The Open Network for Digital Commerce (ONDC) was established to break the long-running monopoly of the established e-commerce companies and democratize the e-commerce sage. ONDC is a market & community-led network which is an open, inclusive, and competitive marketplace where the involved parties i.e. buyers and sellers aren’t required to be present on the same platform. The buyers and sellers have the flexibility to do business from anywhere provided they must be registered on ONDC. Digital users can enjoy their freedom and digital visibility with this open-source network. These users can make transactions regardless of what they have registered, an app or a platform.
If you are beginning your e-commerce journey, then it is quite likely to have confusion between these two terminologies and that’s the query we are going to resolve in this article. In this article, we will cover all the queries that may align with the ONDC and E-commerce platforms. Thus, continue reading this article till the end and get clarity on both these technologies and leverage the best out of this newly emerged landscape of digital commerce.
Before we begin with the comparison, let’s understand both ONDC and E-commerce Platforms more deeply.
Open Network Digital Commerce aka ONDC:
In today’s time, when most e-commerce businesses have a core focus on a platform-centric business model, they want end-to-end control over the whole cycle of e-commerce transactions. It includes onboarding sellers, acquiring customers, order fulfilment, apt complaint redressal, payment management, etc. By dissecting this intricate online purchasing process into discrete microservices, ONDC enables any participant who desires to carry out such operations to do so independently.
The ONDC acts as a player of middleware and hosts both the parties i.e. buyers and sellers to communicate and make transactions. There will be a buyer app on which the buyer can search for a product, this app will be linked to the ONDC platform and a seller app will also be connected with the same platform. The seller app can take orders, and list all the items on the seller app.
There are 3 major categories having sales on the ONDC platform: Food & Beverages, Grocery, and Home & Décor.
We can also categorize in the form of a model and we get the Buyer side, Seller Side, and Logistic Service Providers.
How ONDC and E-commerce Platforms differ from each other?
There are multiple parameters on which ONDC and traditional e-commerce platforms have differences. Let’s go through each one of them:
1. Initial Download Mechanism:
If there are mobile users, the buyers must download an app for e-commerce platforms to make purchases. However, with ONDC, buyers can buy things online without downloading any app.
2. Platform-centric model:
The traditional e-commerce platforms run on the platform-centric model in which all the involved parties like buyers, sellers, logistics providers, etc. have to use the same platform for their respective activities. All these parties connect and conduct business on the e-commerce platform. On the other side, ONDC is a complete open-source model in which merchants and customers can make transactions regardless of the choice of their platforms.
3. Hyper Local Network:
There is no such trading system in traditional e-commerce platforms. While in ONDC, users can leverage the benefits of the hyper-local choice by which the local sellers of a geographical region can connect and provide a better buying experience to their customers. It includes a financial services stack and embedded payment.
4. Product Categories:
You can find a plethora of product categories on the e-commerce platforms to sell such as fashion, groceries, shoes, apparel, books, electronics, etc. ONDC is on the back foot in this regard. There are just three categories currently running in ONDC. These are F&B, groceries, and home décor.
5. Ownership:
Generally, the e-commerce stores are owned by a particular company that decides the terms and conditions and other legal policies for the sellers to boost the company’s revenue. On the other hand, the ONDC platform is open-source and is not owned by any company, entity, or agency as it is not an app or service. It is a backend e-commerce network which utilizes open-source protocols to connect suppliers, buyers, logistics, and payment portals.
6. Options for Buyers & Sellers:
In today’s time, thousands of logistics brands, and lakhs of businesses offer services on e-commerce platforms. Unfortunately, only a handful of sellers get maximum attention on search results, which limits the options for buyers. On the counterpart, the buyers can filter the sellers on the ONDC platform and get the relevant results from them. It opens many options for buyers and sellers that improve their experiences.
7. Transferable Seller Reviews:
Merchants would have to start over from scratch if they were operating their store on one platform and wanted to start selling on another. The ratings and reviews they accumulated over years of dependable performance will remain in their former store. But in this instance, ONDC seems to be a blessing. You can smoothly move your store to this open-source network by taking advantage of the benefits of transferable ratings and reviews. Buyers will be able to see these and use them to inform their decisions.
What Challenges ONDC is currently witnessing?
1. Buyers Considerations:
- Customer Experience: The user experience and user interface of the buyers’ app of the ONDC platform is not that captivating and has a lot of room for improvement. It should provide UI & UX of the level that current e-commerce platform like Magento offer.
- Certain Trivial Issues: Longer delivery times, poor grievance redressal, and partial returns continue to be issues for ONDC users.
- Neighborhood Enrolling Problems: Local merchants can register and start selling online thanks to ONDC. As a result, a variety of problems about quality, digital adoption, and inventory updates are emerging. And who will lose out as a result? Everyone must continue to be prepared for that.
- Poor Inventory Management: There have been instances when the SMEs haven’t maintained proper inventory levels due to which a lot of orders by buyers weren’t fulfilled.
2. Sellers’ Considerations:
- No discounts or offers: E-commerce giants have always gained a competitive advantage as they have deep pockets and can offer highly lucrative discounts to buyers and get higher sales. With ONDC, the local retailers find it quite challenging as they have lower margins and can’t provide such attractive offers.
How We Can Help You?
It will be challenging for online businesses who are already running their business on the e-commerce platforms to shift to the ONDC network. Also, it would be really difficult for them to migrate their product catalogue to this entire new network. That’s why, hiring an e-commerce development company like us would make it easy for the merchants to conduct migration and even ONDC implementation seamlessly with no data loss.
Here you can blindly trust Ceymox Technologies. At Ceymox Technologies, we have a huge team of experienced developers and designers with a proven record of migrating and integrating clients’ online stores to the ONDC network into their businesses.
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