Open Network for Digital Platform
- To “democratise e-commerce” and “offer alternatives to corporate e-commerce sites,” the Union government is aiming to establish an Open Network for Digital Commerce (ONDC).
- The plan is considered as a step toward reducing the dominance of platforms like Amazon and Flipkart to avoid monopoly power and breaching the law.
- The ONDC (Open Network for Digital Commerce) project is based on the Unified Payments Interface (UPI) project
- The UPI project enables consumers to send and receive money regardless of the payment platforms they are enrolled with.
- E-commerce customers and sellers can transact regardless of the platforms on which they are registered.
- As a result of ONDC, a buyer registered on Amazon, for example, can purchase goods directly from a merchant selling on Flipkart.
- The government intends to shift the e-commerce market’s core structure from a “platform-centric model” to a “open-network model.”
The Need for such a platform
- The government hopes that ONDC would remove the dominance of a few giant platforms in the e-commerce business.
- According to the report, the e-commerce market is currently divided into “silos” that are controlled and dominated by these platforms. For example, Amazon and Flipkart have been accused of discriminating against sellers on their platforms and supporting seller companies in which they have indirect ownership.
- The government intends to level the playing field by establishing an open network like ONDC that connects buyers and sellers across platforms. Buyers would be able to access vendors across platforms without having to transfer between them, according to reports.
The criticism of such move:
- For starters, even under today’s platform-centric e-commerce paradigm, vendors are already free to offer their products across many e-commerce platforms. Buyers frequently shop on many platforms.
- Then there are services like price comparison given by a variety of private websites, which assist shoppers bridge the knowledge gap and make smarter judgments. As a result, Amazon’s and Flipkart’s dominance of the e-commerce business may not be attributable to any captive grip these platforms have over shoppers and sellers. Furthermore, platforms’ alleged “monopoly” may be no different.
- Finding an alternative to an e-commerce platform and making it work efficiently will be a greater task.
- Another major issue that such an initiative may face is listing of all sellers and their authentication.
- The quality and timely delivery will be a bigger challenge such initiatives will face.