Let’s imagine -
Harsh is a local shopkeeper. He wants to take his business online and desire to become a PAN India direct-to-customer (D2C) brand.
Now the question is, How can he do that?
Well, here arise two cases:
“New Online Website”
He can start a new website and begin to sell his stuff online. But for that, he has to make a huge upfront investment. It’s not impossible as such, as he can take help of lots of E-Commerce service providers such as Shopify.
This process check following things -
Suppose he is successful in doing this. But the question is -
Are people going to buy things from him?
Will people even notice his presence online?
Because it takes a lot to make a presence online. He has to spend a good amount of money on ads and tools. This is time taking and involves a lot of capital which can discourage the user.
“E-commerce market places”
Listing products on platforms like Amazon and Flipkart helps a lot. It give their products needed exposure and every other spotlight.
Just by listing, it gets recommended and if purchased frequently can generate a good amount of revenue.
These giant E-Commerce websites, make things so easy that sellers feels comfortable to list their products on these websites. Because of these things, these websites are able to establish monopoly in India.
Now, the primary objective of their two American owned company is to make money. Both of these companies work as middleman and establish connection between sellers & buyers.
The Government of India, identified these problems and hence ONDC came into the picture.
Let’s see what ONDC is:
Open Network for Digital commerce (ONDC) is a section 8 company. It is establish by The Government of India to develop and build an open for all E-commerce Network. It is like a UPI network for the E-commerce stream.
Today, the online money transaction system is prevailing and making things easier.
Now, what if our online order system will become this much easier with only one common app?
That’s what ONDC is.
ONDC is not a software an application or and intermediary but an network based protocol.
It enable local shopkeeper, retailers across different segments such as grocery, mobility, hotel bookings, travel and many more, to be discovered by any E-commerce network enabled application.
Our current E-commerce experience in India is through big stores like Jio-Mart etc. These stores are full of different products with different brands applying their own rules. For example, Jio Mart. They decide the priority, presentation, price , and discount of the product to increase their profit.
In reference to this particular topic, let’s take a look on what Amazon do-
If a certain product is working well and getting enough customer attention then amazon just copy-paste the whole product and launch it under their brand name on cheaper price.
Now this will create a risk as in above example, if a brand does too well then these
Our E-commerce experience will change in so many ways. The Government will set rules for the buyers and sellers which is focused more on brands and public rather than on profit. With this The Government of India will gain more control over E-commerce in comparison to Flipkart and Amazon.
The ONDC platform lies within the middle of the interfaces hosting the consumers and also the sellers. So far, the client aspect interface is being hosted by Paytm, whereas the vendor aspect interface is being hosted by different players like GoFrugal, etc.
When a vendor searches for any item on the Paytm app, from wherever ONDC has gone live, the app can connect with the ONDC platform, and is able to connect it to merchandiser aspect interfaces that may list all the businesses from wherever you’ll purchase the actual item.
On ONDC, there’ll be many different backend partners like provision service suppliers, enterprise resource planners, e-commerce store hosting service suppliers, etc.
After this the small business owners doesn’t need to worry about their product being copied. The D2c brands like boat do not have to worry about the traffic from the E-commerce website like amazon and Flipkart as ONDC makes them closer to pure play direct-to-consumer brands.