Festive bonanza drives ONDC to new peak of 53,000 retail orders in a day

ONDC is gearing up to hit 200,000 transactions a day by the end of 2023, from the current high of 160,000 transactions

As Virat Kohli and KL Rahul neutered the Australian bowling attack on Sunday (October 8), the Open Network for Digital Commerce (ONDC) saw retail orders — which mostly comprise food, beverages, and grocery — hit a fresh peak of 53,000, driven by an array of deals and discounts introduced for the festive season. The figure also includes a small number of electronics, home decor, and other items that are counted in the retail transaction category.

With the government-backed e-commerce network raising its incentive levels for platforms from October 3, industry sources believe players like Magicpin, Paytm, Ola, and PhonePe have got an extra mileage to step on the accelerator to push sales during the festive season that also overlaps with the ongoing ICC Cricket World Cup.

According to an internal slideshow of ONDC accessed by Moneycontrol, retail purchases on the network rose almost 500 times from 1,281 in January to 608,307 in September. Apart from deals and discounts funded by ONDC, industry executives feel lower commissions on the network than e-commerce majors like Amazon, Flipkart, Zomato, and Swiggy have enabled sellers and network players to offer better prices to consumers.

ONDC did not respond to Moneycontrol’s queries on the presentation till the time of publishing.

Mobility vertical taking off

The ONDC presentation showed that grocery transactions have grown 200 percent in the last 2 months, the number of sellers on the network crossed 75,000 in September, and seller penetration has increased to over 470 cities.

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Meanwhile, ride-hailing transactions on the network have taken off as well, growing almost 4,000-fold from around 700 in January to about 2.7million in September.

Last month, Moneycontrol had reported that ONDC’s mobility pilot in Kolkata, which started in July, has already seen around 250,000 completed trips, 365,000 registered users, 18,600 registered driver partners, and around Rs 7 crore in driver earnings.

ONDC has already started ride-hailing services in the south, in cities like Bengaluru, Mysuru, and Kochi, and is now looking to expand to cities in other parts of the country.

In Bengaluru, the mobility vertical of the network is already doing almost 1 lakh rides per day through the Namma Yatri app, denting the dominance of ride-hailing majors such as Ola and Uber. After one year of operations, the app has seen more than 10 million trips completed, over Rs 150 crore in driver earnings, almost 2 million registered users, and 95,000 registered drivers.

Pan-India disruption

The network is gearing up to hit 200,000 transactions a day by the end of the 2023, from the current high of 160,000 transactions, and the government is also working to bring financial products to ONDC in the next couple of months.

For its next phase of growth, ONDC has multiple strategies in place. For example, to popularise the network in tier 2 and 3 cities and beyond, it has started an online educational course for merchants that will be disseminated in 14 to 18 languages. Additionally, state broadcaster Doordarshan will soon begin regular programming to educate buyers and sellers about ONDC across the country.

Backed by the government, ONDC seeks to prevent the dominance of a few large platforms, such as Amazon, Flipkart, Swiggy, and Zomato, in the e-commerce and food delivery sectors.

The government hopes to boost e-commerce penetration in the country to 25 percent over the next two years, reaching 900 million buyers and 1.2 million sellers through the network. It is projected to generate a gross merchandise value of $48 billion.

ONDC is banking on three key pillars to reduce the cost of doing business for everyone, including retailers: dynamic pricing, inventory management, and delivery cost optimisation.