India’s authorities in April launched its Open Community For Digital Commerce (ONDC) as a potential different to dominant world giants Amazon.com and Walmart in its fast-growing e-commerce market.
Here’s a description of the completely different shifting components of ONDC.
WHAT IS ONDC?
ONDC is a non-profit firm whose community will allow the show of services from all collaborating e-commerce platforms in search outcomes throughout all apps on the community.
For instance, if each Amazon and Walmart’s Flipkart combine their platforms with ONDC, a consumer trying to find a Bluetooth headset on Amazon would additionally see outcomes from Flipkart on the Amazon app.
WHAT ARE ONDC’S TRANSACTION TARGETS?
ONDC goals to boost e-commerce penetration within the subsequent two years to 25% of India’s client purchases, from almost 8% now, in a rustic of 1.35 billion individuals.
It additionally hopes to enroll 900 million consumers and 1.2 million sellers on the shared community inside the subsequent 5 years, whereas reaching gross merchandise worth of $48 billion.
The federal government estimates that India’s e-commerce market was value greater than $55 billion in gross merchandise worth in 2021 and can develop to $350 billion by the tip of this decade. At the moment, Amazon and Walmart’s Flipkart management greater than 60% of the market.
HOW DOES ONDC AIM TO BOOST COMPETITION?
The federal government says current platforms work in silos and are tightly managed, maintaining out many small gamers. It expects ONDC to extend competitors and foster innovation by start-ups.
It additionally hopes to usher in logistics corporations and others who can collaborate with sellers to ship merchandise to prospects.
The main focus can be on small retailers and rural shoppers, with apps in Indian languages.
ONDC officers liken the community to a mall with 1,000 gates as a substitute of simply two, thereby limiting alternatives for chosen sellers to obtain preferential remedy – a typical accusation in opposition to main e-commerce firms.
Customers will have the ability to price service suppliers on ONDC, which can be relevant and visual throughout the community.
The federal government says ONDC will assist to finish “predatory pricing, particularly in high-margin, high-value merchandise”. Amazon and Flipkart deny that they’ve engaged in predatory pricing.
WHAT CHALLENGES DOES ONDC FACE?
ONDC goals primarily to faucet hundreds of thousands of small companies that always lack technological experience, so the federal government must run an enormous consciousness marketing campaign to get them on board, stated the Confederation of All India Merchants, a bunch that represents 80 million such companies.
Smaller companies with low volumes may additionally lack the assets to match the reductions provided by heavyweights like Amazon and Flipkart.
Supply: Live Mint