Online shopping has become immensely popular in India due to its simple access and plethora of options. The Open Network for Digital Commerce (ONDC), which is backed by the government, has facilitated more than 49.79 million transactions since it officially began in January of last year. Approximately 500,000 sellers have joined the government’s Open Network for Digital Commerce (ONDC), enhancing market accessibility. Hence, for every seller, it becomes essential to increase their online presence, to reach out to potential customers.
There are several e-Commerce giants in India where people turn to for online shopping. However, for new sellers, being visible on those platforms is quite challenging. So, to provide equal opportunity to all traders, irrespective of their scale of business, the government has set up ONDC.
Read on to learn in detail about how this marketplace works, its pros and cons, and how you can resolve disputes on ONDC.
What is ONDC?
The Open Network of Digital Commerce, or ONDC, is a network where merchants can promote and sell their products and services to targeted buyers. This online platform was incorporated in December 2021 with formal launch in April 2022, with the aim of making e-Commerce more open. It interconnects seller-side platforms, buyer-side platforms, logistics platforms and software gateways ensuring the smooth functioning of the platform.
Sellers of any scale can register on various seller apps to list the products and services that they sell. Potential customers can browse through these products via any buyer app and purchase the best one among the available options based on their price, quality, and other parameters. However, the functioning of this platform is not as simple as the UPI platforms.
How Does ONDC India Work?
The primary objective behind setting up the network was to provide support to MSMEs and small traders, as well as, curb digital monopolies. It is already functional in numerous cities and it aims to operate in 100 Indian cities, providing sellers a much bigger platform to sell their products.
Currently, over 5 lakh sellers have adapted to ONDC evolution. It is estimated that more sellers will join the pool, making ONDC a huge success. The functioning of this digital platform is somewhat different from the existing marketplaces. However, the process is much simpler when you understand it.
There are separate buyer and seller apps for purchasing and listing products. First, the seller will have to choose an appropriate seller app where they can create an account and list the products they sell. Customers can view these products from the buyer app, compare and choose the best products to shop on ONDC.
Once the choice is made, the buyer will make payment using different payment gateways available. Then the seller will contact a logistics company to ship the product. In case there are any issues with the product or seller, customer can register their grievances on the online dispute resolution portal.
What is Online Dispute Resolution (ODR)?
Online Dispute Resolution (ODR) is an online digital space where both buyers and sellers can connect to resolve any disputes. The ONDC platform is planning to design an online dispute redressal (ODR) framework in accordance with the NITI Aayog proposal.
To resolve disputes on ONDC, the seller-side ONDC platform has the sole responsibility of resolving grievances ensuring their happiness and retention. Furthermore, ONDC also enlists third party services to resolve all these grievances, ensuring a smooth process.
How to Resolve Disputes on ONDC?
The e-commerce grievance redressal system, at present, is majorly a two-step procedure. Firstly, a customer flags the issue that they are facing on the online e-Commerce platform. Once done, the concerned platform tries to resolve various issues arising from the customer’s end, ensuring an amazing customer experience.
ONDC went a step further and added another layer to expedite the grievance redressal system. Here, first, it will be the responsibility of the seller side of the platform to resolve disputes on ONDC from the customer’s side. If it does not satisfy customers, they can further approach the third party for dispute resolution and later even the court of law.
To process returns for orders placed on ONDC, buyers must submit a request through the IGM, a Grievance Management System. Once the request is raised, the buyer and seller will collaborate to resolve the issue.
In future, the entire process is expected to be automated.
There are several benefits and challenges associated with ONDC that both buyers and sellers should be aware of to make an informed approach.
What are the Benefits and Challenges of ONDC India?
Similar to any other online e-Commerce platform, ONDC also has some benefits and limitations. Whether you are a buyer or a seller, make sure to go through the pros and cons, before registering as a seller or purchasing goods.
Benefits of the ONDC India platform to sellers include:
- Attracting more buyers: Upon registering on the ONDC platform, you can list all your products with the correct tags and prices. Customers from various buyer apps can view your products and shop on ONDC, leading to increased sales and better revenue generation.
- Lower platform fees: Usually conventional marketplaces charge a sumptuous amount from sellers to list their products. Whereas, you will not have to pay extra upon registering on the ONDC India website. However, you might have to pay nominal charges to the seller app through which you are registering on this platform.
