Introduction
In the
prevailing model of eCommerce, the same entity provides end-to-end solution as
a market place which manages both customer experience and seller interface. Such an end-to-end solution offer significant influence
and control to the platform providers compared to the end points like the
seller / buyer. This enables the platform providers to give priority to
customer demands which is their natural strategic choice to build and retain an
exclusive customer base as their lever for market control. With this prioritisation
logic, they may follow a no-questions asked return and refund policy. Sometimes
they take this to the logical extreme even if the return request is not on
account of the fault of the seller which is possible with the control of the
funds and contractual hold they have on their on the sellers which the economists
explain as ‘near monopsony’ power of these platforms. Any loss on account of this is usually borne
by the seller. Such selective service also enable significantly big margin for
the platforms.
In the end,
if there is any dispute with the seller, the existing legal framework forms the
basis for the dispute resolution between the buyer and merchant as the merchant
is the seller on record and not the platform providing the market place.
ONDC
Network
In case of
ONDC, with unbundling of the building blocks of the transaction (like seller
interface, buyer service, logistics etc) there is possibility for different models
to evolve which will suit different segments of buyers and sellers.
A. Different Business Models with
divergent service level offers
1. Some Buyer application would like to
offer a select service and may offer no-question asked return / refund with
then insisting on payment to be routed through them so that the full payment to
seller is made only after the necessary lock-in period for customer return.
In this case, the search request and order placement will include these
conditions and only offers meeting these conditions will be accepted by the
Buyer App and shared with the customer which means the seller has the option to
respond to such conditions without being dictated by the intermediary.
2. In some cases the Seller App (may be a discount store) may offer products
with a no or limited return which will
be part of if its offer when it returns response to a search by a buyer app and
only customers accepting these conditions explicitly will be serviced .
The important point to note is that the ONDC network offers opportunity
for sellers offering different price/ service combination and buyers with
different price/service preference to come together and transact in a
transparent fashion thus creating a healthy and diverse market place which is what
we are familiar in any physical market.
B. ONDC checks and balances encouraging
and incentivising fair and responsible business practices
As in the case of the prevailing eCommerce market place, the
legal framework still remains the same and there is no different legal
framework for ONDC. However, as a community manager ONDC will develop an
enhanced set of checks and balances to offer better experience both to the
buyer and seller thus reducing the need of legal recourse.
1. ONDC will onboard buyer and seller
apps only after establishing their identity
2. ONDC has stringent polices on
expected behaviour of each NP.
3. Most of these policies are
programmatically enforced
4. All NPs are onboarded only after their
apps / software is tested for their compliance to ONDC protocol
5. All NPs sign an agreement confirming
their commitment to the policies
6. All seller market places are expected
to undertake due diligence on the sellers onboarded by them and expected to
watch for their responsible behaviour
7. ONDC will compute and publish network
level reputation and credibility score of platforms and sellers which will act
as a strong check on them.
8. ONDC will monitor and publish record
of grievance redressal and dispute resolution performance of each app and
seller
9. ONDC is establishing a framework and platform
for Online Dispute Resolution (ODR) following the guidance issued by NITI Ayog
for exception handling.,
10. ONDC will suspend/ expel from the
network entities with continuous aberrant behaviour
11. The onboarded platforms are required
to undertake periodic system and process audits with respect to compliance with
network policies and share reports with ONDC
12. ONDC may undertake periodic mystery
shopping exercise to monitor performance of participants and share feedback
with the entities
C. Inherent nature of ONDC network
encouraging healthy and fair market practices.
1. ONDC network being unbundled, very
often the Buyer app will only have buyer as clients and Seller app will have
only sellers as clients (in some cases same entity may have both apps)
2. With no platform able to have captive buyers and
sellers and the buyers and sellers being available as a cohesive pool in the network
discoverable and accessible to all buyers and sellers, there will be many buyer
and seller apps giving multiple options to the consumers limiting the possibility
of the platforms for user-unfriendly measures.
3. The Buyer app will be forced to have
loyalty to the buyers and would have to take extra effort in terms of functionalities
and services to retail loyalty and continued support from the buyers. Their services
thus will include active follow-up with sellers for grievance redressal and
escalating aberrant behaviour by the sellers if any
4. Seller Apps on the other hand with no
captive buyers but with a responsibility to ensure good customer service to
attract the buyers, will have to put in checks and balances to ensure that
their sellers treat the end customers in a fair and transparent fashion failing
which their network wide reputation will suffer and may be rejected by buyers
5. With multiple platforms offering
competing services, there will be possibility for continuous social audits on
the practices by the platforms and ONDC will enable publishing of such social
audits. This becomes all the more relevant with multiple buyer and seller apps
in the market giving strong competition
6. Even cases where the platforms are providing
both buyer and seller apps, each side will attempt to focus on their consumer (buyer
for buyer app and seller for seller app) as their own platform offer of sellers
for buyers and buyers for sellers will only be a small part of the total
available options in the network.
