ONDC: A Tech Solution Against E-Commerce Dominance

ONDC, a state-promoted Open Network for Digital Commerce, aims to democratize market access and prevent market concentration, addressing concerns raised by Union Commerce Minister Piyush Goyal. The platform targets to increase monthly transactions and is working on facilitating various financial services including loans, mutual funds, and insurance purchases.

The state-promoted Open Network for Digital Commerce (ONDC) presented itself as a solution to 'prevent market concentration' just a day after Union Commerce Minister Piyush Goyal voiced concerns over the rising influence of e-commerce giants like Amazon.

According to managing director and chief executive T Koshy, the network democratizes market access for all sellers while allowing buyers to secure the best possible deals. Goyal had highlighted the risks of job displacement among small traders due to the growing e-commerce sector's dominance.

Koshy explained that platforms generally favor a few large suppliers, creating a network effect detrimental to smaller businesses. This issue is global, with many developed countries opting for regulatory solutions. However, India is employing an open architecture approach.

Koshy emphasized that such platforms often stifle diversity and continuous innovation for self-interest, but ONDC offers significant opportunities for small businesses in digital commerce. Speaking at the launch of a financial services play by ONDC, he noted the platform's goal to boost monthly transactions from 12 million to over 36 million.

ONDC currently collaborates with three lenders and nine lending apps, with plans to expand. Hrushikesh Mehta, ONDC's senior vice president for financial services, mentioned that the next targets include enabling mutual fund and insurance purchases. These services are expected to go live in one to two months, alongside ongoing work on crop loans, GST data-based credit, and eventually credit card purchases, with assistance from Mastercard.

(With inputs from agencies.)