👍👍👍👍👍–ONDC–Live and let live | The Financial Express

Clipped from: https://www.financialexpress.com/opinion/live-and-let-live/3064365/

Forcing e-retailers to give up their existing business models would betray a lack of confidence in ONDC

The government would also be erring in setting a deadline for participants to join the ONDC protocol.

The Open Network for Digital Commerce (ONDC) is a protocol that holds promise. The idea of enabling thousands of smaller merchants to access a large consumer catchment, without having to cough up chunky charges to a marketplace, is bound to resonate in a country like India.

On the other side, the idea of giving millions of shoppers access to products from far-flung areas is equally enticing. Indeed, the potential of ONDC is mind-boggling.

Which is why it is quite surprising that the government is coming up with unreasonable terms and conditions for participants. On Tuesday, Piyush Goyal, Union minister for commerce & industry, said the Centre will not allow e-commerce companies to build special platforms for ONDC; they must join the protocol via their main platforms.

It is Goyal’s view that these e-commerce companies would benefit unduly from the ONDC protocol as sellers, without offering their buyers the option of coming on the network.

Also Read: ONDC was born to help small businesses under threat from e-commerce challenges: Piyush Goyal

To begin with, consumers are sharp and have a mind of their own; they will flock to the best product in the market. Consequently, it is hard to see how any e-retailing marketplace, no matter how big, can stop buyers from shopping on ONDC if buyers believe they are getting a good deal.

Given this, it is hard to understand why e-commerce firms should not set up a separate platform for the ONDC while continuing to run their existing marketplaces.

The question is why does the government not want the existing platforms to run two parallel operations? Is it worried that ONDC might not take off unless the existing large players are fully in? If ONDC indeed turns out to be the roaring success that everyone is claiming it will be, Goyal should have no cause for worry because, in that case, every Indian will be shopping on ONDC. Consumers worry about nothing more than good products at the right price, and good service. If ONDC delivers that, it would have sustained successes.

By thrusting terms and conditions on e-retailers and forcing them to give up their existing business models, the government is betraying a lack of confidence; it seems to be unsure that ONDC can compete with the Amazons and JioMarts of the world.

If it was confident that the ONDC model is a top-class one, it would not be imposing such restrictive conditions on prospective participants.

Also Read: Piyush Goyal invites all retailers to join ONDC

The government would also be erring in setting a deadline for participants to join the ONDC protocol.

The government’s assertion that those who want in must decide soon, else they will be left out, sounds almost like a warning. This approach is not in keeping with the spirit of “democratising” e-retailing, which is what ONDC is all about. Companies should be given a free hand to join the ONDC as and when they wish and the doors should be left open.

Big platforms know their onions, they’re here to do business, and should ONDC take off as many predict it will, they won’t need to be told to join the party.

The government should focus on building the protocol rather than worrying about whether e-retailers should participate via their main platforms or one built exclusively for ONDC. How does it matter if an e-retailer participates via its main platform or a specially-designed one? If it realises over time that the app created for ONDC is doing better than the main one, it will automatically junk the latter.

The fact is the country’s top e-retailers have put in place excellent systems and processes and provide Indian consumers a level of service that will be very hard for ONDC to live up to. This is especially true when it comes to exchanging or returning goods.

While it is possible prices on ONDC will be more attractive since the chargers that vendors pay to their seller apps are likely to be way below those that they need to pay to big tech platforms, the level of customer convenience also needs to match up.

Today, customers want not just quick delivery but also the option to get a replacement in double quick time. They will simply not tolerate a glitch in the app. To be sure, there is a world beyond the metros and the Tier I cities, and not all customers may be as fastidious. Nonetheless, the bar for ONDC is high.

There has been much talk about how ONDC will emulate the success of the Unified Payments Interface (UPI) but the comparison may not be an apt one. With UPI we are dealing with one single and standard product, which is money. The main players involved are fintechs like PhonePe or PayTm, an organisation like NPCI (National Payments Corporation of India) and banks.

The UPI fulfills needs of customers, essentially buyers; in contrast, it appears the ONDC is being built primarily for thousands of small vendors.

No doubt, the many buyer apps—banks, fintechs and telcos—will work to give their customers a better deal, but at the end of the day, browsing on a platform, choosing a product, paying for it and having it shipped home, is a far more complicated exercise than transferring money.

It is easy to talk of inter-operability and players plugging in and apps talking to one another, but it must all come together. Given the country’s technological prowess, that should not be difficult. Indeed, no one is doubting ONDC’s ability to make it happen. However, it must pull this off without imposing conditions on the others. ONDC must prove to us it can hold its own, in a world in which the Amazons and Flipkarts are free to operate as they have been doing so far.