SUMMARY
ONDC said that the primary objective of introducing the consultation paper is to understand if its approach to building trust is adequate and likely to have the intended outcome
The paper said that ONDC has adopted three levers to build trust in the network – ONDC network policy, ONDC protocol specification and transaction-level contract
ONDC went live last week with its beta launch across 16 pin codes of Bengaluru
The Open Network For Digital Commerce (ONDC) has floated a consultation paper seeking comments from the general public to build the trust of all stakeholders in the network.
The last date to submit responses is October 31.
ONDC is the government’s ambitious digital commerce project which aims to democratise the ecommerce industry in the country, currently dominated by Flipkart and Amazon, by providing a level-playing field to small sellers and eliminating dependency on any single platform.
ONDC said that the primary objective of introducing the public consultation paper is to understand if its approach to building trust is adequate and likely to have the intended outcome.
“ONDC aims to build an open, interoperable network on which buyers and sellers can transact without needing to be present on the same platform. Its network architecture does not depend on a centralised controller for operations and information flow,” the paper said.
ONDC has sought responses from the general public on the following questions:
– Are the measures ONDC is taking sufficient to address the building trust among market participants?
– If not, what actions can ONDC take to bridge the gap?
– Which (if any) of the measures are likely to be counterproductive, and should be avoided?
– And taken together, do these measures offer a level of trust amongst participants that is comparable to or greater than what the platforms are currently able to elicit?
Measures Taken To Build Trust
Explaining the ONDC network, the paper said that it allows different entities to come together on one platform to provide products and services to consumers (buyers) and simultaneously, manages sellers on the other end.
“The ONDC network follows a decentralised system thus, using interoperability, common rules of engagement at the network-level and dynamic, digital contracts to allow network participants to coordinate their actions to successfully complete orders on the network and fulfil them,” it said.
The ONDC network has three types of network participants (NPs) – buyers apps, sellers apps that are further classified into Marketplace Seller Nodes (MSNs) and Inventory Seller Nodes (ISNs), and gateways.
The paper said that ONDC has adopted three levers to build trust in the network – ONDC network policy, ONDC protocol specification and transaction-level contract.
The ONDC network policy essentially governs rules of engagement and sets down some distinct responsibilities for the different NPs on the basis of the functions they perform. Meanwhile, ONDC protocol specification is actually an interoperability standard that all NPs have to comply with while interacting with each other on the network.
On the other hand, transaction-level contract (TLC) is a digital agreement that takes place between a buyer-side app and a seller-side app to facilitate the buying and selling of goods and services on the ONDC network.
A scoring and badging system is another feature that has been added to the ONDC network in order to develop the trust of stakeholders.
“The scoring and badging system is a user-driven system to rate the quality of the product, and the performance of sellers and logistics service providers,” the paper added.
To address consumer and buyers’ grievances, ONDC has also created an issue and grievance management (IGM) system that will permit NPs and end-users to resolve grievances in a timely manner.
“Instead of assuming the role of a controller, ONDC is putting in place processes to encourage (and in some cases compel) network participants and sellers to own their piece in consumer service, and consequently fulfill their responsibility in redressing the grievance,” it said.
State Of Indian Ecommerce Market
The Indian ecommerce market is currently dominated by Flipkart and Amazon who have often been accused of violating the country’s competition laws and favouring their own sellers on the platforms. Both the companies are being probed by agencies for various violations of laws.
However, the competition in the ecommerce space has heated up with the entry of conglomerates like Reliance and Tata, while Meesho is also giving a tough fight. In a recent report, brokerage Bernstein said that Amazon is lagging behind Meesho in some of the aspects in India.
Amidst this, ONDC’s beta launch took place in Bengaluru across 16 pin codes last week. On the first of its beta launch, ONDC received 161 orders across grocery and F&B categories. Of this, 55% were grocery orders, while the remaining were F&B orders, as per the Department for Promotion of Industry and Internal Trade (DPIIT).
According to an Inc42 report, ecommerce startups in India raised over $27 Bn between 2014 and 2021. The country’s ecommerce market is projected to have a size of $400 Bn by 2030.
