Open Network for Digital Commerce
Open Network for Digital Commerce is a state-owned technology, initiative launched by the Department for Promotion of Industry and Internal Trade, Government of India to foster decentralized open e-commerce model and is led by a private non-profit Section 8 company. It was incorporated on 31 December 2021 with initial investment from Quality Council of India and Protean eGov Technologies Limited.
History
ONDC is not an application, an intermediary, or software, but a set of specifications designed to foster open interchange and connections between shoppers, technology platforms, and retailers. ONDC was incorporated with the mission and vision of creating an inclusive ecosystem of e-commerce.On 5 July 2021, a nine-member Advisory Council was constituted by Department for Promotion of Industry and Internal Trade. The Quality Council of India was tasked with incubating ONDC using open source methodologies, open specifications, and network protocols. It incorporates inventory, logistics, and dispute resolution and plans to cover 25% of domestic digital commerce within two years of launch. ONDC will unbundle delivery services so that customers can choose their own logistics provider. Till 26 October 2021, QCI established a team of experts and on-boarded some small and medium size industries as volunteers for project execution while DPIIT approved ₹10 crore as initial investment.
From November 2021 to March 2022, various public and private sector entities invested seed money to become early promoters in ONDC. This includes Punjab National Bank. State Bank of India. Axis Bank. Kotak Mahindra Bank. BSE Investments. Central Depository Services. ICICI Bank. Small Industries Development Bank of India. On 23 March 2022, Common Service Centres under Ministry of Electronics and Information Technology announced that it will promote ONDC for ecommerce and logictics in rural areas through 3 Lakh Grameen e-Stores. National Payment Corporation of India and National Stock Exchange of India committed funding for ONDC as promoters. On 31 August 2022, Ministry of Finance and Reserve Bank of India cleared NPCI to acquire 10% stake at ONDC by investing ₹10 crore. Bank of India acquired 5.56% stake by investing ₹10 crore.
As of July 2022, more than 20 organisations have committed in investment to the project, including UCO Bank and HDFC Bank. Bank of Baroda etc. HDFC Bank acquired 7.84% stake of ONDC. In April, ONDC had received ₹157.5 crore for the first stage of the project from 17 banks and financial institutions. For the pilot project, eSamudaay will help in dealing with consumer facing interface, Gofrugal Technologies supplied enterprise resource planning software, GrowthFalcons for digital marketing and SellerApp will help sellers with automation and provide digital insight on sales. On 9 August 2022, SIDBI signed memorandum of understanding with ONDC to bring small industries on the network. To make the transition to ONDC easier, Yes Bank is working with SellerApp for business enterprise customers.
As per Nandan Nilekani, the Account Aggregator Network will work alongside ONDC which will allow everyone in the supply chain to access formal credit in an efficient manner. ONDC signed MoU with Jammu and Kashmir Trade Promotion Organization on 25 August 2022 to increase eCommerce adaptation in Jammu and Kashmir. Union government is planning to integrate One District One Product scheme with ONDC. IDFC First Bank joined ONDC on 8 September 2022 and will push its current account holders to use the network for business transaction. During talks at Stanford University, Piyush Goyal clarified that through ONDC India is interested in creating multiple unicorns instead of few trillion dollar eCommerce companies. ONDC signed MoU with Government of Madhya Pradesh on 22 November 2022 to increase local adoption, sprint programming and software development. ONDC will incorporate mobility, hospitality and travel sectors.
As per McKinsey & Company, by 2030, ONDC has the potential to increase digital consumption in India by $340 billion. On 6 August 2024, Government of Nagaland and ONDC signed MoU for supporting digital sales of small companies, farmers, craftsmen, and entrepreneurs. Ilandlo Services has been appointed as the nodal agency.