- Increased discoverability: Listing your products on the ONDC marketplaces helps you attract customers from all over the country. This helps you build a loyal customer base, increasing the popularity of your brand. It is extremely beneficial in case you are a small seller and new in the market.
- More control over prices: Through the ONDC seller app, you can easily check out the prices and offers that other sellers are putting on similar items that you sell. This will help you decide on an appropriate cost of the product, keeping in mind the profit margin and additional charges.
- Improving customer support: The seller apps where you are registering provide round-the-clock customer support. Should you face any inconveniences, you can directly call them up at any time of the hour. They will then guide you through the steps and solve the issue that you are facing.
- Access to advanced analytics: Data and analytics play a crucial role in understanding the market trends and accordingly devising marketing strategies. ONDC platform gives you an insight into the market trends and large amounts of data. These ensure that you level up your marketing game with ease.
- Availability of logistics support: Many online platforms provide logistic support to customers so they can easily transport products to their customers. These logistic companies are reliable and handle items with care so that customers do not receive damaged products.
- Reduced chances of fraud: Since ONDC is a government-backed platform it offers maximum safety to your sensitive information. This minimises the chances of third parties to access your information, thus minimising the chances of fraud. So, you can conduct the online business without any hurdles.
- Safe and easy transactions: The ONDC platform uses payment gateways such as Protean that make transactions of money from buyer to seller hassle-free. The money is transferred in seconds as well and you stay protected from frauds. So, you can use this payment gateway option.
Benefits of the ONDC platform to buyers include:
- Access to more seller options: Buyers can get a plethora of seller options when searching for a particular product. This helps them compare and purchase quality products at affordable rates.
- Lower rates of goods and services: Sellers on the ONDC platform are authentic and provide you with the best quality products and services at affordable rates. This helps you save a lot of money without compromising on quality.
Many people wonder if ONDC is the future for Indian e-Commerce sellers due to its plethora of benefits. However, there are several challenges with the ONDC platform as well that play a crucial role in its selection. These include:
- Complexity of operation: Unlike UPI, ONDC has two separate interfaces for buyers and sellers. This system is somewhat different from the pre-existing conventional platforms. Hence, it increases the complexity of the use of this platform. However, once you understand it, the process becomes simple.
- Difficulty of dispute resolution: Multiple people are involved with the buying and selling process on this platform. The major players include buyers, sellers, logistics and others. Hence, in case of disputes, it becomes complicated to understand whose fault it is.
- Competitiveness in prices: ONDC is a new platform as compared to the pre-existing e-Commerce sites. So, it does not offer various marketplace discounts, similar to other sites. However, the sellers often offer multiple discounts on the price of their products or services.
Open Network for Digital Commerce was mainly set up to eliminate monopolies, where only a handful of sellers have access to these platforms. This practice gave them control over pricing, taking hold in the e-Commerce sector. The platform is transparent and provides equal opportunities to all traders for selling their products. Also, buyers get the best products as well as an opportunity to resolve disputes on ONDC. So, it is a win-win for everyone associated with this platform.
Protean supports the Open Network concept and has been instrumental as a founding member in establishing ONDC Ltd under DPIIT's leadership. Committed to promoting the adoption and long-term sustainability of this initiative, Protean invites you to learn more by contacting us here.
FAQs
1. Which buyer apps are associated with ONDC?
There are various buyer apps from where customers can purchase products from the ONDC platform. These include Paytm, Magicpin, Meesho, Mystore, Pincoode, Craftsvilla, and Spicesmart Shop. However, there are other buyer apps as well that you can explore.
2. Who can be a part of the ONDC India platform?
ONDC provides equal opportunities to all ventures to be a part of the e-Commerce platform. So, even if you are a small-scale startup or large-scale business owner, you can register yourselves as sellers and boost sales of your products and services.
3. Why is ONDC cheaper than other platforms?
ONDC is a government-backed platform providing equal opportunities to all venture owners. It does not charge extra from sellers which reduces the overall product costs when compared to its competitors.
4. Is joining the ONDC India platform profitable for small businesses?
ONDC seller app levies a minimal charge from the SMEs, allowing them to keep a maximum portion of their profits. This is highly profitable, especially for small-scale businesses that are new to the market.
5. Which cities of India does ONDC serve?
The services of ONDC are available in 594+ cities covering most major Indian cities such as Chennai, Mumbai, Delhi NCR, including Gurgaon, Noida, and Faridabad, Bengaluru, Meerut, Hyderabad, and Kolkata. Also, the government is planning to include more cities in future.
