India's Digital Infrastructure - Part 2 - ONDC (Open Network for Digital Commerce) - Will it be the end of Amazon, Flipkart Duopoly?
This is Part 2 of the series where we discuss India's Digital Infrastructure.
Here are our Research Notes for the episode.
Open Network for Digital Commerce or ONDC has been in the news lately.
Currently, online marketplaces (Amazon, Flipkart, Snapdeal) follow a platform model. In this model, they have end-to-end control over the entire e-commerce transaction process, right from seller on-boarding, customer acquisition, order fulfilment, complaint redressal, and managing payments. Right now, all these processes are being controlled by a single entity.
ONDC's open network will 'unbundle' or break down this complex system of small activities into separate micro-services that can be addressed separately by any entity. These organisations can chooses to perform one or more of these activities. As a result, the proponents of ONDC say that if it is successful, ONDC will democratize e-commerce, increase competition and accelerate growth.
If it is democratised, one big change through ONDC will be that it caps referral commissions for platforms that send shoppers to a seller at just 3% – much less than the roughly 30% cut charged by Amazon, Flipkart and others.
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Here are some research notes that we compiled or referred to for this episode:
- Jefferies Report about ONDC - tonne of details not available elsewhere.
- Twitter Thread by Aditya Kondawar - helped us structure our thoughts.
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