ONDC (Open Network for Digital Commerce) is an Indian government-backed initiative that creates an open, interoperable network for e-commerce — allowing buyers on any ONDC-connected app to discover and purchase from sellers on any other ONDC-connected app. Unlike Amazon or Flipkart, ONDC is not a marketplace but a protocol that connects existing buyers and sellers across platforms, reducing dependency on any single e-commerce giant.
How Does ONDC Work?
ONDC operates on a decentralised model with three key participants:
- Buyer apps (demand side): Applications where customers search for and purchase products. Examples include Paytm, Magicpin, and various other apps that have integrated ONDC. Buyers do not need to download a separate ONDC app.
- Seller apps (supply side): Platforms where sellers list their products and manage orders. Examples include Mystore, SellerApp, and other ONDC-compatible seller platforms.
- ONDC network: The open protocol layer that connects buyer and seller apps, enabling cross-platform discovery, ordering, and fulfilment.
When a customer searches for a product on any buyer app connected to ONDC, they can see listings from sellers on any seller app connected to ONDC — breaking the closed marketplace model where sellers must list on Amazon to reach Amazon customers.
Why Does ONDC Matter for Small Businesses in India?
ONDC addresses several pain points that Indian small businesses face with existing marketplaces:
- Lower commission fees: Traditional marketplaces charge 15–40% commission. ONDC’s open network model enables significantly lower transaction costs.
- Customer relationship ownership: On ONDC, sellers have direct access to customer data and can build relationships — unlike closed marketplaces where the platform controls the customer relationship.
- No platform dependency: Sellers are not locked into a single marketplace’s rules, ranking algorithms, or advertising requirements.
- Level playing field: Small sellers can compete with large brands on product quality and price rather than advertising budget and marketplace ranking manipulation.
- Multi-category support: ONDC supports not just retail products but also food delivery, grocery, mobility, and services — opening multiple revenue channels through one integration.
What Categories Does ONDC Currently Support?
ONDC has rolled out support for:
- Retail: Electronics, fashion, home goods, beauty, health supplements.
- Grocery: Daily essentials, fresh produce, packaged food.
- Food and beverage: Restaurant ordering and delivery.
- Mobility: Ride-hailing services.
- Services: Home services, healthcare consultations (expanding).
How Can a Small Business Get Started on ONDC?
- Choose a seller app: Select an ONDC-registered seller-side platform that suits your business category. Compare listing fees, features, and support.
- Register and complete KYC: Provide your business registration, GST number, bank account details, and product catalog.
- List your products: Create detailed product listings with quality images, accurate descriptions, pricing, and inventory levels.
- Set up logistics: Configure your delivery options — self-delivery, third-party logistics integration, or ONDC-compatible logistics providers.
- Go live: Your products become discoverable across all ONDC-connected buyer apps.
What Challenges Should Businesses Be Aware Of?
- Consumer awareness: Many Indian consumers are not yet aware of ONDC or how to access it through their existing apps. Adoption is growing but not yet mainstream.
- Logistics complexity: Managing delivery across orders from multiple buyer apps requires robust logistics coordination.
- Return and refund standardisation: Policies are still being standardised across the network, which can create friction.
- Competition remains intense: Open access means every seller in your category is visible, so product quality, pricing, and service still determine success.
Frequently Asked Questions
Is ONDC free to use for sellers?
ONDC itself does not charge sellers. However, seller apps (the platforms you list on) may charge listing fees, transaction fees, or subscription fees. These are typically much lower than traditional marketplace commissions.
Does ONDC replace Amazon and Flipkart?
ONDC does not aim to replace existing marketplaces but to provide an alternative. Many businesses will continue selling on Amazon and Flipkart while also listing on ONDC to diversify their sales channels.
Can service businesses (not just product sellers) use ONDC?
Yes. ONDC supports services including home services, healthcare consultations, and professional services. The services category is expanding as more service providers join the network.
Is ONDC available in all Indian cities?
ONDC is available across India, but adoption is strongest in major metros and Tier 1 cities. Coverage in Tier 2 and Tier 3 cities is expanding as more buyer and seller apps join the network.
