ONDC to charge retailers one-fourth of Amazon, Flipkart

NEW DELHI: ONDC, the government-backed open network e-commerce platform, will cost small retailers a quarter of what they pay to e-commerce platforms like Amazon and Flipkart to access their technologies and processes. 

Government sources told TNIE that small retailers can access the ONDC platform at 8-10% of the selling price of products compared to 18-40% that they pay to Amazon and Flipkart.  A commerce ministry official, however, said that it is the market that would dictate the fee/commission charged on the platform and not the government.

“We have no intention of fixing any cap on commission charged by the platform, it would be purely decided by the market forces,” said the official. The official explained that for any existing e-commerce platforms like Flipkart or Amazon to be part of the ONDC they will have to bring both their sellers and buyers on the platform.

The platform will host buyer and seller apps separately, unlike e-commerce platforms like Amazon and Flipkart, which are both buyers and sellers platforms.  The official, however, said that none of the top e-commerce platforms have evinced any interest so far for onboarding on ONDC.

The Open Network for Digital Commerce (ONDC) started its beta testing process with small retailers across 16 pin codes in Bengaluru on Friday. ONDC, which is based on open specifications, will boost small merchant digitisation and e-commerce scale and will reduce the dominance of big players such as Amazon and Walmart-backed Flipkart. It is an initiative of the Ministry of Commerce and Industry. 

Three buyers apps – Paytm, Spicemoney and Mystore – were on the platform on the first day of the beta testing. As many as 11 seller apps, which basically are aggregators of small retailers and kirana stores, also integrated with the system on the first day.