In ONDC model e-commerce transaction is unbundled across Buyer App, Seller App and Logistics Partner

and communication across these systems is happening through APIs. For example, In an Open network
Buyer would place order and perform subsequent interaction with Buyer app like cancellation request
through buyer app, similarly Seller would interact on the network through Seller App, for example
acceptance of post shipment RTO while the order may be fulfilled by a Logistics partner on the ONDC
Network.
1. In a platform-based e-commerce system platform has visibility throughout the order journey,
whereas in ONDC model Buyer App / Seller App will have visibility of respective pieces. In such
scenario, how will Operations fundamentally differ from the operations on a platform-based e-
commerce system?
The operations will fundamentally differ in various aspects of the process flow in ONDC vs a
platform-based e-commerce system platform:
(a) Order generation: In ONDC, buyers will buy online without downloading or having any
application whereas buyers in e-commerce platform have to download several applications to
purchase required item. Here, the buyers and sellers can run transactions without thinking of
the platforms and apps they use. Thus, every order will go to ONDC which is broadcasted to
registered sellers and buyer receives order verification in real time from seller.
(b) Serviceability check: After order confirmation by seller, it has to be serviceable by a logistics
service provider. In ONDC, the broadcasted order of the seller will be sent to registered
logistics provider, and seller can select among them based on price quotations in real time.
However, in ecommerce platform, it is sent to particular logistics partner based on geography
pin codes, type of parcels etc decided earlier.
(c) Transit of order within network: The network in ONDC does not involve its own warehousing
or dark stores however these are maintained in ecommerce platform themselves or via 3PL
partners. In ONDC, after order confirmation and allocation to a particular logistics partner, they
will pick up directly from marketplace seller, processes at their middle mile (if required) and
deliver it to the customer. In case of cancellations/returns also, this flow will be reversed.
(d) Hyperlocal network: Using ONDC, users can get the advantages of a hyper local network that
let them connect with local stores in a specific region to provide better shopping experience.
(e) Collaboration and Communication: Communication channels within the apps need to be
robust to facilitate interaction regarding order details, shipping updates, and potential issues.
Unlike a centralized platform, where communication might be mediated by the platform itself,
in ONDC, the apps play a more direct role in fostering communication.
(f) Customer Service Dynamics: Customer service and support functions may be more dispersed
in an ONDC model. Buyers and sellers might rely on in-app support or dedicated support teams
specific to their roles. Ensuring a seamless customer service experience for both buyers and
sellers is crucial to the success of the ONDC model.

2. How do you foresee the evolution of the operations at respective ends of Buyer Apps and Seller
Apps that may now come into existence by virtue of unbundling and interoperability enable
through ONDC model?
The evolution of operations at the respective ends of Buyer Apps and Seller Apps, facilitated
by the unbundling and interoperability enabled through the ONDC model, can be anticipated
in several key aspects:
(a) Increased Specialization: Buyers and sellers can choose apps based on their specialized
features, leading to a more tailored and efficient user experience. This specialization can
lead to the development of apps that excel in specific areas such as product discovery, order
tracking, inventory management, or customer engagement.
(b) Innovative Features and Customization: The ONDC model's competitive environment is
expected to spur innovation in Buyer and Seller Apps, with developers aiming to distinguish
themselves through innovative features. Sellers may provide unique tools, analytics, and
inventory optimization in their apps, while buyers could benefit from advanced search
algorithms, personalized recommendations, and improved user interfaces.
(c) Interoperability Standards: The evolution of operations will involve the establishment of
standardized protocols and APIs that enable smooth integration between various apps. This
interoperability will enhance the overall efficiency of the digital commerce ecosystem,
fostering collaboration and data exchange among different stakeholders.
(d) Enhanced User Experience: Buyers and sellers having choice and flexibility empower users
to create a customized and user-friendly digital commerce experience. Improved user
experiences may include streamlined onboarding processes, intuitive interfaces, and
personalized dashboards.
(e) Dynamic Pricing and Competition: Sellers may leverage different apps to optimize pricing
based on demand, inventory levels, and market trends. Buyers, on the other hand, may use
apps that provide real-time price comparisons, discounts, and promotions. This dynamic
pricing environment can lead to more competitive and transparent markets.
(f) Data Ownership and Control: With unbundling and interoperability, there may be a greater
emphasis on data ownership and control. Buyers and sellers may have increased control
over their data, determining how it is shared and used within the digital commerce
ecosystem. This shift could result in a more transparent and trust-centric relationship
between users, apps, and service providers.
(g) Ecosystem Collaboration: The ONDC model fosters collaboration within the digital
commerce ecosystem. Buyer Apps and Seller Apps may collaborate on shared features,
ensuring a seamless experience for users across different apps. This collaborative approach
can lead to the development of integrated solutions, reducing redundancies and enhancing
overall operational efficiency.

