ONDC posts record 35,000 retail orders in a day, Delhi-NCR pips Bengaluru in volume

The network is gearing up to hit 200,000 retail and mobility transactions a day by the end of the year. (Pic by Muneeb Syed_unsplash)

Open Network for Digital Commerce (ONDC) crossed a fresh daily retail orders peak of 35,000 on July 9, even as Delhi-NCR beat Bengaluru in terms of order volume, according to people in the know. While Delhi-NCR accounted for around 11,000 orders on Sunday, Bengaluru contributed more than 7,000 orders to the number.

The next three cities in terms of order numbers were Mumbai, Hyderabad and Pune, logging order volumes in the range of 2,500-3,000 each. Retail orders include food and grocery, with the former accounting for the lion’s share of orders on the government-backed interoperable network as yet.

ONDC did not respond to Moneycontrol’s queries on the order volumes.

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The network is gearing up to hit 200,000 transactions a day by the end of the year, the interoperable network's chief executive officer T Koshy said at the Moneycontrol Startup Conclave last week. Koshy also said that ONDC is working to bring financial products to the network, and this is expected to happen in the next couple of months.

In the first week of May, when ONDC had crossed the daily order threshold of 10,000 for the first time, the distribution was more skewed with Bengaluru accounting for around 40 percent of the orders, and top metros like Delhi, Mumbai and Kolkata contributing the same share cumulatively.

After a couple of months of fast-paced growth that saw daily order volumes rise from 200 in March to 25,000 in the second week of May, the network saw the surge tempered down as it substantially reduced discounts to consumers and incentives to network participants.

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

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At the time, ONDC had received some flak from industry watchers and analysts as they thought that the discounting regime was unsustainable in the long run, especially for a government-backed endeavour that sought to create a level playing field for all buyers and sellers.

Since the revised incentive scheme came into effect on June 1, a buyer is now eligible for discounts for a maximum of five transactions per month. Earlier buyers could avail discounts on three orders per day, but it was subsequently capped at a total of 30 orders in total.

After the change in the discounting regime funded by ONDC, the growth in the last one and half months has been significantly aided by discounting schemes floated by network participants such as Paytm, PhonePe, Magicpin, and even some sellers, according to people in the know.

With the network, the government hopes to increase e-commerce penetration in the country to 25 percent in 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.