Open Network for Digital Commerce (ONDC): In Depth Analysis to Revolutionize the E-Commerce Industry in India

Abstract

Open Network for Digital Commerce (ONDC) is an initiative aiming at promoting open networks for all aspects of exchange of goods and services over digital or electronic networks. ONDC is to be based on open-sourced methodology, using open specifications and open network protocols independent of any specific platform (Press Information Bureau Government of India 06 APR 2022). India is experiencing rapid economic growth and a rising consumer market, with a projected increase in Internet users to 900 million by 2030. This growth has resulted in an increase in digital payments, supported by government initiatives such as the Unified Payment Interface (UPI) and RuPay. As of November 2023, UPI alone processed a record-high of 11.24 billion transactions valued at 12.11 trillion (National Payments Corporation of India’s (NPCI)). The expansion of the digital payments ecosystem and the growth in Internet penetration and incomes have led to a significant expansion of the ecommerce sector in India (https://www.ibef.org/industry/ecommerce). However, a small number of major companies currently dominate the market. To address this, India has launched the Open Network for Digital Commerce (ONDC) Initiative to promote a more democratized e-commerce sector and support the growth of India’s seller-ecosystem. ONDC intends to create a more extensive network that enables buyers and sellers to communicate and conduct transactions regardless of the platform they use. This would democratize the e-commerce ecosystem in India and promote a more open and inclusive environment for businesses of all sizes to participate in the exchange of goods and services (https://pib.gov.in). This paper emphasis on exploring the potential for ONDC to address the needs and concerns of different stakeholder groups, and to facilitate collaboration and cooperation within the ecosystem and to understand the technology combehind the open networks and how ONDC is compared with the UPI technology.

Keywords: E-commerce, Open Network for Digital Commerce (ONDC), UPI technology.

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