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eCommerce 08 Sep 2022

How ONDC is Changing the Game in eCommerce Industry

Author Nevil Bhatt

Writen by Nevil Bhatt

Viewed 8 min read

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If you are reading this article, you must have some knowledge or overview of ONDC; however, do you know the true notion of ONDC and what variations it will bring in? For example, is it the new government-run online marketplace in India or something else entirely? And what are the effects of ONDC on eCommerce?

This article has the answers to all of these crucial questions. According to Statista, it is estimated that the market size of the eCommerce industry will be 350 billion dollars by 2030. And this stat is enough to hire an eCommerce development agency for your business.

Potential Effects of ONDC on eCommerce Software Development?

How does the Open Digital Commerce Network (ONDC) function?

While we will discuss the effects of ONDC on eCommerce, the core function of the Open Network for Digital Commerce (ONDC) is to serve as a meeting place for businesses and consumers who may exchange goods and services. In addition, the flexibility offered by ONDC ensures that buyers and sellers may complete transactions using any of their preferred digital channels.

Let’s say that the customer is on platform A and the vendor is on platform B. A transaction is often impossible unless both parties are on the same platform. However, suppose both Platform A and Platform B participate in ONDC. In that case, the purchaser may easily find the vendor and make a transaction. They may do business over the open network, whatever device or software they use.

Potential Effects of ONDC on eCommerce Software Development?

Three Domains of ONDC

ONDC will service three domains in the first phase: the Retail domain, the Wholesale domain, and the Logistics domain.

  1. The retail domain includes transactions between individual consumers and retail outlets for products and services.
  2. The wholesale domain comprises the transactions between retailers and wholesalers, distributors and manufacturers for the products.
  3. The logistics domain includes transactions between sellers and logistics services to enable the physical transfer of goods from sellers to buyers.

How is ONDC different from other e-commerce players?

  • Current e-commerce systems’ major drawbacks have prompted the hunt for other solutions.
  • Present-day e-commerce platforms function by introducing businesses and consumers only inside their apps.
  • The e-commerce titans are vested in keeping product selection narrow and seller options low for their benefit.
  • The smaller vendors’ ability to enter the market with a competitive offering is hindered due to these actions.

Instead, the ONDC platform allows all vendors to be seen by a more extensive customer base. As more and more consumers and merchants join the network, a “gateway” mechanism is established through which they may do business on any platform that suits them.

This facilitates a streamlined online shopping experience for all parties involved. In addition, the ease of not needing both parties to be present on the same platform to complete a transaction is another way the platform improves consumer user experience.

Critical Benefits of ONDC for Buyers

  • Many options are available from various vendors to get the best price
  • An exceptional method to support the digitalization of enterprises
  • One of the most important aspects of every commercial transaction

Critical Benefits of ONDC for Sellers

  • Getting familiar with a diverse client base
  • Improved product and price discoverability
  • Online transactions need fewer resources and less money to launch.

The ONDC’s open-network foundation is its strongest suit. Since most e-commerce behemoths operate on their own closed source systems, this is a novel approach to digital e-commerce. Algorithms are modified to fit their specific requirements, and the resulting data analytics are kept secret.

As a result, it becomes tough for regulatory organizations to enact effective rules and regulations to promote free and fair markets and equitable access to opportunity for all.

To understand the effects of ONDC on eCommerce, let us know for what purpose it exists.

For what purposes does the ONDC exist?

It’s safe to say that the world of online payment processing has been revolutionized by the Unified Payment Interface (UPI). ONDC aims to achieve the same results for online stores.

The primary goal is to “democratize” electronic trade by moving it away from platform-based companies like Amazon and Flipkart and toward a more streamlined, decentralized system.

ONDC may make more vendors accessible online. In addition, a public network will be used to conduct the electronic trades. These are some of the positive effects of ONDC on eCommerce.

Merchants and customers may be able to overcome the obstacles and silos that now exist thanks to this system, as reported by those engaged in its development. Sooner or later, it will affect every industry, from online and brick-and-mortar stores to restaurants and transportation apps.

Should Traditional Companies Be Afraid of the ONDC?

Flipkart and Amazon often seem to come up when talking about internet purchasing. This is so because they are the mammoth eCommerce powerhouses that set the tone for retail in India. These online marketplaces play a crucial role as massive intermediaries between buyers and suppliers.

Even if you buy a watch from an online retailer for 60% off the retail price (Rs 2,500), the retailer still makes a considerable profit, which is bad for local businesses.

India’s government has developed an “Open Network for Digital Commerce” (ONDC) program to reduce aggregators’ dominance and facilitate offline enterprises’ transition to the digital realm.

Why should the market embrace Open Network for Digital Commerce now?

All of this may cause you to feel compelled to raise a fundamental question: why should we accept this ambitious project while it is still in the planning stage? The solution to this problem is to provide more significant incentives.

Rarely does one get the chance to participate in a project that is the first of its type and aims to give access to a more significant number of consumer channels, third-party channels, and reduced expenses associated with the acquisition of customers with the help of an eCommerce development agency?

Those who get on board with the platform early will have the edge over later adopters. They will also have the option to collaborate in creating the network and the growth and co-management of the business ecosystem.

They will play a leading role in the transformation of digital commerce and have the opportunity to have input into establishing network regulations for the Open Network for Digital Commerce (ONDC) while it is still in its infant stages.

Operating Theory Behind ONDC that Will Change eCommerce Forever

Amazon and Flipkart are the two most prominent businesses in India’s e-commerce, holding most of the market share. It is so difficult for other eCommerce platforms and merchants to carve out a niche for themselves in the market.

The operational model of ONDC is based more on network-centric tactics than platform-centric tactics because of the way it is designed to function. The network aims to consolidate all the different eCommerce platforms into a single location.

In addition, some of the larger dealers have a dominant market share on both platforms, making it difficult for smaller dealers to expand their operations. Therefore, ONDC will ensure that all platforms, dealers, sellers, and delivery partners use the same prominent platform.

The objective of the ONDC is to broaden access to the digital economy. Now, the small and medium-sized company players can swiftly register themselves on the digital commerce platform and attract the attention of the large-sized dealers or sellers who have monopolies.

Critical Effects of ONDC eCommerce

The ONDC will bring about overall change to this circumstance. ONDC will not function as an online shopping website or a marketplace to sell or purchase the items. Instead, it is a network in which many parties, including buyers, sellers, and delivery partners, will register themselves as participants. A link will be made between all of these organizations and entities. As a result, a cross-connection will be assured to facilitate the establishment of a marketplace that is both more extensive and centralized.

How Can NFlowTech Assist You in Modern-day eCommerce Software Development

So, learning about the effects of ONDC on eCommerce – if you have decided to begin your digital adventure, the first thing you will need is an eCommerce website or platform and an eCommerce development agency. This will be the essential item you will need. You can showcase your wares to a broad audience and geographic range with the support of ONDC. Consequently, the digital buying experience of your user base must be improved through your eCommerce website.

At NFlow Tech, as a top-notch eCommerce development agency, we can provide you with the support of a team of skilled and experienced developers that can help you develop an eCommerce website. The website will be constructed, planned, and moulded according to your specific specifications so that a beautiful experience may be had by both you and your consumer base.

Author Nevil Bhatt
Nevil Bhatt

Nevil is the owner of one of the fastest-growing digital marketing agency in India. Having a great knowledge of the IT field and business management, he decided to bring a revolution in the digital world by providing valuable and customised solutions across the globe. Whether it's real or digital, he knows how to handle sustainable relationships and meaningful interactions.

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