Indian Government Launches ONDC as Alternative to Flipkart and Amazon; Check Details

| Updated: Monday, October 3, 2022, 12:38 [IST]

In a bid to limit the dominance and monopoly practiced by the e-commerce retailer giants Flipkart and Amazon, the Indian government has launched the Open Network for Digital Commerce (ONDC) in Bengaluru. It is a private non-profit company that is meant to provide a fairground for trade for retailers and small businesses in the country.

The ONDC was established by the Department for Promotion of Industry and Internal Trade of the Government of India to develop open e-commerce. It aims to reduce the dominance of the multinational e-commerce giants mentioned above that are allegedly restricting market access, minimizing supplier margins, and favoring specific vendors.

ONDC's Beta Test in Bengaluru

The interoperable network went live for users at 16 locations in Bengaluru on September 30. Over 200 grocery stores and restaurants in the city have been onboarded for the beta testing program. The beta testing in Bengaluru is a major leap taken by the network, which democratizes the e-retail ecosystem in India.

Customers can place orders in two domains - groceries and restaurants via buyer apps that participate on the ONDC network. In the coming weeks, more apps will join the network, thereby expanding both buyers and sellers who can participate in the transaction, the commerce ministry said. As of now, PayTM, Spicemoney and Mystore are available as buyer apps on ONDC.

Initially, ONDC started its Alpha testing with a closed set of buyers in Bengaluru in April this year. It expanded to over 80 cities, including Delhi NCR, Bhopal, Coimbatore, and Shillong by September. With this testing, the platform has validated the apps and confirmed business and operational flow. In the beta testing phase, the general public can experience shopping via ONDC and provide early feedback before the expansion phase.

ONDC to Empower Buyers and Small Businesses

The Union Minister of Commerce and Industry claims the ONDC to be a democratic and cost-effective tech that will empower both buyers and small businesses. Almost 20 national organizations have confirmed investments in ONDC worth Rs. 255 crores. Some of these lenders include ICICI Bank, State Bank of India, Bank of Baroda, HDFC Bank, and UCO Bank, among others. Late last month, the Bank of India announced that it invested Rs. 10 crores in ONDC on a private placement basis, which makes it own a 5.56% stake in ONDC.