Open Network for Digital Commerce (ONDC) an initiative of the Department of Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce, Government of India, envisioned to create a facilitative model to revolutionize digital commerce, giving greater thrust to penetration of retail e-commerce in India.
Incorporated as a section-8 company in 2021 as a private sector-led non-profit company as an entity is expected to provide a start-up mindset for a population scale implementation. 19 institutions (consisting of banks and financial institutions - listed in the annexure) have invested startup capital of Rs 180 crore as equity.
Considering the national importance of this project, an Advisory Council has been in place since June 2021 with participation from the government and industry.
With the growth of the company, 12 board members have joined the company including three government nominees from the Ministries of Commerce and Industry (DPIIT), MSME, and Consumer Affairs. While 28 employees have joined ONDC, many organizations are complementing ONDC’s journey by contributing volunteers, professionals, and experts to work as part of the team.
ONDC is not an application, platform, intermediary, or software but a set of specifications designed to foster open, unbundled, and interoperable open networks, thereby eliminating the dependency on a single platform.
Major ONDC objectives are:
ONDC’s Beta testing phase in the city of Bengaluru was the first step in operationalizing a network approach to e-commerce as an alternative to a platform-centric approach. This will make the e-Commerce landscape more inclusive, accessible, and experience-driven for all consumers and sellers.
As part of the Beta testing phase, the network went live to public users in Bengaluru in Grocery and F&B categories in September 2022 with 5 buyer applications including PayTM, IDFC, Mystore, Spice Money, and Craftsvilla, 12 Seller applications which included GoFrugal, Growth Falcon, eSamudaay, Digiit, Ushop, Sellerapp, Bizom, uEngage, Innobits, eVitalRx, Mystore and nStore along with 2 logistics applications Loadshare, and Dunzo.
Since September, multiple other buyers, sellers, and logistics applications have gone live including ITC, EkSecond Technologies, Meesho, Uengage, Grab, Delhivery, and Shiprocket to a total of 26, and more than 70 participants are in advanced stages of integration.
ONDC has leveraged the Beta testing phase to fine-tune the operational performance of the network and is now entering a new stage of evolution with the objective of increasing transactions conducted through the network at a transformational scale.
Furthermore, ONDC is undertaking several new initiatives among which the Incentive Program is the earliest to be rolled out starting December 15, 2022. Through this one-time incentive program, the aim is to scale its current network of over 700 merchants across India in F&B and Groceries to more than 20,000 merchants in India across various categories.
This will be supplemented by the enablement of new categories like Fashion, Home, and Kitchen including Décor, Electronics, Beauty, and Personal Products which are expected to go live on the network in the next 4-8 weeks, thus extending the breadth of operations which will also be supported by new logistics network participants joining us to facilitate intercity logistics.
To further enhance the efficiency of settlements on the network, ONDC has developed a framework to support Reconciliation and Settlements, ensuring payments are correctly distributed to the right entities as defined in the digital contracts and service level agreements within defined timeframes.
The system is expected to go live by January and has been tested successfully and implemented by Kotak Bank and Protean, while the Bharat Bill Pay System (BBPS), an ecosystem conceptualized by the Reserve Bank of India (RBI) and driven by the National Payments Corporation of India (NPCI) are in advanced stages of development.
With the inauguration of ONDC’s official workplace, ONDC celebrates a milestone in completing the formalization of its organization’s presence.
“Every day we are engaged in solving new challenges and enabling solutions at the population scale. Our new office will finally bring together the best of our talents and foster a culture of collaboration and innovation like never before. Truly excited as we come together and work towards achieving our ambitious goals,” said T Koshy, Managing Director, and Chief Executive Officer, ONDC.