ONDC Explained: What Is It and How Does It Work?

The Open Network for Digital Commerce (ONDC) is a new project by the Government of India. It aims to transform the way online shopping and transactions happen. Unlike traditional platforms like Amazon or Flipkart, where buyers and sellers can only interact within their own apps, ONDC allows different digital stores to connect. 

Think of ONDC like a digital road network, where various apps are like shops along the road. These shops can connect and work together, giving users more freedom and choice. The goal is to create a fair and open market where no single platform has too much control.

Chapter 1: How Is ONDC Different?

In today’s e-commerce world, companies like Amazon and Flipkart act as "walled gardens." They keep users within their apps and don’t allow interaction with other platforms. ONDC changes this by letting sellers and buyers use different apps while still being able to do business together. This breaks down the control these big platforms have and creates more opportunities for small businesses to compete.

Chapter 2: Who Runs ONDC?

ONDC is managed by a non-profit company, supported by the Government of India and big banks. The Department for Promotion of Industry and Internal Trade (DPIIT) plays a major role in overseeing ONDC. Leaders like Nandan Nilekani, co-founder of Infosys, are part of its advisory council.

Chapter 3: Key Benefits of ONDC

More Competition: By opening up the market, small businesses can compete with big companies.

Fairness: ONDC reduces the power of large platforms, making the market fairer for everyone.

Better User Experience: Consumers get more choices and possibly lower prices because of increased competition.

Data Privacy: ONDC promises to protect user data and keep it private, though concerns remain.

Chapter 4: Challenges and Concerns

While ONDC has big goals, it faces challenges. One major concern is how it will handle personal data and maintain trust between buyers and sellers. Additionally, without strong rules and regulations, ONDC’s role as a fair marketplace may be tested as big players could still dominate.