Introduction to ONDC
Open Network for
Digital Commerce (ONDC) is the new and revolutionary way for digital commerce
in India. It provides an open specification and aims to provide more dynamic
participation of buyers and sellers, promotes fair competition, aims to
increase user choices and fosters further innovation. By providing a platform
and open specification, there can be myriad of innovative applications that can
be built of top of the ONDC Platform. ONDC itself is built on top of the Beckn
Protocol and the IndiaStack.
Read my Earlier
Article on Introduction to the Beckn Protocol.
What really is ONDC?
It has to be noted
that ONDC is not an application, software or a technology – It is a set of specifications
or an open network and associated platforms can be built out of or based on this
specification. ONDC is none of the following:
ý Application or Platform
ý Central Intermediary
ý Medium to Digitize Biz
ý Government Regulator
At the same time,
ONDC is an open network and a set of open specifications to enable and ease digital
commerce.
þ Open Network, Set of Open Specifications
þ Eliminates Need for Central
Intermediary
þ Enabler for E-Commerce and
Innovation
þ It’s a Market & Community Led
Initiative
How ONDC Works?
At the core of its
advantages, ONDC goes beyond the current platform centric digital commerce
model where the buyer and the seller have to use the same single platform to be
digitally visible and do a business transaction. With the help of the underlying
protocols in ONDC, ONDC provides an open specification for standardizing
cataloguing, inventory management, order management and order fulfilment. This
provide multiple options for businesses to be discoverable over the network and
conduct business. It will also encourage the use of digital means for business
that are not yet on any digital commerce networks. The maximum advantage is bound
to be for the small and medium businesses.
As you can observe
from the above, sellers from multiple platform can be discoverable via ONDC.
Sellers, usually also called Providers in ONDC, techno functionally user the Beckn
Provider Platform (BPP). The sellers will use the BPP to acquire orders and for
order fulfilment via ONDC. Beckn Application Platform (BAP) allows consumers to
discover sellers, place orders and allows them to make payment.
The underlying communication in ONDC happens via the Beckn Gateways, that becomes the backbone for ONDC. Beckn itself is built on top of CORD Network (Central Office Re-architected as a Datacenter). Beckn stands Blockchain Enabled Ecommerce for Knowledge Networks. It is the driving factor underlying ONDC. Beckn Gateways (BG) lie between BAP and BPP to provide all routing infrastructure or the transaction layer. BGs are extremely lean and stateless routing servers. The purpose of this infrastructure to optimize discovery of BPPs by the BAPs. Business wise, They should ensure a fair chance for all active BPPs to be discovered and to sell their goods.
Buyer and Seller Cycle
in ONDC
Below, I am also
providing a self-explanatory way to explain the Buyer-Cycle and the
Seller-Cycle of ONDC. It is more like a Business Process Flow Diagram
(Instance) of how a buyer will discover, search, purchase and pay using ONDC. It
also shows how a sellers can acquire consumers.
Below is the depiction
of the merchant cycle, for a given instance of purchase by a buyer. It shows
how the order is fulfilled via logistics providers. In a way, it shows how fairness
and competitiveness can be promoted among the buyers and the other members in
the chain like logistics providers.
Before I end this
article, I would also like to share the process flow for joining of buyer app
to ONDC and for joining of sellers to ONDC. Please note this is not related to
buyers registering on the buyer app or the sellers on the seller app.
Advantages of ONDC
In the end, we take a
look at all the advantages that ONDC brings to the world of digital commerce,
from buyer or seller viewpoint and also for the other participants in the
transactional or fulfilment cycle.
·
Government Backed Initiative (IndiaStack)
·
Increased Choice and a Fair Competition
·
Democratisation and Decentralization
·
Lower Prices / Competitiveness in Pricing
·
Efficiency in Logistics and Shipments
·
Ensured Data Privacy and Confidentiality
·
Support for Micro, Small, Rural Business
·
Easier Rollout of Discounts & Promotions
Current Businesses
(Buyers/Sellers) on ONDC (Sep 2023)
Buyer Apps – PayTM, Magicpin, SpiceMoney,
CraftsVilla
Seller Apps – Meesho, Snapdeal
[ Logistics ] – Ekart, Dunzo, Delhivery
Conclusion
ONDC does present a
promising opportunity and with a government backing is all the more
trustworthy. It has started off in multiple cities in India. Soon, It will be
launched in more cities and towns of India. It is to be seen whether this will take
on as the consistent platform of choice for big players or remain merely an
advantage for micro, small and medium businesses. In any case, It will continue
to foster innovation and there may be multiple platforms that are inspired from
ONDC. This may or may not be directly related to digital commerce.
References/Credits
To
ONDC-Wikipedia
Page
Beckn
for Developers
Government of India
(PIB)
PayTM
Blog on ONDC
Article - Business
Std.
Sumith Puri has 18+ years of Experience in Leadership, Conceptualization,
Architecture, Design and Development of Software Products and Services. He is
an Ex-Yahoo, Symantec, Huawei, Oracle*, Infosys. He is currently the Java
Practice Leader at Enterprise Minds, Bengaluru. This article is based on his
experience and thoughts from an associated Project related to the Buyer b2b Application/Platform
(ONDC/Beckn). He has completed his Executive Programs from each of Indian
Institute of Management, Kashipur (Entrepreneurship) and the Indian Institute
of Technology. Roorkee (Data Mining & Analytics). He holds the Bachelor of
Engineering (Information Science & Engineering) from Sri Revana Siddeshwara
Insitute of Technology, Bengaluru.
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