ONDC retail orders hit fresh peak of 30,000 despite lower spends on incentives

ONDC has told network participants to get ready for a new initiative called Super Saver Sunday from June 18, which coincides with father’s day, to drive up demand on the network.

The number of retail orders on Open Network for Digital Commerce (ONDC) hit a fresh high of 30,000 last weekend, even though the government-backed network has substantially reduced its spending on incentives for consumers and network players in the previous few weeks, according to people in the know. At present, retail orders mostly consist of the food & beverages category and a small volume of grocery.

“As ONDC has restructured its incentive schemes and brought down its subsidy payout per order, various buyer apps and seller apps like Paytm, Magicpin and others have begun working together to figure out how to give their own marketing push and discounts to generate demand,” said an industry source.

“Typically, the network players raise the level of discounts on weekends to attract new users. This helps in pushing up the average number of daily retail orders in the following week… Also, ONDC has been pushing network participants to do more to be able to achieve the goal of 100,000 daily retail orders,” he added.

ONDC and Paytm have not responded to Moneycontrol’s queries on the matter till the time of publishing. The story will be updated if they respond. Magicpin declined to comment.

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In the past few weeks, the number of daily retail orders have hovered around the 9,000-10,000 levels as discounts on the network sharply declined. The previous peak was achieved on May 8 when it had crossed the 25,000-mark for the first time.

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 capped at a total of 30 orders in total.

'Limited support'

Also, the maximum incentive spend per order has been capped at Rs 100, from around Rs 125 earlier. Importantly, all prices included, overall discounts should not exceed 50 percent of the total order value.

"As ONDC is a completely new idea established very recently, we provide limited support for a period of time to the network participants to give a jump start to the network. In this line, we are helping network participants like seller and buyer apps with incentives up to a certain level for activities like seller onboarding and transaction stimulation,” ONDC chief T Koshy had told Moneycontrol last month.

At the height of the high incentive regime of ONDC, we had reported prices of food items on ONDC were anywhere between 5 percent and 25 percent cheaper than on food delivery platforms Zomato and Swiggy. It had sparked off a debate on whether ONDC would disrupt the duopoly of the two venture-funded unicorns.

According to a second source, Zomato-backed Magicpin itself has scaled up to being a touchpoint for 30,000 orders a day on the network through its multiple roles as a technology service provider to buyer apps, logistics aggregator, and being both a buyer and seller-side platform on the network.

Disruptor

Meanwhile, ONDC has told network participants to get ready for a new initiative called Super Saver Sunday from June 18, which coincides with father’s day, to drive up demand on the network.

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

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 and reaching a gross merchandise value of $48 billion.