Festive cheer: ONDC hikes monthly incentive payout by 50% to each network player in October

ONDC has been giving financial incentives to network players depending on order volumes and categories

Ahead of the festive season starting in October, the Open Network for Digital Commerce (ONDC) has informed network participants via a memo that the maximum incentive limit they can claim for the current month has been raised to Rs 60 lakh.

This is a jump of nearly 50 percent month-on-month, aimed at boosting demand and accelerating adoption.

"The monthly limit for the cumulative (across all programs) financial assistance requested by any network participant will be Rs 60,00,000 for October 2024. This limit will be applied including all programs and schemes run by ONDC for the month of October," ONDC said in the memo to network players. Moneycontrol has seen a copy of the same.

The move to increase the incentive payout also comes after the network recorded a slightly slower growth of 5 percent month-on-month in transactions in August to 12.58 million, compared to a 21 percent surge in July.

Also Read: ONDC's growth slows to 5% in August amid reduction of cash incentives

This further whittled to a 3.2 percent month-on-month growth in transactions in September to 12.90 million, compared to a 5 percent surge in August. Out of this, 5 million transactions came from the mobility segment and around 7.9 million from non-mobility category.

“This is purely for the festive season, but overall ONDC’s strategy has been to bring down the incentives. Post the festive season the incentives might go back to Rs 40 lakh,” an industry source told Moneycontrol.

While on a month-on-month basis, the incentive has gone up, compared to the August incentive payout, there is still a reduction of nearly 76 percent from Rs 2.5 crore.

Previously, ONDC announced that it was cutting its maximum payout per player to Rs 2.5 crore from Rs 3 crore per month till September end. Yet, it has changed that now to Rs 60 lakh.

ONDC has been giving financial incentives to network players depending on order volumes and categories. This money is in turn used to fund discounts and offers for customers to promote rapid adoption of the government-backed network.

ONDC’s shift to reducing incentives is aimed at conserving cash, especially to offer discounts during the festive season.

Another important change in the incentive payout rules since last month is that the financial assistance will be provided only on orders placed between different Buyer network participants and Seller network participants.

“If network participants are driving their own demand then the incentives are not offered. It is offered only to participants who have different buyer nps and seller nps,” another source said.
Incentives for logistics sellers

ONDC has also offered an incentive for logistics seller network participants which will include the likes of MagicFleet, Ola and others.

“Logistics Seller NPs can request a payout of upto Rs 15 per successfully delivered order through on-network logistics, subject to a maximum of Rs 60,00,000 per month,” the memo said.

However, logistics seller NPs who have crossed the scale of 3 lakh orders in any previous month will not qualify for financial assistance under this program.

Over the past year-and-a-half, multiple new-age companies such as Paytm, Ola, PhonePe, Meesho, Magicpin and Shiprocket have taken to ONDC, aimed at breaking the stranglehold of a few players such as Amazon, Flipkart, Zomato and Swiggy on online retail in the country.

With ONDC, the government hopes to increase e-commerce penetration in the country to 25 percent in the next couple of years, reaching a gross merchandise value of $48 billion.