ONDC's Interoperable QR Codes for Sellers | Basics
Bringing digital open network to physical stores
Hello, 👋
Even after a decade of e-commerce revolution, commerce in India is skewed towards unorganised offline small-scale retail. This includes all artisans, neighboring shops, small brands, etc. E-commerce had a challenge that it was dominated by few market entities who started to dictate terms of business. It makes sense as they got hold of distribution. With ONDC, GOI tried to democratise the e-commerce by opening up the platform model.
Now, the next challenge was to increase the penetration of ONDC into that untouched part of commerce where digitalisation has not entered. This is the phase where ONDC is trying to bring in new features which can make digitalisation lucrative for these businesses.
Interoperable QR code is one such feature. In this piece, we will try to understand what this feature is, how it will help sellers and consumers, etc.
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The Open Network for Digital Commerce (ONDC) has introduced a new tool to help small businesses, like local shopkeepers and artisans, sell their products offline/online more easily. This tool is called the interoperable QR code.
What is an Interoperable QR Code?
Unique Code: Each seller gets a unique QR code.
Easy Scanning: Customers can scan this QR code with their phones.
Initial Apps: Right now, it works with buyer apps like Magicpin and Paytm or any other QR scanner app, with more apps to be added later.
How It Helps Sellers:
Display Anywhere: Sellers can place their QR codes on their shop fronts, products, flyers, or social media.
Direct Link: Scanning the code takes customers directly to the seller’s online store in their preferred app.
No High Costs: It reduces the need for expensive advertising or high platform fees.
How It Helps Customers:
Convenient Shopping: Customers can quickly find and buy from local sellers by scanning the QR code.
Supports Local Businesses: It makes it easier to discover and purchase from small, local businesses.
Bigger Impact:
Economic Growth: This tool aims to bring millions of small businesses online, driving economic growth and digital inclusion in India.
Open Marketplace: It helps create a fairer and more inclusive digital marketplace, allowing small businesses to compete with larger companies.
Potential challenges:
Awareness and adoption: Both sellers and customers need to be educated about this new system.
Technical infrastructure: Requires widespread smartphone usage and reliable internet connectivity.
Use Cases
Scenario: A customer visits "Sharma's Fashion Hub," a local garment shop in Delhi.
Usage of QR codes inside shop
Store Entry and QR Code Scan:
The customer sees a single QR code displayed prominently at the entrance or counter.
They scan this code using their preferred shopping app (e.g., Paytm or Magicpin) or any other QR scanner app.
This action connects them to Sharma's digital storefront within the app.
Digital Storefront Access:
Upon scanning, the customer now has access to Sharma's entire digital catalog within their app.
This catalog includes all items available in the physical store and potentially additional items not displayed due to space constraints.
In-Store Browsing with Digital Support:
As the customer browses the physical store, they can use the app to:
Check if an item they see in-store is available in different sizes or colors
View more detailed product information than what's on the physical tags
See current prices and any ongoing discounts
Price Checking and Comparison:
For any item in the store, the customer can quickly look it up in the digital catalog to confirm the price.
They can compare prices of similar items within Sharma's inventory.
Inventory Exploration:
If a customer can't find a specific item in the physical store, they can check the digital catalog to see if it's available but not on display.
Sorting and Filtering Options:
Within the app, customers can sort and filter Sharma's entire inventory by:
Price range
Category (e.g., shirts, trousers, dresses)
Size availability
New arrivals
Discounted items
Additional Information Access:
Through the app, customers can easily view:
Store policies (returns, exchanges)
Current promotions or loyalty programs
Store hours and contact information
Purchase Options:
After deciding on their purchases, customers have options:
Buy in-store through regular checkout
Purchase through the app for in-store pickup
Order items for home delivery if that service is available
Post-Purchase Interaction:
After making a purchase, customers can easily reorder items or check for new inventory by accessing the store's digital catalog through the same QR code.
