How is ONDC Network Going to Kill the Monopoly of Amazon and Flipkart?

There’s been quite a buzz around ONDC  network and what it means for established eCommerce giants like Amazon and Walmart-owned Flipkart. While ONDC network is undoubtedly an ambitious initiative (on par with the UPI project), it holds the power to democratise India’s entire eCommerce market space completely.

This article unravels the truth behind India’s monopolised e-retail sector and what changes ONDC network will bring to the table to help pan-India sellers.

The truth about selling on Amazon and Flipkart

Currently, the two dominant players are - Amazon and Flipkart. When these marketplaces first arrived, many feared they would spell the end of small brick-and-mortar businesses. Contrarily, some experts argued that the advent of eCommerce would ultimately benefit the millions of Kirana shops that previously were restricted to serving a small, local customer base.

The truth, however, lies somewhere in the middle. Thousands of D2C brands and startups (Mamaearth, BoAt, etc.) have used Amazon as a launching pad, attracting millions of eyes overnight for incredible growth. However, for every success story, hundreds of obscure sellers populate the market, trying to make a name.

Amazon, in particular, is accused of providing preferential treatment to its own suppliers, acting in its own self-interest while ignoring Indian sellers. Today, Amazon and Flipkart have become such behemoths that they control over 60% of India’s entire e-retail market. There is virtually nowhere left for small sellers to go.

Hence, the GoI hopes to put an end to this hegemony by encouraging Indian SMBs and MSMEs to register on the ONDC network.

ONDC Network in a Nutshell

The government issued a statement outlining the foundations of this novel initiative stating, “ONDC Network is a globally first-of-its-kind initiative that aims to democratise digital commerce, moving it from a platform-centric model to an open network. The revolutionary concept will enable buyers and sellers to be digitally visible and transact through an open network, no matter what platform or application they use.”

Touted as the “UPI” for India’s eCommerce space, the plan is to encourage all scales of businesses to become digitally active. Merchants looking to sell on ONDC Network will only have access to the systems and technology currently deployed by big players. With the ONDC  network, the central government plans to increase the eCommerce coverage in the retail market from roughly 15,000 to 2 Mn eCommerce storefronts by 2027.

The not-for-profit platform is expected to promote a level playing field where all network participants (sellers, buyers, service providers, payment apps, etc.) can interact independently. Once you register on ONDC network via a compatible solution, i.e., the Mystore seller app, your products are instantly visible to millions of pan-India buyers. Here’s how you can register as a seller on the democratic network:

• Visit the Mystore seller app registration page.
• In the registration form, enter your GSTIN.
• Enter your bank information.

And that’s it! Once activated, you'll be able to add your catalogue and sell on ONDC network to pan-India audience.

How will ONDC Network Disrupt The eCommerce Monopoly

There are barriers to growth if you continue to do commerce the traditional way. Flipkart and Amazon have strategically harboured a model that benefits a few at the expense of most sellers.

Thankfully, the ONDC Network has already made significant progress in smashing these barriers and looks set to do so. Here are the most important changes that the open network will instil to curb the monopoly of these giant corporations:

1. Discarding the platform-centric model

Likes of Flipkart, eBay, Amazon, etc., currently use a platform-centric model, meaning that sellers and buyers can only conduct transactions using the same platforms/applications. Hence, a product listed on Amazon isn’t visible to a buyer shopping on Flipkart and vice versa.

However, with the ONDC network protocol, buyers, sellers, and logistics providers can seamlessly interact regardless of what platforms they use. As you sell on the ONDC network, your can choose your preferred logistics solutions to scale your business. You can also enable interstate shipping for better customer service.

2. Minimizing commission fees and acquisition costs

For small-scale vendors, selling on Amazon is a financial gamble. Sellers have minimal pricing control and are often forced into selling a product for dirt-cheap prices. Also, Amazon charges a lofty commission fee (15-35%) per order, which may eat into your profit margins when added to the subscription costs and other damages.

Meanwhile, you don’t need a huge capital to sell on ONDC network; there are no upfront costs and only a minimal transaction fee that you only pay once you start trading. Any self-owned business can scale its selling capacity with Mystore seller app without spending any subscription or upfront costs. Sellers only pay a nominal transaction fee which is several times less than the standard commission rate of Amazon and Flipkart.

3. Providing wider visibility and transparency

Even the most avid Amazon/Flipkart supporters will confess to the platforms’ non-transparent policies and shady algorithms (to rank products/sellers). Imagine spending a fortune building a digital presence and still getting zero traffic/visibility on your product listings. Also, Amazon reviews are non-transferable, thus tying sellers to the same platform for years. All these weak points keep Indian sellers from truly accepting eCommerce.

ONDC network isn’t a privately-owned entity. It operates in the best interest of small businesses, not to make profits. It intends to facilitate a seamless selling/buying experience without shady policies or barriers. All merchants can sell on ONDC network, provided they have a feature-rich, advanced solution like the Mystore seller app.

4. Offering on-demand logistics solutions

Yes, most monopolistic marketplaces don’t offer satisfactory logistics services. Logistics is complex, and every business has its unique supply chain to deliver products on time. Amazon and Flipkart may provide a platform to connect with potential buyers thousands of miles away, but getting your product to them is your headache.

ONDC network has a vast network of logistics partners that can help you deliver orders to hyperlocal, local, and nationwide customers. The most effective way to set your enterprise apart is by offering your buyers convenient logistics, and that's what Mystore helps SMEs achieve. The Mystore seller app lets you connect with ONDC network-approved logistics providers and securely ship orders.

Final thoughts

To summarise, safe to say that the advent of theONDC network will not put big players like Amazon out of business, nor should it. Instead, the key is incorporating all the prominent platforms with the open network to carve new business opportunities for hyperlocal, marginalised sellers.

Being able to sell on ONDC network will improve visibility and diversity, thus helping the customers with more options as well. Naturally, better inclusivity leads to better customer experience and ultimately, the whole market prospers. With the Mystore seller app, sellers can implement ready-to-use technology to build a fully-functioning eCommerce platform. Start your journey on the ONDC network with Mystore and set your business up for growth like never before.