DigiReady Certification
The DigiReady Certification portal was launched on 8 February 2024, as announced by ONDC and the Quality Council of India. Through the use of this online self-assessment tool, small and medium-sized enterprises can determine how well-equipped they are to join the ONDC platform as vendors. The certification procedure assesses a number of digital readiness factors, such as the availability of the paperwork required for online operations, the user's familiarity with software and technology, the ability to integrate with current digital processes, and the effectiveness of order and catalog management. Participants will receive an e-certificate designating their company as DigiReady to onboard one of the network seller partners upon satisfactorily answering all critical questions. Anyone who answers a question wrong will be sent to a hand-holding tool to help them become more proficient in the appropriate module so they can answer questions correctly. Seller Applications will contact entities to make the on-boarding process easier for them when they are DigiReady and give their permission.Build for Bharat hackathon
The ONDC distributed equity capital of up to $250,000 for Antler as part of the initiative. Additionally, teams that can devise original solutions to challenging business issues in the nation's e-commerce environment will receive $100,000 in Google Cloud credits. There were 27,000 participants in all, including businesses, startups, and academic institutions from all around India.In cooperation with the Startup India platform, Google Cloud, Antler, Protean, and Paytm, the program was launched in December 2023. With experts, leaders, venture capitalists, and incubators present, it was held in over 50 cities. On 28 June 2024, the hackathon's second edition was introduced in three categories: foundation solutions, scalable solutions, and next-generation initiatives.
Pilot phases
The pilot phase was launched on 29 April 2022 in five cities; New Delhi, Bangalore, Bhopal, Shillong and Coimbatore. In April, Bengaluru based Woolly Farms received an order from buyer application Paytm. This was the first transaction on ONDC.Restaurant management platform Petpooja partnered with marketing agency GrowthFalcons to onboard food and beverage brands on ONDC network. They help restaurants with discovery and demand analytics. On 5 May 2022, GrowthFalcons, Paytm and logistics company LoadShare successfully completed the first live cascaded transaction on ONDC. The delivery happened on Petpooja point of sale terminal.
By August 2022 all systems will become operational. ONDC will start servicing 100 cities and will also open for wider public use in Bengaluru, New Delhi, Coimbatore, Bhopal and Shillong where pilot projects are ongoing. By the end of 2022, ONDC will go live at national level covering the entire country. ONDC expanded to Noida, Faridabad, Lucknow, Bijnor, Bhopal, Chhindwara, Kolkata, Pune, Chennai, Kannur, Thrissur, Udupi, Kanchipura, Pollachi, Mannar and Ramnathpuram on 18 July 2022.
ONDC activated ecommerce in agriculture domain on 20 June 2022 with National Bank for Agriculture and Rural Development. ONDC is attempting to integrate all Agri-tech and Non Agri-tech ecommerce platforms into common network while these companies build solutions that can further accelerate the adoption and establish market linkage for Farmer Producer Organizations.
Government of Uttar Pradesh started actively promoting One District One Product scheme on ONDC. DPIIT will initiate integration of Union Government Ministries and various departments under State Governments with ONDC. The platform will try to rectify issues registered with National Consumer Helpline like delivery of wrong, defective, damaged goods, non-delivery or delayed delivery, failed refunds or violation of service agreements. Government is planning to leverage the incubators under Startup India Seed Fund Scheme to build applications for ONDC with vernacular language support for greater accessibility. ONDC restricted referral commission of sending a buyer to a shopper at 3% compare to 30% in major eCommerce platforms.
From 21 cities, the pilot phase moved to 51 cities by third week of August. The Economic Times reported that ONDC is facing teething troubles with respect to address and geolocation APIs. From September, Bengaluru will become the first city to get all user access. By 2024, ONDC is planning to bring 3 crore sellers and 30 crore shoppers on the network. On 31 August 2022, government announced that ONDC will move to beta-testing phase for general public. ONDC will charge fee from sellers for maintenance and development of the network.
By allowing the integration of CSC's e-Grameen app on the ONDC network as a buyer application, Common Services Centers, under the Ministry of Electronics and Information Technology, have teamed with the ONDC to make e-commerce accessible to rural communities. During the initial stage, CSC will function as a buyer-side platform, enabling citizens who visit the center to place orders using the e-Grameen app. The sellers who have registered on the CSC platform will be able to accept orders over the ONDC network during the second phase.