ONDC Explained: Analysis and How To Register

As we look towards 2024, the digital marketplace landscape is continuously evolving, offering new platforms and networks that promise to revolutionize the way sellers connect with buyers. One such groundbreaking initiative is the Open Network for Digital Commerce (ONDC). ONDC is an initiative by the Government of India aimed at democratizing digital commerce, providing a level playing field for all retailers, and reducing the dominance of a few e-commerce giants. Understanding what ONDC is, how it works for a seller, and why sellers should consider using it in 2024, is crucial for anyone looking to thrive in the e-commerce domain. 

What is ONDC? 

The Open Network for Digital Commerce (ONDC) is an initiative designed to promote open networks developed on open-sourced methodology, using open specifications and open network protocols, independent of any specific platform. ONDC is envisioned to break the current monopolistic nature of the digital commerce platforms, where a few large players dominate the market. This network aims to enable small and medium-sized businesses to compete on fair terms with the giants of the e-commerce world. 

ONDC can be used by sellers from many businesses, such as clothing, food, and furniture. Picture is a graph showing ONDC's connection with all.

How does ONDC work? 

ONDC platform uses a decentralized model where buyers and sellers transact through a network of interconnected platforms without being locked into a single platform. This is achieved by standardizing the way digital commerce transactions are conducted, making it possible for any vendor to sell and any buyer to purchase regardless of the platforms they are using. 

1. Protocols and Standards 

ONDC establishes common protocols and standards for listing, discovery, and payments, ensuring that these processes can work seamlessly across different platforms. 

2. Interoperability 

 It ensures interoperability among different platforms. This means a seller on one platform can sell to a buyer on another platform without either party having to join the other’s platform. 

3. Decentralization 

 Instead of transactions being controlled by a single entity, they are decentralized across multiple platforms. This aims to reduce monopolistic practices and foster a more competitive marketplace. 

Example- Understanding ONDC

Let’s consider a small example involving three key entities on the ONDC network: a buyer, a seller, and a logistics provider. 

1. Listing and Discovery 

   – Seller: A local bookstore lists its inventory on a platform that’s part of the ONDC network. 

   – Buyer: Looking to purchase a specific book, the buyer uses a consumer app, also on the ONDC network, to search for the book. The search results include options from multiple sellers, including the local bookstore. 

2.  Transaction  

   – The buyer selects the book from the local bookstore and proceeds to checkout. Despite the buyer and seller using different apps/platforms, the transaction is facilitated by the ONDC’s standardized protocols. 

3.  Fulfillment  

   – Once the order is placed, a logistics provider within the ONDC platform is engaged to deliver the book from the bookstore to the buyer’s address. The logistics provider has access to both the buyer’s and seller’s details through the network, enabling efficient order fulfillment. 

This example demonstrates how ONDC enables a seamless transaction between a buyer and a seller using different platforms, with logistics also integrated into the process. By doing so, it aims to create a more open, inclusive, and competitive digital commerce ecosystem. 

How ONDC Works for a Seller? 

For sellers, ONDC proposes a transformative approach to digital commerce. It operates by creating a unified platform where sellers can list their products and services, which can then be accessed by buyers across various front-end platforms participating in the network. Here’s a breakdown of how it works for a seller: 

1. Registration and Listing 

Sellers begin by registering on the ONDC platform and listing their products or services. This process is designed to be straightforward, ensuring ease of access for all sellers. 

2. Unified Catalog  

Once listed, a seller’s products become part of a unified catalog that is accessible across all customer-facing platforms that are part of ONDC. This significantly increases the visibility of the seller’s offerings. 

3. Receiving Orders 

Orders are placed through various apps and platforms connected to ONDC, allowing sellers to receive orders from a wide array of sources, not just a single platform. 

4. Fulfillment and Payment 

Sellers are responsible for the fulfillment of orders, but the process is facilitated by ONDC’s standardized protocols for payments, logistics, and order tracking, simplifying these operations. 

5. Ratings and Feedback 

Sellers can receive ratings and feedback directly through the network, helping to build reputation and trust across multiple platforms. 

6. Dispute Resolution 

While ONDC itself isn’t directly involved in transactions, it recognizes the need for a robust conflict resolution system. This is where ODR comes in. Integrated into the Issue & Grievance Management (IGM) framework, ODR provides a platform for buyers, sellers, and other participants within the network to resolve disputes efficiently and fairly. Whether it’s product quality issues, delivery mishaps, or service disagreements, ODR offers a multi-step process involving direct communication, escalation to the ODR platform, and finally, different resolution methods like mediation or arbitration.  

Why Should a Seller Use ONDC in 2024? 

The benefits of ONDC Platform for sellers, especially as we move into 2024, are substantial. Here’s why sellers should consider joining the ONDC network: 

1. Increased Visibility 

ONDC’s unified catalog system means that sellers no longer need to rely on a single platform for visibility. This opens a vast new customer base, previously unreachable through traditional e-commerce platforms. 

