Unbundling, in the context of digital commerce, is a business process that involves deconstructing a collection of products or services within a value chain. This process is aimed at delivering superior value to consumers by allowing each product or service to be provided by a distinct player.

After unbundling, each product or service can be provided by a distinct player to deliver the highest value to the consumer.

This article will investigate how ONDC will transform digital commerce by unbundling various products and services in a digital commerce marketplace.

What is ONDC

The Open Network for Digital Commerce (ONDC) is a network that will facilitate commerce in a wide range of sectors, including grocery, electronic, food, agricultural, construction materials, hotel and travel booking, and carpentry services.

Its objective is to establish an open network for digital commerce that will establish competitive, inclusive, and open marketplaces online, thereby providing choice and opportunity for all.

Through unbundling, the e-commerce wave will be accessible to all, including the smallest vendors in a country’s most remote regions. This empowerment of small vendors is a beacon of hope, promising a more inclusive and diverse digital commerce landscape.

The impact of ONDC on the digital commerce sector

Until now, you have employed a variety of online platforms as a consumer. However, your options are restricted. The vendors who are listed on the platform are the only ones from whom you can purchase.

In the same vein, a vendor is restricted to selling to a buyer who is conducting a platform check. As a result, sellers are compelled to secure listings on numerous platforms. If not, the danger of being visible to only a few buyers is forfeited.

In any commerce transaction, there are numerous participants, including

1. Buyer

2. Vendor
3. The logistics team will deliver the physical products.
4. Insurance personnel, in the event of a high-value purchase item
5. Financial organizations that facilitate payment and, when applicable, offer loans to buyers or vendors.
6. Rating agencies, which can independently evaluate the excellence of a product and the overall delivery of a service.
7. The Grievance and Redressal Group, which is implicated in the event of a dispute.

Until recently, the platform was responsible for managing all of these duties when you purchased an item from it.

While it may initially appear advantageous to consumers, certain platforms have implemented policies that may prove detrimental to numerous participants over time.

1. For instance, it is exceedingly challenging for a modest seller to secure a listing on a platform.
2. In numerous instances, the seller must pay a commission to the platform proprietor.
3. In numerous instances, small sellers are uncertain whether their product will appear on the first page of the search results when a buyer queries for a product on that platform.
4. Consequently, tiny sellers or sellers from small towns are frequently in a precarious position.
5. As a consumer, you must utilize all of the services the platform has partnered with. Buyers are not provided with any alternatives. For example, even if the delivery or logistic service is subpar, you must still rely on it.

ONDC will alter that scenario through unbundling. All sellers will now have access to all customers.

The Internet or email facility can be used as a comparison.

The Internet is an open network. Any website can be accessed via the Internet. Similarly, sending an email to an individual not affiliated with the domain from which the email is being sent is possible.

In the same way that the Internet operates on HTTP, email operates on SMTP, and ONDC operates on the BeckN protocol.

ONDC is an open and constructed network. This means that it is not controlled by a single entity but is instead open to all participants. This open nature of ONDC ensures transparency, fairness, and equal opportunity for all participants, thereby fostering a more competitive and innovative digital commerce environment.

What actions will be taken by ONDC?

ONDC, as an open network, will play a crucial role in the unbundling process. It will unbundle a series of services that would otherwise be unified on a single platform, thereby creating a more competitive and diverse digital commerce landscape.

This implies that a distinct player can fulfill each discrete service, such as purchasing, selling, goods delivery, and financial assistance for product purchases.

Given that each individual exclusively offers a service, they must be proficient in their respective roles. This will not only lead to innovation but also the provision of the highest quality service at a reduced cost, sparking excitement and intrigue about the potential of ONDC.

ONDC will facilitate buyers’ and vendors’ digital visibility, allowing them to conduct transactions through an open network.

By dismantling silos and establishing a unified network, it will empower both consumers and merchants. This will stimulate both innovation and expansion.

With ONDC, any vendor, regardless of their digital proficiency and size, could participate in an open network without the necessity of independently developing the entire ecosystem. This means that even small vendors or those from remote areas can access a wide customer base, potentially increasing their sales and profitability.

Innovation fueled by ONDC

ONDC will encourage innovation in all segments and among all stakeholders.

ONDC will not only unbundle services but also encourage innovation among all stakeholders.

For instance, logistic and delivery agencies may implement innovations such as drone-assisted delivery to specific locations, electronic item installation and delivery by a single individual, combined delivery of multiple orders with a reduced overall service charge, and delivery in conjunction with insurance.

These innovations will not only improve the efficiency of the delivery process but also enhance the overall customer experience.

As all of these services are unbundled, each participant can operate from a position of strength, innovation, and uniqueness.

In what ways will the unbundling of value give consumers new choices?

The ONDC ecosystem will open up a plethora of options, ensuring that consumers are not limited to a few choices. This reassurance of increased choices and financial inclusion should instill confidence in the audience about the benefits of ONDC.

1. Sellers may register through ONDC regardless of size or location. They are not required to possess digital proficiency or begin their business from scratch to establish an online presence.
2. Once a seller’s products are listed on the ONDC ecosystem, they will be visible to all consumers.
3. The ONDC allows various service providers, including electricians, tailors, carpenters, and home chefs, to register and display their services and offers to all members of the ONDC ecosystem.
4. The improved visibility of the digitized inventory should decrease the inventory holding cost and reduce expiration losses. This will also increase cash flow and more efficient working capital.
5. Various financial service providers should meet the buyer’s requirements by developing innovative products. For instance, a farmer may obtain a loan to purchase agricultural equipment. The crop cycle can be synchronized with the loan tenure.

6. Additionally, we can observe the introduction of new financial products specifically designed for vendors, such as invoice discounting.
7. Similarly, we will observe innovative products from various insurance companies.
8. Rating agencies may arrive to issue certificates or insignia to various service or product providers on the quality of their previous products.
9. Improved discovery and enhanced availability could result in the consolidation of orders served at a potentially lower cost, which could boost community group purchasing.
10. If you order three items from three distinct platforms, a delivery person associated with each platform currently delivers to you separately. However, these orders can be consolidated and delivered in a single shipment according to the customer’s specifications.

Decentralization, increased utilization of a variety of discrete services, interoperability, and transparency are the objectives of ONDC through unbundling.

This implies that a significant number of participants will participate in the formal economy, which will further facilitate overall financial inclusion.