ONDC to take on Flipkart, Amazon with a hyperlocal search engine model

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ONDC to take on Flipkart, Amazon with hyperlocal search engine system

New Delhi: Imagine you wanted to eat a packet of crisps or a cold drink but you didn’t want to go out. So, you just need to open any e-commerce app on your mobile and add the chip pack to cart. However, seeing a long delivery time, you may not even place the order. This is where Open Network for Digital Commerce (ONDC) comes into play.
India’s ambitious open e-commerce initiative aims to connect consumers to smaller retailers and reduce the dominance of online retail giants. This UPI-like platform, meant to make e-commerce more inclusive and accessible to consumers, is gearing up to take on Flipkart, Amazon with a hyperlocal search engine model.

It is currently in pilot phase in 5 Indian cities – Delhi, Bangalore, Coimbatore, Bhopal and Shillong.

What will the ONDC do?

What UPI has done for payments, ONDC aims to do for retail. A kirana store owner in Coimbatore opens a popular payment app and searches for a product. What appears on his screen are the products available in his own shop.

“It’s because we are standing close to my store. If we had done the same exercise in another place where another merchant is connected to the network, the search results would show their products on the screen,” said the trader told ToI.

The default setting is based on proximity or closest location, making it an effective hyperlocal search engine.

Hyperlocal approach

The advantage of ONDC appears here in that it allows users to choose the default setting (whatever they want first – closest location, most discounts, etc.). A user looking to buy a packet of crisps will first find the sellers closest to their location, unlike e-commerce apps, which decide who is the best seller for a consumer.

“The consumer can change the default settings, for example, to the best available discount, and then the results will be based on a store’s best deals, even if it’s far away,” said Kumar Vembhu, CEO of GoFrugal, one of the early adopters on the ONDC network and provides software to vendors.

Once the product has been ordered, the user chooses their delivery partner from a list of logistics providers, whether it is an independent delivery person on a bicycle or a Dunzo executive on a motorcycle.

“Logistics partners, including the seller, who have connected to the network can also list their delivery costs for that particular item or distance and the customer can then choose based on profitability or fastest delivery,” Vembhu said.

Vembu believes that ONDC could become the only online network capable of making sustainable deliveries within 10 minutes.

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Vendors, who are part of the pilot, must be connected to the ONDC through third-party vendor software such as GoFrugal.

Recently, Trade and Industry Minister Piyush Goyal said that seven companies, including one buy-side app and five sell-side apps, have so far adopted ONDC protocols and created their own ONDC-enabled apps.
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