An open network can reduce dependence on one marketplace, but it also distributes responsibility across more participants. The customer still expects one coherent order.
Quick View
Open interoperable network
Buyer and seller apps
Split accountability
Repeat economics
What Matters Now
ONDC aims to enable discoverability and transactions across an open network rather than requiring buyers and sellers to remain inside one vertically integrated marketplace. Buyer applications, seller applications, logistics providers and technology participants may each perform a different role.
This can expand reach, but the merchant must understand who controls catalogues, pricing, payment, fulfilment, returns, customer communication and settlement. A network transaction can fail even when each participant believes another party owns the exception.
Tax and accounting follow the actual supply and contractual role, not the marketing label “open network”. Businesses should map invoicing, commission, logistics charges, discounts, GST reporting and settlement deductions.
How It Works
| Stage | What happens | Control |
|---|---|---|
| Discovery | Seller catalogue becomes visible across compatible buyer apps. | Maintain accurate price, inventory and terms. |
| Order | The buyer selects through a network participant. | Capture the complete order trail. |
| Fulfilment | Seller and logistics providers coordinate delivery. | Define hand-off and proof-of-delivery rules. |
| Settlement | Payments and deductions flow through agreed participants. | Reconcile gross order to net bank credit. |
Decision Framework
Start with the exact decision being made. A payment choice, credit facility, investment, policy, remittance or compliance step should not be judged only by convenience or headline return. For ONDC: Can Open Networks Transform E-Commerce?, the four useful lenses are model: Open interoperable network; participants: Buyer and seller apps; control risk: Split accountability; commercial test: Repeat economics.
Next, identify the downside before considering the expected benefit. Ask how much money can be lost or delayed, which obligation becomes fixed, who controls the data or asset, what happens when the provider fails, and which official complaint or appeal route remains available. This converts a marketing claim into a testable decision.
Finally, define the review trigger. A rule change, missed payment, benefit revision, sharp market move, data incident, unresolved reconciliation or change in personal cash flow should reopen the decision. Evidence should be collected when the transaction occurs, not reconstructed after a dispute.
- Discovery: Maintain accurate price, inventory and terms.
- Order: Capture the complete order trail.
- Fulfilment: Define hand-off and proof-of-delivery rules.
- Settlement: Reconcile gross order to net bank credit.
Who Bears the Risk
| Participant | Primary responsibility | Failure to avoid |
|---|---|---|
| User or customer | Read the terms, authorise deliberately, preserve records and act within personal cash-flow or risk limits. | Unclear owner for refunds. |
| Provider or intermediary | Make accurate disclosures, operate the agreed process, protect data or assets and maintain a usable grievance route. | Discounts not reflected in tax records. |
| Adviser or finance team | Apply the current rule to the actual facts, separate assumptions from evidence and explain material downside clearly. | Gross sales compared with net settlement. |
Regulation can allocate duties, but it cannot remove commercial or market risk. The safest operating approach is to know which participant owns each step and to escalate an exception before money, data or legal rights become difficult to recover.
Practical Example
Action Checklist
- Map every participant and contract.
- Define catalogue and inventory ownership.
- Reconcile taxes, discounts and commissions.
- Set service levels for fulfilment and refunds.
- Maintain a single exception log.
- Measure contribution margin by order source.
Evidence to Keep
- Network order and participant IDs.
- Invoice and tax record.
- Pickup and delivery proof.
- Settlement statement.
- Complaint and refund trail.
Warning Signs
- Unclear owner for refunds.
- Discounts not reflected in tax records.
- Gross sales compared with net settlement.
- Inventory shown without operational capacity.
- Growth measured without contribution margin.
Common Questions
Is ONDC one consumer marketplace?
It is an open network with multiple participating applications and service providers.
Who is responsible for an order?
Responsibility depends on the contracts and role performed; the operating map should identify each owner.
Does ONDC change GST law?
No. Tax treatment depends on the underlying supply and applicable GST provisions.
What should merchants measure?
Order quality, cancellation, fulfilment, refund time, settlement accuracy and contribution margin.
Official Sources
Rules, rates, product terms and portal processes can change. Use the latest official text and transaction-specific facts before acting.