3. What role would ONDC play as a facilitator between Buyer App and Seller App.

The ONDC (Open Network for Digital Commerce) plays a crucial role as a facilitator between
Buyer Apps and Seller Apps, serving as the backbone that enables seamless communication,
interoperability, and collaboration in the digital commerce ecosystem.

(a) Interoperability Enabler: ONDC establishes and promotes interoperability standards,

ensuring that Buyer Apps and Seller Apps can communicate effectively with each other. This
enables data exchange, order processing, and other essential functions, fostering a cohesive
digital commerce environment.
(b) Data Exchange and Integration: This includes order information, inventory data, customer
preferences, and other relevant details. By providing standardized APIs, ONDC ensures that
apps can integrate seamlessly, creating a unified and efficient digital commerce experience.
(c) Transaction Facilitator: ONDC acts as a transaction facilitator, overseeing the secure and
reliable exchange of payments, invoices, and order confirmations between buyers and
sellers. The platform ensures the integrity of financial transactions with various payment
methods, enhancing the trust and reliability of digital commerce interactions.
(d) Standards and Protocols Oversight: ONDC establishes and maintains standards and
protocols to govern interactions between Buyer Apps and Seller Apps. This includes data
security standards, communication protocols, and other technical specifications. By
providing a framework for compliance, ONDC contributes to a secure and standardized
digital commerce ecosystem.
(e) Marketplace Oversight and Regulation: ONDC may play a role in overseeing the
marketplace and ensuring adherence to regulations and ethical standards. The platform can
implement policies related to fair competition, consumer protection, and data privacy,
creating a regulatory framework that fosters responsible and transparent digital commerce
practices.
(f) Innovation and Collaboration Hub: ONDC serves as an innovation hub, encouraging
collaboration and the exchange of ideas between developers of Buyer Apps and Seller Apps.
The platform may facilitate partnerships, joint ventures, or shared development initiatives to
enhance the overall capabilities and features offered by the apps within the ecosystem.
(g) User Authentication and Trust Building: ONDC may implement robust user authentication
mechanisms to establish trust between buyers and sellers. By ensuring the legitimacy of
users on both ends, the platform contributes to a secure and trustworthy digital commerce
environment, reducing the risk of fraudulent activities.

4. What challenges might come across in the short term and in steady-state for transactions
between Buyer Apps & Seller Apps on ONDC?
Implementing transactions between Buyer Apps and Seller Apps on the ONDC platform comes
with various challenges, both in the short term and in steady-state. Addressing these challenges
is crucial for the successful operation of the digital commerce ecosystem. Here are some
challenges to consider:
Short-Term Challenges:
(a) Integration Hurdles
(b) User Adoption and Awareness
(c) Security Concerns
(d) Transaction Validation and Settlement
(e) Regulatory Compliance
Steady-State Challenges:
(a) Scalability with increasing traffic
(b) User Experience Optimization
(c) Data Privacy and Ownership
(d) Market Dynamics and Fair Competition
(e) Technology Evolution

5. What tech-based or process-based solutions would you propose for implementation to

address these challenges?
There are some process or tech-based solutions to address both types of challenges:
Short-Term Challenges:
(a) Development of comprehensive APIs: The APIs should adhere to industry standards and
guidelines to ensure seamless integration. Dedicated technical support need to be offered to
app developers during the integration phase.
(b) User adoption and awareness: User-friendly interfaces and intuitive features need to be
created within Buyer Apps and Seller Apps. Implementation of onboarding tutorials and in-
app guides should help users understand the functionalities of the ONDC platform.
(c) Security Concerns: we can implement robust encryption protocols, multi-factor
authentication, and regular security audits. Blockchain or other decentralized technologies
may be employed to enhance the security of transactions and user data.
(d) Real time transaction validation: we may use smart contracts to streamline and automate
payment processes securely.
(e) Regulatory compliance team: The dedicated compliance team should maintain open
communication with regulatory bodies to ensure timely updates and adherence.
Steady-State Challenges:
(a) Scalability: we may deploy cloud-based solutions and scalable infrastructure to handle
increased user traffic. Implementation of load balancing, caching mechanisms, and
distributed databases will optimize the performance.
(b) User Experience Optimization: We may utilize machine learning algorithms for personalized
recommendations and improved user interfaces. Continuous A/B testing for app features and
interfaces needs to be implemented.
(c) Data Privacy and Ownership: Advanced encryption techniques and privacy-preserving
technologies can be used to allow users to have granular control over their data. There
should be clear communication about data ownership and usage policies to users.
(d) Market Dynamics and Fair Competition: We may establish a regulatory body or committee
to monitor market dynamics and enforce fair competition. Deployment of algorithms for
monitoring market dynamics and preventing anti-competitive practices needs to be done.
(e) Technology Evolution: We may adopt an agile development approach to stay abreast of
technological trends. Implementation of continuous integration and continuous deployment
(CI/CD) pipelines is required for rapid updates and releases.

