Govt's ONDC launched in Bengaluru; to challenge dominance of Amazon, Flipkart

To contain the dominance of ecommerce platforms such as Amazon and Flipkart, the government on Friday launched the Open Network For Digital Commerce (ONDC) in Bengaluru. The initiative was launched on December 30 last year, with an aim to curb the presence of digital monopolies in the domestic ecommerce market. ONDC aims to promote open networks for all aspects of the exchange of goods and services over digital or electronic networks, and caters to larger numbers of traders, categories of goods, geographies and companies.

By onboarding small retailers, the government is trying to create an alternative to e-comm giant like Amazon and Flipkart. On Thursday, Piyush Goyal, the minister of commerce and industry said, “Bengaluru consumers to get a whole new shopping experience! Beta testing of the Govt's revolutionary Open Network For Digital Commerce to begin from tomorrow. It is democratic, cost-effective & empowers buyers and small businesses.”

Meanwhile, seven new-age companies including Paytm, Mystore and Spicemoney have already adopted ONDC protocols and built their own ONDC-compatible apps, according to an earlier statement by the ministry of commerce and industry. Moreover, these companies have been able to successfully complete cascaded transactions across the ONDC network during the pilot phase in five designated cities - Bengaluru, New Delhi, Bhopal, Shillong and Coimbatore - in grocery and food and beverages segments, the ministry said.

ONDC was launched in line with the government’s Start-Up India initiative. “As the ONDC architecture removes many entry barriers to e-commerce, it is much more feasible for entrepreneurs to create sustainable businesses on ONDC architecture. The network of Startup India Seed Funded incubators may be leveraged for this purpose. Creation of apps in regional languages should be promoted for catering to the diverse needs of citizens living in various towns and villages across the country,” Goyal said in July. 

Apart from empowering start-ups, the ONDC also aims to protect users’ data. “It shall not mandate sharing of any transaction-level data by participants with ONDC and work with them to publish anonymised aggregate metrics on network performance without compromising on confidentiality and privacy, ONDC will be compliant with the Information Technology Act, 2000 and designed for compliance with the emerging personal data protection bill," the government said.

State-run public sector lenders Punjab National Bank and State Bank of India own 9.5% and 7.84% stake in ONDC, respectively. The government of Uttar Pradesh has actively started working with ONDC to get all the ODOP (One District One Product) products available on the ONDC network.