ONDC, short for Open Network for Digital Commerce, aims to revolutionize digital commerce by democratizing access. Unlike traditional e-commerce platforms like Amazon or Flipkart, ONDC operates as an open network, allowing both buyers and sellers to interact regardless of the platform they use. This inclusivity is expected to benefit various industries such as retail, food, and mobility.
By standardizing operations, providing logistics support, and digitizing the entire supply chain, ONDC represents a significant shift away from the platform-centric model. Instead, it fosters a facilitator-driven, interoperable, and decentralized network. This move challenges the dominance of major platform players like Flipkart and Amazon, promising to level the playing field for all participants in the digital commerce landscape.
On
the ONDC Network, there are three types of Network Participants:
1.Buyer Apps (Buyer Nodes):
·
Responsible for buyer-side operations such as
acquiring buyers, facilitating search and discovery, and enabling buyers to
place orders on the Network.
2.Seller Apps:
Manage
seller-side operations and come in two varieties:
a. Marketplace
Seller Nodes (MSNs):
·
Function as aggregators, allowing sellers who
are not direct network participants to conduct transactions on the Network.
·
MSNs do not maintain inventory but serve as
marketplaces for sellers.
b. Inventory
Seller Nodes (ISNs):
·
Are sellers themselves who actively
participate in the network.
·
These sellers maintain their inventory and
transact directly on the Network.
3.Gateways:
· Serve as nodes for broadcasting search queries and collecting results.
· Play a vital role in search and discovery processes, facilitating efficient interaction between buyers and sellers.
ONDC’s Architecture:
In any
individual sale facilitated through ONDC, the Buyer and Seller are bound by the
terms outlined in the transaction. The transfer of goods' title occurs from the
Seller to the Buyer via the invoice.
Both the Buyer and Seller have pre-existing legal relationships with their respective apps, governed by the terms and conditions set by those apps. However, there's no direct legal relationship between the Buyer and Seller apps.
Instead, the Buyer App and Seller App each have a legal relationship solely with ONDC, established through the Network Participant Agreement (NP Agreement). While this agreement establishes the legal framework, the operational aspects of transacting on the ONDC Network are detailed in the ONDC Network Policy.
Before a transaction, the Buyer App and Seller App don't have a pre-existing legal relationship. A legal relationship is dynamically formed between them through the Transaction-level Contract, facilitated by the ONDC Protocol. This contract is executed digitally between the Buyer App and Seller App, with ONDC not being a party to the transaction itself.
a. Pre-order APIs
· /search - buyer app specifies the search intent;
· /on_search - seller app responds with the catalog based on the search intent;
· /select - buyer app specifies the items & quantity selected by a buyer;
· /on_select - seller app responds with the serviceability info, quote & O2D TAT for selected items;
· /init & /on_init - buyer & seller app specify & agree to the terms & conditions prior to placing the order;
· /confirm - buyer app places the order on behalf of the buyer;
· /on_confirm - seller app responds to the order placed either through auto-acceptance or deferred acceptance or rejection of the order;
b. Post-order APIs
· /status - buyer app requests for the current status of the order;
· /on_status - seller app provides the current status of the order;
· /cancel - buyer app places cancellation request for the order;
· /on_cancel - seller app responds to the buyer app cancellation request or cancels the order directly;
· /update - buyer app initiates a part return or cancel request (for specific items) on behalf of the buyer;
· /on_update - seller app responds to the buyer app part return / cancel request or initiates a part cancel request (for specific items) directly;
· /support - buyer app requests seller contact details;
· /on_support - seller app responds with seller contact details;
· /track - buyer app requests for live tracking of order;
· /on_track - seller app responds with URL for live tracking of order;
· /rating - buyer app provides rating on behalf of buyer;
- /on_rating - seller app responds to rating request from buyer app and provides additional info, such as feedback form, as required;
Stages in the
life-cycle of ONDC transaction:
The
following breakdown outlines the various stages involved in a transaction
within the ONDC Network, including both standard processes and exception
handling.
1. Search and Discovery: The
buyer searches for a product and receives a list of sellers offering that
product.
2. Placing an Order: The
buyer selects a product, adds it to their cart, and confirms the order.
- Buyer initiates a search (product, service, or store) on buyer application interface.
- Buyer selects product and confirms delivery terms on product page.
- Buyer app/seller app with a pre-existing
agreement with a logistics buyer relays the above information.
- Logistics buyer searches for logistics
service providers (registered on seller app, or MSNs delivery agent, or
logistics sellers on network).
- Logistic buyer receives quotation from
logistics service provider.
- Logistics buyer confirms the quotation
and delivery time to buyer app.
- Buyer app relays this information to the
buyer.
- Buyer confirms order to buyer app,
shares address, delivery instructions, and makes the payment. Order is
confirmed and the logistics service provider relays the turnaround time,
details of the delivery agent, tracking link, etc., to the buyer’s order.
- Logistics buyer and logistics service
provider sign a transaction-level contract for services.
- Logistics service provider picks up the order from the seller (either an ISNs or MSNs) .
- Order is
delivered to the buyer.
5. Returns/Refunds/Cancellations: Although not a formal stage in the transaction lifecycle, these events occur frequently and require a systematic model, policy, and process for efficient handling.
- Sellers will initiate returns only if the goods are found defective or damaged.
- Seller can initiate a refund instead of a return.
- Cancellations will only be possible if the seller has declared it in the transaction-level contract.
- Return logistics will be initiated by the seller or seller app as per the terms agreed in the return policy
6. Issue and Grievance Management: Not a stage in the transaction lifecycle but rather an exception-handling process. It can arise at any stage of the transaction, most commonly after an order has been confirmed and paid for.
Example of ONDC Transaction:
