Despite few glitches, ONDC's Bengaluru rollout takes off

Jay Prakash of Aashirvad store in Domlur, Bengaluru. Photo: SellerApp

Restaurants and grocery stores in Bengaluru have started to fulfil orders on the government-backed Open Network for Digital Commerce (ONDC), starting today (September 30) which is a litmus test for the network. It is now live for 16 pin codes in Bengaluru and customers are allowed to order, within a six km radius.

According to data as per ONDC, 161 orders were placed on the network across Paytm, IDFC, Spicemoney, and Mystore which are the buyer apps. Of these, 55% of the orders were from grocery stores while 45% were food & beverages.

According to a source tracking the developments, they were expecting to clock hundreds of orders today and expected it to shoot up to more than a thousand by early next week. However, problems such as low awareness among the consumers, and users still awaiting the new rollouts on their apps, were some of the primary issues for the slow start.

Few sellers even told Moneycontrol that they did not get even one order.

Green Mart, a grocery store in Indiranagar in Bengaluru, saw its first two orders come in around noon. At the time, the store's manager, Mohammed Ashrad said that the orders had a value of Rs 115 and Rs 35, respectively. Customers pay a delivery charge of Rs 40-60 depending on the distance, and the logistics for any orders are currently handled by Loadshare and Dunzo.

Green Mart was onboarded by SellerApp. According to SellerApp founding member Soumya Nagarajan, they have onboarded 31 Kirana stores, 11 direct-to-consumer (D2C) brands and five Consumer Packaged Goods (CPG) brands.

Customers can order food on the platform as well, along with purchasing groceries. Girish Pai, the founder of Growth Falcons, a seller-side app which is onboarding restaurants for ONDC in Bengaluru said it has currently onboarded 100+ restaurants and in the coming six months, they plan to onboard at least 1,000 restaurants on the platform.

Commissions for food delivery, he added, are considerably lesser than what is charged by aggregator apps today.

The Bengaluru trials have begun with Paytm, MyStore and Spice Money as buyer-side apps – platforms where users can sign up and place orders via the network. According to people close to the developments, the onboarding of users in the Bengaluru beta testing will happen in a phased manner and not all at once.

The roster of 11 seller-side apps, which will host grocery merchants, food and beverage outlets and consumer packaged goods (CPG) brands, include Unilever’s UShop, GoFrugal, SellerApp, GrowthFalcons, nStore and Innobits, among others.

How does ONDC work?

The structure of separate buying and selling platforms is one of the key differences between the closed-loop model of e-commerce and the open-network model. As all e-commerce platforms – from Amazon and Flipkart to Swiggy and Zomato – today are cast in the former style, they can control which sellers are given prominence in the listings and have gated communities of users.

ONDC seeks to break down this structure into a modular form of e-commerce where, potentially, any user on any platform can buy from any seller on any other platform.

Meanwhile, ONDC has come out with a consultation paper on how trust in e-commerce transactions will be managed between users and different network participants – in terms of search and discovery of products, order fulfilment, payments, returns and refunds, among other things.

It is an open consultation and stakeholders can share responses by October 31.

ONDC aims to raise e-commerce penetration in the next two years to 25 percent of India's consumer purchases, from nearly 8 percent now. It also hopes to sign up 900 million buyers and 1.2 million sellers on the shared network within the next five years, while achieving a gross merchandise value of $48 billion.