Consumers in Bengaluru can now shop across multiple ranges of products and services from a single shopper app of their choice. In addition, consumers can place their orders in two categories: grocery restaurants. This was made possible through the applications of buyers participating in the network.
MyStore, PayTM and SpiceMoney are available as shopping apps in ONDC.
Open Network for Digital Commerce (ONDC) was launched in Bangalore to reduce the dominance of the two major players in the e-commerce market – Flipkart and Amazon. The services will be available to the public in Bangalore for the time being.
The government has taken the initiative to help small retailers and create an alternative to the dominant global chains like Amazon and Walmart.
The two markets control India’s half of the booming e-commerce market.
Consumers in Bangalore can now shop across different product categories on a single platform of their choice. Consumers can choose products in two areas: grocery stores and restaurants.
Orders can be placed in two categories – grocery stores and restaurants using any shopper apps participating in the ONDC network.
Trade and Industry Minister Piyush Goyal revealed in a tweet that the ONDC network will prove to be democratic, profitable and empower buyers and small businesses.
He further added that the ONDC network will provide consumers in Bengaluru with a new shopping experience.
Beta testing of the government’s groundbreaking open network for digital commerce already kicked off on September 30.
The government believes that the ONDC will help end the monopoly of the major players in the e-commerce market and further increase the reach of small merchants.
The Minister of Trade and Industry has launched the pilot phase of ONDC in five cities including Bengaluru, Delhi NCR, Bhopal, Shillong and Coimbatore.
Many nationally known organizations have invested in the INR 255 crore network and lenders include popular banks such as State Bank of India, UCO Bank, HDFC Bank, ICICI Bank and Bank of Baroda. The initiative was launched on December 31, 2021 and started with a financial investment from the Quality Council of India.
It is not an application or software but a set of specifications designed to regulate exchanges and connections between buyers, technology platforms and retailers.
ONDC refers to the set of standards voluntarily adopted by sellers or logistics providers or payment gateways.
ONDC will allow local store owners in various categories such as mobility, grocery, food ordering, delivery, hotel booking and travel to showcase their products and provide services in any of the research apps.
If Amazon and Walmart’s Flipkart join their platforms with ONDC, a user searching for a key product will see results from both Flipkart and Amazon.
How will the ONDC network work?
The ONDC network has created great popularity among traders as it focuses on creating an inclusive market. PayTM is only active on the seller’s side while on the buyer’s side, many applications have gone live including Digit, eSamudaay and Gofrugal Technologies.
Dunzo and LoadShare are the two logistics providers integrated into the ONDC network.
There are three levels of commission: the buyer level, the seller level and the logistics level.
The buyer’s applications will be based on the network’s customer-facing platforms. Accordingly, they will charge a buyer’s fee.
PayTM is the only sell-side application that is currently on board and charges a 3% commission. Additionally, seller fees will also be charged through the network as merchants will be linked to the network through seller apps. They will manage inventory and orders.
Sellers can also decide to charge a delivery fee or provide free delivery service depending on the distance.
Otherwise. Vendor apps will not charge any retailer who earns less than INR 1 lakh per month for life.
The initiative will allow small businesses to increase their turnover at a lower cost. Cloud kitchens usually operate through Zomato, Swiggy, or any other food delivery service that charges high commission fees. A 10% commission on restaurant services will prove beneficial for small retail businesses.
Currently, 60 merchants have joined in the business with no onboarding fees but only a transaction fee.
In addition, end consumers are charged less for the services provided.
The digital commerce open network kicked off its launch with 161 orders on the first day in Bengaluru. Services are initially provided to consumers from 16 pin codes in Bengaluru.
The beta release is intended to provide early feedback for necessary changes to take place. The attempt is to see if the transactions are carried out successfully and if the products reach the end consumers. The next step focuses on building trust in the system. The network will soon be operational nationwide.
edited and proofread by nikita sharma