ONDC Explained: Understanding The 'UPI Of E-Commerce'
Summary
TLDRThe Open Network for Digital Commerce (ONDC) is an ambitious project by the Indian government, aiming to revolutionize e-commerce like UPI did for digital payments. It envisions a single platform where users can compare prices across major retailers like Amazon and Flipkart, promoting competition and reducing hidden charges. ONDC empowers small sellers, offering a level playing field without platform biases. The project is already piloting in several cities, promising a future where consumers have more choices and control. However, its success depends on company participation and matching current e-commerce giants' service standards.
Takeaways
- 🛍️ ONDC stands for the Open Network for Digital Commerce, an initiative with the potential to revolutionize e-commerce and online shopping in India.
- 📈 ONDC is considered the Government of India's most ambitious project after UPI, aiming to unify various online shopping platforms into a single meta store.
- 🛒 The platform could include major retailers like Amazon, Flipkart, and others, offering a comprehensive shopping experience from food to fashion and payments.
- 🆚 ONDC aims to democratize digital commerce by allowing consumers to compare prices and deals from different platforms on a single page, promoting competition and transparency.
- 💰 The initiative is designed to give more power to consumers by providing more choices, which can lead to better deals and lower prices.
- 🏪 It benefits small and medium enterprises (SMEs) and local stores by giving them a level playing field against larger e-commerce platforms.
- 📊 Currently, Flipkart and Amazon control over 60% of India's e-commerce market, and ONDC is a step towards addressing this market concentration.
- 🛍️ The platform operates on an open network, showing results across various e-commerce platforms, which can help consumers find faster and cheaper options.
- 🚚 ONDC allows consumers to choose different delivery partners, even if the seller's app cannot deliver to their address, offering more flexibility.
- 🔍 The success of ONDC will depend on the number and types of companies that sign up for the network and the quality of the technology behind it.
- 📅 Pilots for ONDC have already started in five cities, with plans to expand to 100 cities and towns by August 2022.
Q & A
What does 'DC' stand for in the context of the video script?
-DC stands for the 'Open Network for Digital Commerce', an initiative that aims to revolutionize e-commerce and online shopping.
How is ONDC different from existing e-commerce platforms like Amazon and Flipkart?
-ONDC is an open network that allows any buyer to connect with any seller who signs up for the platform, unlike closed networks of existing e-commerce platforms.
What is the potential impact of ONDC on the consumer's shopping experience?
-ONDC could democratize digital commerce by providing more choices and power to consumers, leading to better deals and prices as platforms compete for the best price.
How does ONDC address the issue of market monopolization by large e-commerce platforms?
-ONDC provides a level playing field for small sellers and retailers by eliminating platform biases and allowing them to compete fairly with larger players.
What is the significance of Nandan Nilekani's involvement in ONDC?
-Nandan Nilekani, the co-founder of Infosys and the man responsible for Aadhaar, is the mastermind behind ONDC, bringing his expertise in technology and innovation to this initiative.
How does ONDC benefit small and medium enterprises (SMEs) and local store owners?
-ONDC allows SMEs and local stores to compete with larger e-commerce platforms by providing them visibility and access to a wider customer base without platform biases.
What are the two basic models of e-commerce platforms in India mentioned in the script?
-The two basic models are the 'marketplace model', where the platform connects buyers and sellers and takes a percentage cut, and the 'inventory model', where the platform buys in bulk and sells at a higher price for increased profit margin.
Why is the Indian government concerned about the dominance of Flipkart and Amazon in the e-commerce market?
-The dominance of these platforms can lead to market monopolization, exclusion of small players, and imposition of their price terms, which is not favorable for a diverse and competitive market.
What is the current status of ONDC pilots and their expansion plans?
-ONDC pilots have already started in five cities, with plans to expand to 100 cities and towns by August 2022.
What are the potential challenges that ONDC might face in its implementation?
-Challenges include the willingness of companies to sign up for ONDC, the quality of technology to compete with e-commerce giants, and ensuring trusted goods, delivery partners, and services that match up to consumer expectations.
