Digital Commerce

3. Open Network for Digital Commerce (ONDC): Unbundling E-Commerce Monopolies

Aria Kenangan Aria Kenangan
📅 June 20, 2026
⏱️ 5 min read
🏷️ Policy, Infrastructure
E-Commerce Unbundling

Structural Mechanics

The Department for Promotion of Industry and Internal Trade (DPIIT) designed the Open Network for Digital Commerce (ONDC) to unbundle the vertically integrated e-commerce value chain. Unlike monolithic platforms (such as Amazon or Flipkart), ONDC operates as an open-source protocol. It separates the buyer-side application, seller-side application, and logistics provider into independent nodes. This structure allows a small merchant on a local seller app to receive orders from a buyer using any major consumer app, democratizing discoverability without steep platform commissions.

Monolithic Model:
[Buyer] ---> [Closed Platform (Amazon/Flipkart) - Controls Search, Merchant, and Logistics]

ONDC Protocol Model (Unbundled):
[Buyer App] ---> [ONDC Open Protocol Gateway] ---> [Seller App (Local Merchant)]
                                              ---> [Logistics App (Delivery Partner)]

Data-Driven Metrics

  • Network Expansion: ONDC’s active merchant base has scaled to over 500,000 sellers, with over 85% categorized as small and medium enterprises.
  • Commission Arbitrage: Platform commissions have fallen from 25–35% on proprietary platforms to 3–5% on the ONDC network.
  • Logistics Integration: Over 150 third-party logistics providers are programmatically integrated, ensuring last-mile delivery automation.

Strategic Vector

ONDC must establish a standardized, decentralized dispute resolution protocol (ODR) to resolve merchant-consumer disputes without a central platform operator.