ONDC sells 10,000 kilos of tomato in Delhi in a week; crosses 1.1 million retail orders

On the Centre’s direction earlier this month, NCCF and NAFED started selling tomatoes at Rs 70 per kilogram after the prices of the vegetable skyrocketed in various parts of the country

Six days into offering tomatoes at Rs 70 per kg, ONDC claims to have enabled purchases of 10,000 kilos of the vegetable in the national capital. Additionally, the network has also crossed the milestone of 1.1 million retail orders cumulatively since its inception last year, as well as 5.4 million mobility transactions.

“Last week, we had an allocation of 2,000 kg of tomato every day (1,000 orders) in Delhi from the National Cooperative Consumer Federation (NCCF), which was getting sold out by afternoon,” ONDC chief T Koshy told Moneycontrol.

On the Centre’s direction earlier this month, NCCF and NAFED started selling tomatoes at Rs 70 per kg after the prices of the vegetable skyrocketed in various parts of the country. Since then, the two organisations have been continuously procuring tomatoes from ‘mandis’ in Andhra Pradesh, Karnataka and Maharashtra and making the same available at affordable prices in major consuming centres such as Delhi-NCR, Bihar, Rajasthan, etc.

“The plan is to run the initiative on ONDC for at least one more week. The tomato orders will continue to be delivered with zero delivery fees. However, we have restricted the number of orders per user to one each week. We want the maximum number of people to try out ONDC through this initiative,” Koshy said.

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The ONDC chief also said that the average number of daily orders on the network has been rising steadily as more sellers join the network. For example, a farmer producer organisation selling honey on ONDC has already seen Rs 1 lakh worth of orders being placed.

“We can see now that retail orders are being placed from as many as 320 cities, a lot of which are Tier 2, 3 and beyond. As such, we are seeing a greater dispersal of orders than before,” he said.

Steady increase

ONDC crossed a fresh daily retail order 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 July 30, 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.

The network is gearing up to hit 200,000 transactions a day by the end of the year and the government is also working to bring financial products to ONDC 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, distribution was more skewed with Bengaluru accounting for around 40 percent of the orders, and top metros 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 a surge temper as it reduced discounts to consumers and incentives to network participants substantially.

Widening ecommerce

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.

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 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 this was subsequently capped at 30 in total.

After the change in the discounting regime, growth in the last one-and-a-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.

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.