6. What KPIs would you define and monitor towards ensuring healthy operations on the
network?
We should define and monitor KPIs which can provide insights into the platform's performance,
user satisfaction, security, and overall effectiveness.
(a) Transaction volume: The total number of transactions conducted on the ONDC platform over
a specific period. It indicates the platform's usage and adoption, helping assess its overall
impact on digital commerce.
(b) User Engagement: It measures user interaction with Buyer Apps and Seller Apps, including
time spent, frequency of use, and feature utilization.
(c) Conversion Rates: It is the percentage of completed transactions relative to the total number
of searches or adding to cart. It reflects the efficiency of the platform in converting user
interactions into successful transactions.
(d) Response Time: It measures the time taken for the platform to respond to user interactions
and process transactions. This indicates the efficiency and performance of the platform,
contributing to a positive user experience.
(e) Issue/Ticket resolution time: The average time taken to resolve issues raised as a ticket
between buyers and sellers on the platform, buyers/sellers’ escalations to ONDC.
 (f) Marketplace Diversity: It measures the diversity of products, services, and sellers available
on the platform. This indicates the richness and competitiveness of the marketplace,
ensuring a variety of options for users.
(g) Innovation Index: It quantifies the frequency and impact of new features, updates, and
technological innovations introduced to the platform.
(h) Customer Satisfaction (CSAT) Score: It collects user feedback on overall satisfaction with the
ONDC platform. This is also a direct measure of user happiness and perception of the
platform's performance.

7. How would you establish the process for resolution of issues between Buyer Apps & Seller
Apps. For example, How would you establish principles for assigning costs between Buyer /
Buyer app, Seller / Seller App and Logistics service in situation like - "Product being RTO'ed
(Return to Origin) post shipment or post buyer refusing doorstep delivery. Seller, post
receipt of RTO product, claims that RTO’ed product is damaged"
Establishing a clear and fair process for the resolution of issues between Buyer Apps and Seller
Apps, especially in scenarios like product returns and claims of damage, is essential for
maintaining trust and ensuring a smooth operation on the ONDC platform. Here's a suggested
process along with principles for assigning costs in the specified situation:
The process flow is mentioned below:
(a) Initiation of return request: The buyer initiates a return request through the Buyer App,
providing reasons for the return, and selects the appropriate return reason.
(b) Verification and Authorization: The Seller App receives the return request and verifies it
against established return policies. If the return is valid, the Seller App authorizes the return.
(c) Return pick up and Tracking: The logistics service engaged by the Seller App coordinates the
return pick up. The Buyer App and Seller App both have visibility into the shipment's transit
tracking.
(d) Return processing with quality check: During pick up, the logistics service partner should
match the product with the catalogue image provided by seller and may take picture during
at customer doorstep. The seller app integrated with logistics provider should have quality
check questionnaire which the pick-up person answer during taking the product from
customer.
(e) Use of transparent flyer for reverse pick up: The logistics partner should use transparent
flyer with printed barcode which ensures the product is visible from outside packaging and
the barcode ensures there should not be product swap cases.
(f) Dispute Resolution Mechanism: If the Seller claims that the RTO'ed product is damaged and
the buyer disputes it, the ONDC platform may share picture of the product taken during
customer door pick up as well as scanned barcode of the flyer.
1. If the product during pick up time is same as the catalogue image, the accountability
would be on logistics service.
2. If the delivery pick up person finds a different product being returned by customer, he
should mark it “FAIL” in quality check and the seller app will be accountable.
3. If the order information has been passed incorrect to the seller app and it further gets
broadcasted wrong to logistics provide, in such case buyer app will be accountable.
Cost Attribution Principles:
1. Return Shipping Costs:
- If the return is due to buyer-related issues (e.g., change of mind), the Buyer or Buyer
App typically bears the return shipping costs.
 - If the return is due to seller-related issues (e.g., wrong item shipped), the Seller or
Seller App typically bears the return shipping costs.
2. Product Damage Assessment:
- If the returned product is found to be damaged, and the damage is attributable to the
buyer's actions (e.g., mishandling during return), the Buyer or Buyer App may be
responsible for the damage costs.
- If the product is found to be damaged due to a fault on the seller's side (e.g., poor
packaging), the Seller or Seller App may be responsible for the damage costs.
3. Logistics Service Liability:
- If the damage occurred during the return shipment and is attributable to the logistics
service, the logistics service provider may be liable for the damage costs.
A comprehensive audit trail will be maintained for each return and dispute resolution case. This
includes timestamps, communication logs, and details of assessments. This documentation is crucial
for transparency and accountability.