Pizza chain Domino's is getting ready to join Open Network for Digital Commerce (ONDC) as it gets its technology integration in place to start taking orders on the interoperable commerce network, a top Jubilant FoodWorks executive told analysts in an earnings call on May 17.
“We do want to get onto the ONDC bandwagon. We are organising ourselves to launch it on ONDC. Wherever customers are, we want to serve them with Domino's pizza… At the moment, our teams are working on technology scoping and integration. Whatever time it takes to launch, we will get into ONDC,” said Sameer Batra, president and chief business officer of Jubilant.
The government-backed interoperable commerce network is being seen to be emerging as a threat to the duopoly of Swiggy and Zomato in the Indian food delivery market. While the platform commissions charged to restaurants by the duo could range between 20 percent to 30 percent, the same on ONDC is around 8-9 percent as of now.
According to ONDC, lower commissions on the network will translate to more affordable prices as sellers like restaurants, grocery shops, and electronics brands are expected to pass on the benefits to the consumers. When listing prices of food items on the network appeared to be substantially lower than Zomato and Swiggy earlier this month, many thought it to be the proof of the pudding.
But, analysts of different brokerage firms and industry experts have pointed out that the lower prices on ONDC in the recent past have been on account of large discounts offered by network participants like seller-side apps, buyer-side apps and ONDC itself — which may not be sustainable in the long run.
It is, however, no secret that Jubilant prefers to service more orders directly via its own app to save on costs, although the company’s management reiterated that it would like to serve up pizzas on any channel.
Last year, Jubilant started a loyalty programme wherein it is offering a free pizza to customers after they place six orders on its app. Enrolment to loyalty programme – referred to as Domino’s Cheesy Rewards – has grown by 28.3 percent versus the prior quarter to 13.6 million and the loyalty order contribution reached 45 percent in March 2023, the company said in its earnings report earlier this week.
Betting on quick deliveries
The Domino’s franchise owner is one-upping the likes of Zomato and Swiggy on food delivery timelines. To be sure, the company has always been doing its own pizza deliveries even when orders are placed on the food aggregators so that it can control the quality and deliver an order within the promised timeline of 30 minutes.
Now, it has started piloting 20-minute pizza deliveries in Bengaluru, where the brand has a dense network of 175 physical stores, and plans to gradually extend this quick service to 6-7 of the other top metro cities.
On the analyst call, Batra said that this will also mean better earnings for delivery executives of the company. The plan is akin to what any hyperlocal commerce platform will tell you — faster deliveries mean that every rider can do more orders per hour which will translate to more earnings.
“We have guaranteed 20 minutes when we believe the right time from the store to the customer location is about 7-8 minutes. So, if you add 7-8 minutes (for going back from the customer location to the pizza store)...theoretically, you can do four deliveries per hour. By then, we are obviously not at four. So, there is huge headroom to be more efficient,” said Batra.
“And anyway, we pay this workforce per delivery… From a customer's perspective, it materially improves the Net Promoter Score, almost to the tune of 500 to 1,000 basis points… We have seen this uplift if you do it consistently, so that gives us the confidence,” he added.
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