All you need to know about ONDC: The UPI of e-commerce in India

ONDC is a win-win game for everyone, including the marketplaces. It could empower consumers and businesses alike, and truly democratise e-commerce.

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THE celebrated English singer-songwriter and musician John Lennon's seminal song, Imagine equips us to traverse possibilities.

Imagine, if you may, that you walk into a market, say the famous Manish Market in Mumbai or Sarojini Market in New Delhi. As you are hurriedly browsing through the stores because you have limited time and you need to leave soon, you realise that all the good vendors have been deliberately prohibited from displaying their products close to the main entrance of the market. Worse still, you are told that you can only buy from certain vendors and not from others.

Once you walk out of the market after shopping from some of the not-so-good stores close to the main entrance, you realise that it was not a good bargain after all. The market was manipulated to push out mediocre products, and you, as a customer, were forced to buy below-par products without a good discount and the good vendors with better products were unfairly prohibited access to customers like yourself.

What is a major competition issue plaguing the e-commerce sector?

Superimpose this onto the e-commerce space in India. Often, the sellers' side and the consumers' side have raised concerns about the tactics allegedly employed by the market intermediaries as by the traditional marketplace in the above example. The Competition Commission of India (CCI), back in 2020, published a detailed study called Market Study on E-Commerce In India, which made certain serious observations on some of these alleged tactics, including:

1. e-marketplaces wearing the dual hat of a marketplace and facilitator, and also a seller in that very marketspace (directly or through affiliated entities);
2. marketplaces using the humongous data that they have access to, to come up with their own white label products; and
3. marketplaces give more visibility to certain 'preferred' sellers who have special commercial arrangements with the marketplaces at the cost of other sellers.