Context
The Department for Promotion of Industry and Internal Trade (DPIIT) issued orders appointing an advisory committee for its Open Network for Digital Commerce (ONDC).
What is ONDC?
- The project is aimed at curbing “digital monopolies”.
- This is a step in the direction of making e-commerce processes open-source, thus creating a platform that can be utilized by all online retailers.
- ONDC aims at promoting open networks developed on open-sourced methodology, using open specifications and open network protocols, independent of any specific platform.
What is open-source?
- Making a software or a process open-source means that the code or the steps of that process is made available freely for others to use, redistribute and modify.
- For example, while the operating system of Apple’s iPhones — iOS — is closed source, meaning it cannot be legally modified or reverse engineered.
- Google’s Android operating system is open-source, and therefore it is possible for smartphone OEMs such as Samsung, Xiaomi, OnePlus, etc to modify it for their hardware.
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What processes can be made open-sourced?
Following operational aspects can be made open source on the lines of Unified Payments Interface (UPI):
- onboarding of sellers
- vendor discovery
- price discovery
- product cataloging
Benefits of ONDC
ONDC is expected to:
- digitize the entire value chain
- standardize operations
- promote inclusion of suppliers
- derive efficiency in logistics
- enhance value for consumers
Impact
- On smaller companies:
- If the ONDC gets implemented and mandated, it would mean that all e-commerce companies will have to operate using the same processes.
- This could give a huge booster shot to smaller online retailers and new entrants.
- On big companies:
- If mandated, this could be problematic for larger e-commerce companies, which have proprietary processes and technology deployed for these segments of operations.