How does ONDC provide flexibility in delivery options for consumers?
-ONDC allows consumers to choose different delivery partners from the ONDC pool, even if the seller app cannot deliver to their address or is charging high delivery fees.
Outlines
🛍️ Revolutionizing E-commerce with ONDC
The first paragraph introduces the concept of the Open Network for Digital Commerce (ONDC), a government of India initiative aiming to transform e-commerce and online shopping. It is compared to the Unified Payments Interface (UPI), suggesting a similar disruptive impact. The script explains how ONDC could consolidate various e-commerce platforms, such as Amazon, Flipkart, and others, into a single 'meta store' application. This would allow consumers to compare prices and services across platforms easily, potentially leading to better deals and transparency. The paragraph also touches on the potential benefits for small and medium enterprises (SMEs) and the broader economy, as well as the challenges posed by market monopolies, particularly by Amazon and Flipkart, which currently dominate the e-commerce landscape in India.
🚀 ONDC's Impact on Small Sellers and the Future of E-commerce
The second paragraph delves into the operational aspects of ONDC, emphasizing its benefits for small sellers and the potential to level the playing field in e-commerce. It discusses the current models of e-commerce in India, including marketplace and inventory models, and how large platforms can sometimes limit competition and favor certain sellers. ONDC is presented as a solution to these issues, offering an open network that could allow consumers to see a wider range of options, including local stores, and choose from various delivery partners. The paragraph also mentions the pilot projects of ONDC and the ambitious goal of expanding to 100 cities by August 2022. However, it raises questions about the adoption rate of ONDC by companies and the technological challenges of competing with established e-commerce giants, which offer services like trusted goods, delivery, and return policies.
Mindmap
Keywords
💡Digital Commerce
💡ONDC
💡Unified Platform
💡E-commerce Giants
💡Marketplace Model
💡Inventory Model
💡SMEs
💡Kirana Stores
💡Monopolization
💡Pricing Power
💡Delivery Partners
Highlights
DC stands for the Open Network for Digital Commerce, an initiative with the potential to revolutionize e-commerce and online shopping.
ON DC is the government of India's most ambitious project after UPI, aiming to create a unified platform for all online shopping needs.
The concept of ON DC is to have a meta store or an everything store for all shopping needs, including Amazon, Flipkart, and more, all on one platform.
ON DC could be the one app for all apps, integrating food, fashion, payment, travel, and more into a single application.
Consumers on ON DC can connect with any seller who signs up for the platform, offering a wide range of choices and empowering consumers with better deals.
ON DC could democratize the digital commerce space by allowing consumers to compare prices from different platforms on a single page.
Tech pioneer Nandan Nilekani, known for co-founding Infosys and Aadhaar, is the mastermind behind the ON DC initiative.
ON DC aims to address the dominance of Flipkart and Amazon in India's e-commerce market, which together control over 60% of the market.
The Indian government expects the e-commerce market to grow to 350 billion dollars by the end of the decade.
ON DC could help small sellers and retailers by providing a level playing field without platform biases, allowing them to compete fairly.
ON DC could enable consumers to choose different delivery partners for their orders, even if the seller's app cannot deliver to their address.
ON DC pilots have already started in five cities, with plans to expand to 100 cities and towns by August 2022.
The success of ON DC depends on the number and type of companies that sign up for the platform, which is still uncertain.
ON DC will need to match the services provided by current e-commerce giants, such as trusted goods, delivery partners, and timely return policies.
Nandan Nilekani believes that ON DC is an idea whose time has come, suggesting that it could significantly impact the future of digital commerce in India.
