Starting with digitally linking Aadhaar, then linking it with banks, building UPI and now creating an open network for digital commerce, the ONDC (Open Network for Digital Commerce) is an exemplary achievement and is the first of its kind in the world.
ONDC has recently created a lot of buzz in India and is touted to be the next UPI moment.
According to one of the surveys, out of 2 crores kirana shops, only 15,000 are e-commerce enabled. The GMV of this sector is expected to increase from around 60-70 billion dollars to around 300 billion dollars. In an attempt to democratize and decentralize Indian digital commerce, the ONDC will work to increase India’s digital penetration, which is currently at 6%-7%. Using the ONDC model, all problems can be solved and the entire landscape of the world will grow into a healthier democratic place that gives equal opportunity to small vendors.
The Pandemic has put a lot of challenges on the merchant’s ability to reach consumers. The Ministry of Commerce prioritized this issue and formed a committee to find a solution. There is a lot of development in the Tech world, like UPI, and a strong community of people is developing the foundational open-source platform, which is forming the basis of many initiatives. Hence, an open network for digital commerce was established that would transform the sector in the long term and affect e-commerce vendors and related industries like logistics, warehousing, gig economy delivery services, and dark retailers.
Firstly, ONDC initiated the Alpha testing mode to demonstrate that cascading transactions can happen across entities. This initiative was done by early adopters who built their systems to meet the requirements of the upper network and made it available in five different cities for limited buying and selling applications and tried to scale it to be present in more cities. However, at this point, such limited activities are only available in about 80 cities. Next, for beta testing, it was launched in Bangalore, wherein it was open to the public at large and showed public adoption and a comforting static place. Now there are 20 network participants with five bypasses from three logistics platforms and about 14 to 15 seller platforms already live. In the beta testing, ONDC will demonstrate the building up of volumes across cities and the outreach to stimulate transactions.
In terms of the employment perspective, gig workers have a huge opportunity ahead with the implementation of ONDC. As per studies, around 7.7 million workers were part of the gig ecosystem in 2020-21. According to industry reports, the combined user base of digital gig workers, blue-collar workers, and formal temps is expected to be more than 200 million (23.5 million gig workers) by 2029. With ONDC in place, the eCommerce industry will continue to grow, which will in turn increase the demand for gig workers. ONDC will require unskilled and skilled people who have relevant sectoral experience and are trained in a certain discipline.
ONDC is now diversifying in the B2C market, and the other segments that will be introduced are fashion, beauty, electronics, personal care, etc. There will be a catalog offering every product & service. ONDC will focus on getting the best buying experience and helping the buyer choose what is appropriate and relevant.
Views expressed above are the author's own.
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