What Is ONDC (Open Network For Digital Commerce)?

ONDC India is an initiative step by the Indian Government which helps both buyers and sellers online.

Table of Contents

1. What is ONDC India?

ONDC abbreviated as Open Network for Digital Commerce is a private non-profit company under section 8 that was initiated by the department for the promotion of industry and internal trade (DPIIT)of the Government of India.

ONDC is an open-source decentralized network that was established on December 31, 2021, with its headquarters in India. This was established for the reason to expand open e-commerce in India with the help of the Government.

Chief Executive Officer(CEO):- T Koshy.

Initially, it started with financing from the Quality Council of India and Protean eGov Technologies Limited. It is the designation for the open exchange and the network between buyers, retailers, and tech platforms which mainly focuses on small sellers who couldn’t sell online and also it ensures the business in a non-competitive manner with the big giants like Amazon and Flipkart.

Also read: Do the Companies and ecommerce platforms started their talks for joining ONDC India?

2. How it all started and the major investors?

On July 5th, 2021, 9 members were appointed to DPIIT advisory council.
By 26 October 2021, an expert team was formed by the QCI(Quality Council of India) and appointed small and medium industry volunteers.
On 26 October 2021, DPIIT approved an initial investment of ₹10 crores.
From November 2021 to March 2022, many investors invested as early promoters. The list is

Punjab National Bank (9.5% for ₹25 crores)
State Bank of India (7.84% for ₹10 crores).
Axis Bank (7.84%).
Kotak Mahindra Bank (7.84%).
BSE Investments (5.88%)
Central Depository Services (6.78%).
ICICI Bank (5.97% for ₹10 crores)
Small Industries Development Bank of India (7.84% for ₹10 crores).

By 23 March 2022, the Common service center has declared that it will promote the logistics in the rural areas with the 3 lakh Grameen e-stores.
On 31 August 2022, the Ministry of Finance and Reserve Bank of India (RBI) (10% for ₹10 crores) and the Bank of India ( 5.56% for ₹10 crores) were invested.
By July 2022, around ₹255 crore amount has been invested from more than 20 organizations including the UCO Bank, HDFC Bank, Bank of Baroda, and many more.
In April 2022, for the first stage of the setup around ₹, 157.5 crores have been received from 17 banks.
From January 2024, PhonPe is committed to investing ₹15 crores for network development.

3. What was the Pilot Project in ONDC?

The Pilot phase was initiated on 29 April 2022, and in this

eSamudaay helps in the frontend dashboard.
Gofrugal Technologies contributed to the enterprise resource planning software.
GrowthFalcons is supported for digital marketing and SellerApp

By 9 August 2022, SDIBI signed to bring the small industries into it.
On 25 August 2022, ONDC signed the memorandum of understanding with the Jammu and Kashmir Trade Promotion Organization (JKTPO).
On 8 September 2022, IDFC first bank joined for upgrading the current account users to access their business transaction purposes.
On 31 August 2022, the Government of India planned to move to the beta-testing phase for the general public in India.
By 2024, the government’s plan is to raise about 3 Croce sellers with above 30 crore consumers around the nation.

4. Where did the pilot phase launch?

The ONDC plans its pilot phase in New Delhi, Bengaluru, Bhopal, Shillong, and Coimbatore, at the end of July 2022 it expands to ONDC expanded to Noida, Faridabad, Lucknow, Bijnor, Bhopal, Chhindwara, Kolkata, Pune, Chennai, Kannur, Thrissur, Udupi, Kanchipuram, Pollachi, Mannar, and Ramanathapuram.

At the end of 2022, it goes live over the entire country. Where the first deal with the ONDC happened In April, by the Bengaluru-based Woolly Farms which received an order from Paytm’s buyer application.
ONDC jumps into the Agricultural domain by 20 June 2022 with the National Bank for Agriculture and Rural Development (NABARD) to form the Agri-tech and non-Agri-tech platforms.
In October 2022, ONDC took the first initial step in conducting the programs for Bengaluru’s restaurants and cloud kitchens.

5. Why is the ONDC important in the upcoming e-commerce generation?

As ONDC is an open-source independent platform for anyone to use, it brings up small business people into it for the business through the online mode. Where it focuses on the facilitator-driven network rather than the operator-driven network.

ONDC plans to bring equal opportunities to sellers and buyers through one ONDC app. Which plans to set only one agreement for the price, catalog, and vendor match.

ONDC is the initiative for e-commerce for moving from the platform-centric model to an open network.

6. What is Public Beta in ONDC India?

It is the one way of service that gives access to all members of the public and to use them for the purposes. Then they can decode the errors in the whole process.

It was first started on 30 September 2022, in Bengaluru’s most densely populated area.
On day 1, the local logistics named LoadShare proceeded with the first 100 orders with one order cancellation. There are some issues in the Paytm app also.
Now we are going to see the major aspect like charges applied to the products that are sold. In Amazon and Flipkart, 18-45% have been charged, whereas in the ONDC only 8-10% have been charged.

Overall view:-

Here it comes to an end, these are all the in-depth overviews of ONDC. Our Piyush Goyal of Stanford University revealed that India is interested in launching multiple unicorn companies through ONDC which helps in building our Indian economy as the strong pillar.

Let us know how this helped you in the reading, comment down below and we would love to give you the responses,

Happy reading.

1. How to become a participant in ONDC?

In the pilot phase, check with the vendor around you for the application and then attend the workshop to understand the procedure and then become a participant.