Transcripts
[Music]
hi there i'm sorel merotra kapoor and
let's talk on dc
on dc stands for the open network for
digital commerce an open network which
has the potential to revolutionize
e-commerce and online shopping for both
you and i
it is government of india's most
ambitious project after upi
in fact on dc could do to online
shopping what upi did to digital
payments
meaning
one meta store
one everything store for all your
shopping needs yes all
imagine amazon flipkart mintra all on
one platform
in fact imagine amazon flipkart mintra
big basket tomato paytm even uber
all on just one app
that folks is on dc
the one app for all your apps
food fashion payment travel all in one
any buyer on on dc can connect with any
seller who signs up for the platform and
this is not just for placing orders of
course you get to buy apple the phone
apple the fruit all in the same place
but also
you do this at the best deal and best
prices
how
well it's quite simple
more choices mean more power in the hand
of the consumer when you and i will get
to compare amazon and flipkart prices on
one page zumato and swiggy on one page
uber and ola on one page it will
automatically lead to platforms
competing for the best price
curbing their pricing power and then
bye bye hidden charges and inflated
delivery rates on dc truly has the
potential to democratize the entire
digital commerce space
still confused let's try another way
remember this guy
and this is
[Music]
the lowest price for this hotel room
well on dc is basically trivago for all
things online shopping but this is not
the only reason why government is
rolling out ontc by the way tech pioneer
nanda nilkani the co-founder of
enforcers and famously the man
responsible for aadhaar is the
mastermind on this initiative as well so
to understand the true purpose behind
ondc let's look at what on dc will do
for smes or your kirana store owners and
also the economy
now there are thousands of e-commerce
websites in india but two of them
flipkart and amazon control over 60
percent of india's e-commerce market a
market which the government expects to
grow to 350 billion dollars by the end
of the decade but why is that a problem
because currently your favorite apps or
closed networks keep out several small
players retailers delivery firms piranha
stores which form the backbone of
india's retail system
in fact last year india's restaurant
owner's body filed a complaint against
food aggregators omato and swiggy along
similar lines accusing them of
monopolizing the market and imposing
their price terms on partner restaurants
so are these allegations true
well to understand this let's break down
how exactly do these online platforms
actually make money there are two basic
models e-commerce platforms in india
follow a marketplace model and an
inventory model let's talk about
marketplace first
now in marketplace the website or app
only acts like a platform that connects
the buyer and seller and then they take
a percentage cut when the particular
product is sold
cut to the inventory model
where the platform buys directly from
the seller in bulk using its bargaining
power to buy cheap and then sell it at a
higher price increasing their own profit
margin
the e-commerce obviously ends up making
the maximum profit from this model also
these platforms can then push up
commodities by sellers who they've
bought and bulk from and project
exclusive deals and offers thus pushing
out other sellers
india in fact does not allow foreign
direct investment in inventory dribble
models which meant that amazon and
walmart owned flipkart and a few others
can only use the marketplace model
unlike say in united states so now to
make maximum profits what will the
e-commerce sites do
they can still limit their search
results to brands which have tied up
with the platform i.e throw on top of
the search results give maximum
visibility to their favored sellers
where they get maximum margins
also these platforms control power of
pricing goods and logistics like
delivery
that's where ondc comes in
with an open network in the picture
showing you results across e-commerce
platforms you gain in multiple ways
number one you end up discovering a
local store near you which could bring
you what you need faster and cheaper
number two
this in fact gives small sellers and
retailers a level playing field
no platform biases
and number three and this is my favorite
in case a seller app can't deliver to
your address or suppose zumato is
charging you too heavily for deliveries
you can actually choose another delivery
partner from the on dc pool
so you can say okay let me order the
food from zumato but use dunzo to
deliver it to me
revolutionary right and this is not just
a concept for the future guys it's here
already
dc pilots have already started in five
cities and they aim to cover 100 cities
and towns by the august of 2022 sounds
too good to be true
might be because there is a catch how
many companies and importantly which all
companies sign up for on dc is still to
be known it is their call after all for
now we know that several big tech
companies retail majors and even banks
are in talks to join the on-dc entire
network the other big question is
whether the technology will be good
enough to actually compete with the
current e-commerce majors current
e-commerce giants ensure trusted goods
trusted delivery partners timely return
policies and other such services on dc
will have to match up to that
but with some of the country's best
minds working on it you never know maybe
as nandan nilkani says it's an idea
whose time has truly come for more such
updates stay tuned to money control
[Music]
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