Walmart-backed Indian fintech decacorn PhonePe has recently launched Pincode, a new consumer-facing app aimed at strengthening its e-commerce initiatives. The app will be integrated into India’s Open Network for Digital Commerce (ONDC) framework. This move comes three months after Flipkart completed the full ownership separation of PhonePe.
What is ONDC?
- The Open Network for Digital Commerce (ONDC) is a government-backed initiative that seeks to democratize e-commerce by transforming it from a platform-centric model to an open network for buying and selling goods and services.
- With ONDC, a buyer registered on one e-commerce site can purchase goods from a seller on another participating e-commerce site.
- It’s not-for-profit and promotes open networks developed on open-sourced methodology.
- ONDC is neither an aggregator application nor a hosting platform and all existing digital commerce applications and platforms can voluntarily choose to adopt and be a part of the ONDC network.
- The Quality Council of India has been tasked with integrating e-commerce platforms through a network based on open-source technology similar to Unified Payments Interface (UPI).
What is the Significance of ONDC?
- ONDC allows buyers and sellers to transact across different e-commerce platforms, which could benefit smaller retailers and new players.
- However, larger e-commerce companies may face challenges if required to comply with ONDC’s processes and technology.
- ONDC aims to digitize the entire value chain, standardize operations, and promote inclusion of suppliers, resulting in logistics efficiency and enhanced value for consumers.
- The platform’s equal-opportunity participation is expected to make e-commerce more accessible for consumers, who can discover any seller, product, or service using any compatible application or platform.
- ONDC allows transactions of any denomination, making it a truly open network for democratic commerce.
- In the next five years, the network aims to onboard 90 crore users and 12 lakh sellers, leading to 730 crore additional purchases.
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