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ONDC Explained: Open Network for Digital Commerce

ONDC Explained: Open Network for Digital Commerce

Open Network for Digital Commerce (ONDC), is a private non-profit Section 8 company established by the Department for Promotion of Industry and Internal Trade (DPIIT) of Government of India to develop open e-commerce. It was incorporated on 31 December 2022 with initial investment from Quality Council of India and Protean eGov Technologies Limited (formerly NSDL e-Governance Infrastructure Limited).

Open Network for Digital Commerce

ONDC, which stands for Open Network for Digital Commerce, is not just another application, intermediary, or software. It is a comprehensive set of specifications meticulously crafted to facilitate seamless connections and open interchange among shoppers, technology platforms, and retailers. With a clear mission and vision, ONDC aims to establish an inclusive ecosystem for e-commerce, acknowledging the vast potential it holds.

In India, a staggering number of over 12 million sellers depend on selling or reselling products and services to make their living. Surprisingly, only a mere 15,000 of these sellers, constituting a mere 0.125% of the total, have managed to embrace e-commerce as a means of conducting business. The realm of e-retail has largely remained elusive for the majority of sellers, particularly those hailing from small towns and rural areas. Recognizing this glaring disparity, ONDC seized upon a unique opportunity to bridge the gap and unlock the full potential of e-commerce in India.

The primary objective of ONDC is to revolutionize e-commerce in India by dramatically enhancing its penetration across the country. It envisions the population-scale inclusion of all types and sizes of sellers, thus empowering them to participate in the digital economy. By embracing the ONDC framework, sellers from diverse backgrounds and locations will have the means to thrive in the digital realm, thereby increasing their visibility, reach, and overall business prospects.

The significance of this endeavor cannot be overstated. ONDC aspires to elevate the e-commerce penetration rate in India from its current level of 4.3% to unprecedented heights, capturing the immense potential that lies within the nation. By doing so, it seeks to create a level playing field for sellers of all sizes, ensuring that opportunities are not restricted to a privileged few.

Small towns and rural areas, which have often been marginalized in the e-commerce landscape, will now have the chance to actively participate and reap the benefits of the digital commerce revolution.

Through its comprehensive set of specifications, ONDC aims to dismantle the barriers that have hindered widespread e-commerce adoption. By promoting open interchange and connections, it fosters an environment where shoppers, technology platforms, and retailers can seamlessly collaborate and interact. By enabling the inclusion of millions of sellers who were previously left behind, ONDC paves the way for a vibrant, diverse, and thriving e-commerce ecosystem in India.

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Open Network for Digital Commerce(ONDC) Structure

The ONDC operates on the principles of “free software methodology, open specifications, and open network protocol“. This approach ensures that consumers and merchants can engage in transactions for goods and services without being tied to any specific platform or application.

To facilitate this, the ONDC leverages the technological and specification layer provided by Beckn. Beckn serves as the foundation for ONDC’s network policies, network trust, network grievance handling, and network reputation system.

TypePrivate non-profit Section 8 company[1]
FoundedDecember 31, 2022; 4 months ago
Area served
Key people
ProductsOpen network for e-commerce
OwnerDepartment for Promotion of Industry and Internal Trade

One of the key objectives of ONDC is to implement a dynamic pricing model, digitized inventory management, and optimized delivery cost.

These measures aim to reduce the overall cost of doing business for all participants on the platform. By leveraging these strategies, ONDC strives to enhance efficiency and profitability for sellers while providing competitive pricing for buyers.

Additionally, ONDC employs a hyper-local search engine model that utilizes GPS proximity data as the default setting. This empowers buyers to independently select their preferred seller and logistics partner to fulfill their orders. By providing this flexibility, ONDC ensures that buyers have control over their purchasing decisions while fostering a more personalized and localized shopping experience.

Types of Roles in ONDC

  1. Sell on ONDC / Create a Seller Experience
  2. Create a Buyer Experience
  3. Provide Software as a Service
  4. Provide Other Services
  5. Buy on ONDC

How to Join ONDC?

Be a part of the
biggest network!

Take your digital commerce to the next level. Become ONDC-enabled and boost your visibility and discoverability.

ONDC empowers all businesses in India to benefit from e-commerce. On ONDC’s open network, the only thing that counts is the quality of service provided. Whether you are a big or small business, as long as you can deliver high-quality service that aligns with your chosen role on ONDC, you can succeed. Are you ready to make an impact?

Steps to Join

1. Introduction to ONDC

Get familiar with the functioning of ONDC and how you can leverage the capability to accelerate your business growth.

How to join ONDC Step 1

2. Role Selection

To connect with the right consumer or B2B channel, it is critical for you to identify your role in the network.

How to join ONDC Step 2

3. Participant Profile Form

Submit the participant form with necessary details

How to join ONDC Step 3 NP profile Form

4. Implementation Planning

Once your organization has completed the NP Profile form, you can initiate implementation.

How to join ONDC Step 4 Implementation Planning
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5. Implementation

Once your team has completed the onboarding steps, including introductory calls and Implementation briefing, they can initiate implementation.

6. Testing on Staging

Now that you have the resources for implementation, your team is ready to start building and testing.

7. Verification and Certification

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8. Testing on Pre-Production

After completion of technological development and tech compliance, you can move to pre-production environment.

9. Final Checklist Verification

Provides the steps under technical, operational, and regulatory compliance that must be completed to qualify to move into the production environment.

10. Go Live on Production

Successfully Surpassing the threshold for functional testing and complying with the final checklist on pre-production will enable NP to move to the production environment.

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Sunil Kumar Sah @DigitalSunilSah 

Sunil is an E-commerce Seller, Blogger, YouTuber and Digital Marketer. He is a digital enthusiast and passionate about Online Selling. He loves sharing his knowledge and experiences on eCommerce in this blog and on his Hindi YouTube Channel “Ecommerce with Sunil” and the English Channel “Ecomsprint


Blogger | Digital Marketer | Ecommerce Seller

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