Microsoft joins India’s Open Network for Digital Commerce (ONDC)

Context

US firm Microsoft has become the first big tech company to join the Open Network for Digital Commerce (ONDC).

Key-points

• Microsoft getting on board the ONDC wagon means the project gets its first international marquee name ahead of its Bengaluru launch.
• A number of participants currently live on the ONDC network, offering a number of services in the e-commerce supply chain such as buying, selling and offering logistics services.

What is Open Network for Digital Commerce (ONDC)?

• It is an initiative aimed 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. 
• It is being developed as a counter to the current duopoly in the Indian e-commerce market which is largely dictated by Amazon and Walmart-owned Flipkart.
• It aims in “democratising” digital commerce, taking it away from the clutches of a handful of deep-pocketed companies.

How does ONDC work?

• The ONDC platform lies in the middle of the interfaces hosting the buyers and the sellers.
• So far, the buyer side interface is being hosted by Paytm, whereas the seller side interface is being hosted by other players like GoFrugal, etc
• When a buyer searches for an item on the Paytm app, from where ONDC has gone live, the app will connect to the ONDC platform, which will connect it to seller side interfaces.
• On ONDC, there will be several other backend partners such as logistics service providers, enterprise resource planners, e-commerce store hosting service providers, etc.