centric digital commerce model where the buyer and seller must use the same platform to do a business transaction. On ONDC, buyers and sellers may transact irrespective of the fact that they are attached to one specific e-commerce portal. Presumably, it will be like UPI for payments, IMAP/SMTP protocols for emails, and HTTP for data communication and browsing on the World Wide Web, the body added.

“This will be most impactful for MSMEs and small traders looking to unlock value and scale their operations through the digital commerce space. This will be a first-of-its-kind initiative in the world to create a level playing field for digital commerce at the scale of a country like India,” said Praveen Khandelwal, Secretary General, CAIT.

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