Open Network for Digital Commerce (ONDC), the government-backed interoperable network, has gone live for users at 16 pin codes of Bengaluru.
ONDC is an initiative of the Department of Promotion of Industry and Internal Trade (DPIIT), ministry of commerce.
More than 200 grocery stores and restaurants in the city have been onboarded for this phase of the trial.
To begin with, consumers can place their orders in two domains – groceries and restaurants through buyer apps participating on the ONDC network.
ONDC’s beta test in the city of Bengaluru is a major first step in operationalising a network approach to e-commerce as an alternative to platform centric approach. This will make e-commerce landscape more inclusive, accessible and experience driven for all consumers and sellers.
Consumers can now shop from multiple categories of products and services from a single buyer application of their choice. They can buy grocery products or order food from the stores and restaurants. In the coming weeks many more applications will join the network expanding both buyer and sellers who can participate in this transaction.
ONDC started its Alpha test phase with a closed user group of buyers first in Bengaluru in April 2022 expanding to more than 80 cities by September 2022. This validated the apps and confirmed business and operational flows. Now in beta testing phase, general public can experience shopping via ONDC and provide early feedback for necessary action if any before expanding further.
To build trust amongst consumers, sellers and Network Participants (Buyer Apps, Seller Apps & Gateways) in the open network, ONDC has consulted current ecosystem, experts and examined best practices for adapting and evolving the best approach to build trust in an unbundled decentralised network. This is explained in a consultation paper that is being made available for public consultation on the official social media handles of DPIIT, ONDC and the website.
Incorporated on 31 December 2021, Open Network for Digital Commerce (ONDC), a Section 8 company, is an initiative envisioned to create a facilitative model to revolutionise digital commerce, giving greater thrust to penetration of retail e-commerce in India. ONDC is not an application, platform, intermediary, or software, but a set of specifications designed to foster open, unbundled, and interoperable open networks thereby eliminating the dependency on a single platform.
Major ONDC objectives are:
- Democratisation and decentralisation of eCommerce;
- Inclusivity and access for sellers, especially small and medium enterprises as well as local businesses; and
- Increased choices and independency for consumers.
"Until now, the pilot programme had been restricted to select whitelisted users. The beta testing launch in Bengaluru is a major step forward for ONDC as we will be able to make improvements based on user feedback," said ONDC chief executive officer and managing director T Koshy.
"It will take time for the network to operate in full swing. But in the sentiment of the famous dialogue from Star Trek, we are going somewhere nobody has gone before," he added.
The Bengaluru trials will begin with Paytm, MyStore and Spice Money as buyer-side apps – platforms where users can sign up and place orders via the network. However, according to people close to the developments, the onboarding of users in the Bengaluru beta testing will happen in a phased manner and not all at once.
SellerApp has onboarded around 50 participants in Bengaluru on the seller side to the network, including 31 kirana stores and supermarkets, 12 direct to consumer (D2C) brands like Kapiva, Boldcare, TrueNext, and five CPG brands like Patanjali and P&G.
The seller platform has done testing to be able to handle 1,000 search requests per second and 100 orders per second.
While SellerApp is focused on grocery, GrowthFalcons is a seller-side app looking to bring restaurants and F&B companies on to the network. It has already onboarded around 150 food outlets to the network – from Foodism in Indiranagar, Ovenfresh Cakes in Whitefield to Five Star Chicken in Nagarbhavi.
“We have been a part of ONDC since September 2021 and taken part in multiple hackathons. I think we were among the first ones to complete a cascaded transaction on the network,” said Girish Pai, founder and CEO of GrowthFalcons.
The structure of separate buying and selling platforms is one of the key differences between the closed-loop model of e-commerce and the open network model. As all e-commerce platforms – from Amazon and Flipkart to Swiggy and Zomato – today are cast in the former style, they can control which sellers are given prominence in the listings and have gated communities of users.
ONDC seeks to break down this structure into a modular form of e-commerce where, potentially, any user on any platform can buy from any seller on any other platform.
It aims to raise e-commerce penetration in the next two years to 25 percent of India's consumer purchases, from nearly 8 percent now. It also hopes to sign up 900 million buyers and 1.2 million sellers on the shared network within the next five years, while achieving gross merchandise value of $48 billion.