2. Reduced Dependency on Large Platforms 

By reducing dependency on large e-commerce platforms, sellers can avoid high commission fees and strict platform rules, increasing their profit margins and operational freedom. 

3.  Level Playing Field

ONDC aims to provide a level playing field for all sellers, regardless of their size. This means small and medium-sized enterprises (SMEs) can compete with larger players, offering their unique products and services without being overshadowed. 

4. Enhanced Customer Trust 

Being part of a government-backed initiative can enhance customer trust in sellers. Furthermore, the standardized ratings and feedback system across platforms can help build a seller’s reputation more effectively. 

5. Innovation and Growth 

The open nature of ONDC encourages innovation, as sellers can access various services (like logistics, payment, and analytics) from different providers within the network, allowing them to optimize and grow their business according to their specific needs. 

6. Cost Efficiency 

The potential for reduced transaction fees and the elimination of platform-specific marketing and advertising costs make ONDC an economically attractive option for sellers. 

7. Access to Data and Insights 

Sellers on ONDC can benefit from access to data and analytics across the network, offering valuable insights into customer behavior, market trends, and performance metrics, aiding in informed decision-making and strategic planning. 

A robust Order Management System(OMS) like PointNXT seamlessly integrates with the Open Network for Digital Commerce (ONDC), facilitating efficient order processing and inventory management within the ONDC ecosystem.   

ONDC Logo

How to register on ONDC as a seller? 

Starting as an e-commerce seller on the Open Network for Digital Commerce (ONDC) involves a series of steps. Here’s a general guide on how you can register as an e-commerce seller on ONDC:

1. Understand ONDC

Before you begin, it’s essential to understand what ONDC is and how it operates. ONDC is not a platform; it’s a network that enables buyers and sellers to connect and transact with each other without being on the same platform. It aims to make e-commerce more inclusive and accessible.

2. Check Eligibility and Requirements

Ensure you meet the eligibility criteria and understand the requirements for becoming a seller on the ONDC network. Some of them include having a registered business, PAN Card, GSTIN, bank account, etc.

3. Register Your Business

You need to register your business with ONDC by signing up through their official portal or through a partner platform that is already integrated with ONDC. This process may involve submitting business details, bank account information, GSTIN, and other relevant documents for verification.

4. Choose a Partner Platform

Since ONDC operates through a network of partner platforms, you will have to select one or more platforms (e.g., e-commerce marketplaces, service providers) that are integrated with ONDC. These platforms will act as intermediaries facilitating your transactions on the ONDC network. PointNXT OMS offers easy integration with ONDC.

5. Integrate Your Business Operations

Depending on the partner platform(s) you choose, you’ll need to integrate your business operations. This can include catalog management, order management, inventory updates, pricing, and logistics. Ensure your systems are compatible with the ONDC protocols for seamless integration.

6. Understand the Pricing and Commission Structure

Familiarize yourself with the commission and fee structure of the partner platform(s) and ONDC. This will help you price your products or services competitively while maintaining profitability.

7. Prepare Your Catalog

Prepare your product or service catalog according to the ONDC guidelines. This typically involves creating detailed product descriptions, high-quality images, pricing, and stock availability. Your catalog will be a crucial factor in attracting customers on the ONDC network.

8. Go Live and Start Selling

Once your business is registered, and your catalog is ready, you can go live and start selling on the ONDC network. Ensure you have operational logistics and customer service in place to handle orders and queries.

9. Monitor Performance and Optimize

After going live, it’s important to monitor your business performance on the network. Utilize analytics and feedback to optimize your offerings, improve customer service, and adjust your pricing strategy as needed.

10. Stay Updated and Compliant

Keep yourself updated with the latest ONDC policies, guidelines, and technological updates. Ensure your business remains compliant with the network’s rules and regulations to avoid any disruptions.

Starting on ONDC as an e-commerce seller offers a unique opportunity to reach a broader audience without being tied to a single platform. By following these steps and staying committed to providing quality products and services, you can successfully grow your business on this innovative network. Keep in mind that ONDC is evolving, and staying informed about its developments will be key to your success.

Learn more about joining ONDC as a seller through ONDC’s official page.

Conclusion 

As we advance towards 2024, the ONDC is set to become a key player in the e-commerce landscape, offering a new paradigm for digital commerce that benefits sellers and buyers alike. For sellers, joining ONDC represents an opportunity to expand their reach, reduce costs, and compete on equal footing in the digital marketplace. With its promise of increased visibility, cost efficiency, and access to a broader customer base, ONDC is poised to be a game-changer for sellers looking to capitalize on the digital economy of the future. As the network grows and evolves, embracing ONDC could well be a strategic move for sellers aiming to succeed and thrive in the competitive e-commerce arena of 2024. 

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