From UPSC perspective, the following things are important :
Prelims level : ONDC Project
Mains level : Read the attached story
The department for the promotion of industry and internal trade (DPIIT) in the ministry of commerce and industry is building an open network for digital commerce (ONDC), designed to curb digital monopolies and standardize the onboarding of retailers on e-commerce sites.
What does the ONDC aim to achieve?
- The Unified Payment Interface (UPI) has disrupted the digital payments domain. ONDC seeks to achieve something similar for e-commerce.
- It aims to “democratize” digital commerce, moving it away from platform-centric models like Amazon and Flipkart to an open network.
- ONDC may enable more sellers to be digitally visible. The transactions will be executed through an open network.
- The system may empower merchants and consumers.
- It will eventually touch every business, from retail goods and food to mobility.
How would ONDC work?
- The ONDC is still work in progress and the details are not public.
- But what we know so far is the network may make it easier for a small retailer to be discovered.
A boon for retailers
- Once a retailer lists its products or services using the ONDC’s open protocol, the business can be discovered by consumers on e-commerce platforms that follow the same protocol.
- A consumer searching for the product can see the location of the seller and opt to buy from the neighbourhood shop that can deliver faster compared to an e-commerce company.
- This may promote hyperlocal delivery of goods such as groceries, directly from sellers to consumers.
What are the next steps?
- A private sector-led non-profit unit will be set up to fast-track its roll-out.
- It is expected to provide a startup mindset enabled by a management with a futuristic vision, deep understanding of commerce and comfort with cutting edge technology.
- A non-profit company structure removes any incentive for profit maxi-mization,
- It would keep focus on ethical and responsible behaviour while providing for trust, rigorous norms of governance, accountability and transparency.