An overview of the Open Network for Digital Commerce (ONDC) from a bird's-eye perspective

In this article, we're delving into the government's recent initiative to democratize digital ecommerce – the Open Network for Digital Commerce (ONDC). Traditional ecommerce involves four main entities: Buyers, Sellers/Merchants, E-commerce Platforms (e.g., Bigbasket, Swiggy, Amazon), and Payment Service Providers. The typical flow of an ecommerce transaction follows this structure:

In this setup, buyers are freed from the need to know about sellers' identities or product delivery specifics. This is all managed by the e-commerce platform. However, there's a challenge when it comes to product discovery for smaller merchants. Wealthier merchants can make their products more visible by establishing special agreements with the platform. This results in fewer transactions and revenue for smaller players. Additionally, buyers might have limited options since not all merchants offering a product might be on the platform they're using.

This approach brings three problems:

1. Limited Visibility for Smaller Merchants: Smaller players struggle to get noticed among bigger ones dominating the platform.
2. Fewer Options for Buyers: Buyers have limited product choices as not all merchants are available on their chosen platform.
3. Monopoly of E-commerce Players: A single dominant player can lead to issues like unfair competition and limited consumer choice.

So, how does ONDC address this? ONDC offers solutions like:

1. Enhanced Visibility for Smaller Merchants: ONDC maintains a central repository of merchants and their catalog information, ensuring their discoverability.
2. Expanded Choices for Buyers: ONDC's search API provides access to a global catalog, allowing buyers to find similar items across multiple catalogs.
3. Decentralized Collaboration: ONDC promotes a decentralized ecosystem where various stakeholders collaborate to create an inclusive and competitive marketplace. This prevents excessive power concentration in one player's hands and encourages diversity and innovation.

Key Entities within ONDC:

• Buyer: The individual/entity making purchases through the platform.
• Buyer Applications: Apps enabling buyers to search product catalogs.
• Seller Applications: Apps for sellers to manage orders, logistics, etc.
• Sellers: Merchants using the platform to sell products.
• ONDC Ecosystem: Includes gateway and centralized services. The gateway authenticates participants like Business Process Partners (BPPs) and Buyer Application Partners (BAPs).

ONDC API Architecture:

ONDC's API structure follows an asynchronous model where each action triggers a callback. The requester initiates a request, and the target entity sends back a callback. Some key actions and their corresponding APIs include:

1. Search: Find products in the catalog.
2. Select: Choose products for purchase.
3. Initialize: Start an order.
4. Confirm: Confirm and finalize an order.
5. Status: Check order status.
6. Track: Track order progress.
7. Cancel: Cancel an order.

For more detailed API information, visit the ONDC API Documentation.

Feel free to share your thoughts and questions on this exciting initiative!