This single QR code system simplifies the process for both the store owner and customers. It provides a straightforward way for customers to access the store's digital presence, bridging the gap between physical and online shopping experiences. The store owner only needs to manage one QR code and ensure their digital catalog is up-to-date.
Usage of QR across multiple touchpoints - on products, packaging, flyers, and social media
In-Store Product Tags:
Every product in the store has a tag with the store's QR code.
When a customer scans the code on a specific item:
They're taken to the store's digital catalog in their preferred app.
While it doesn't automatically show that specific item, customers can easily search for it in the catalog.
Product Packaging:
When a customer buys an item, the packaging includes the QR code.
At home, if they scan this code:
They can easily reorder the same item.
They might discover complementary products.
They can check care instructions or return policies.
Flyers and Print Advertisements:
Sharma's Fashion Hub distributes flyers with seasonal offers, featuring the QR code.
When a potential customer scans the code from the flyer:
They're directed to the store's digital catalog.
They can browse the advertised deals and the full product range.
They might find store location and opening hours.
Social Media Posts:
The store includes the QR code in its social media posts on platforms like Instagram or Facebook.
Followers who see an interesting outfit post can scan the QR code:
This takes them directly to the store's digital catalog.
They can then search for the featured items or browse other products.
Business Cards and Signage:
The QR code is printed on the store's business cards and outdoor signage.
Passersby or people receiving the card can quickly access the store's digital presence.
Benefits of this approach
Consistency: Using the same QR code everywhere creates a unified brand experience.
Simplicity: The store owner only needs to manage and update one QR code.
Flexibility: The single code can lead customers to an always-updated digital catalog, regardless of where they scan from.
Extended Reach: Every product becomes a potential portal to the store's full digital offering.
Analytics Potential: The store could track which channels (in-store, social media, flyers) are driving the most scans and engagement.
Customer Convenience: Customers have a consistent way of interacting with the store across various touchpoints.
Cost-Effective Marketing: Every product sold becomes a marketing tool for future purchases.
Interoperable QR Code Technical Functioning:
QR Code Generation:
Each seller on the ONDC network is assigned a unique identifier.
This identifier is encoded into a QR code along with additional metadata about the seller.
QR Code Structure:
The QR code likely contains:
Seller's unique ONDC identifier
Network participant details (to identify which network the seller is on)
Possibly a URL or endpoint for the ONDC gateway
Scanning Process:
When a customer scans the QR code using a buyer app (e.g., Paytm, magicpin):
The app decodes the information in the QR code.
It extracts the seller's unique identifier and network details.
ONDC Protocol Interaction:
The buyer app uses the extracted information to formulate a standardized ONDC protocol request.
This request is sent to the ONDC gateway.
Gateway Processing:
The ONDC gateway receives the request and uses the seller's identifier to route it to the appropriate seller app.
Seller App Response:
The seller app processes the request and sends back the seller's catalog or store information via the ONDC gateway.
Buyer App Display:
The buyer app receives the seller's information and displays it to the user, creating a seamless connection between the physical QR code and the digital storefront.
References:
ONDC - ONDC launches Interoperable QR Code: A game-changer for Indian ecommerce
ONDC Launches Interoperable QR Code (inc42.com)
ONDC Unveils Interoperable QR Code to Boost E-Commerce (knnindia.co.in)
ONDC QR Code Will Help Small Businesses in Establishing Digital Presence: Thampy Koshy (businessworld.in)
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ABOUT THE AUTHOR
Hey everyone, I'm Garvit Sahdev 😎. I'm on a mission to gain a deeper understanding of the world, and to develop solutions that can trigger significant global change.
My curiosities span various domains including food, business theories, material science, market size calculations, economics, politics, and sports, etc. 🧐
Professionally, I have a diverse background spanning startups, consulting, policy development, market research, system building, ISO, colour physics, nanomaterial synthesis, textile chemistry, etc. 🐘
Note: Generative AI has been used for writing this piece under the supervision of the author.
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