ONDC hits 150,000 daily retail orders, lowers incentives for funding discounts

In the latest version of the scheme, which is set to be in operation from May 1 to June 30, the network will continue a growth kicker it had introduced in February.

Just as the Open Network for Digital Commerce (ONDC) completed a week of 150,000 daily retail orders on average for the first time, the government-backed network has restructured the way it funds discounts for purchases.

Three changes stand out in the new version of the incentive scheme — payouts per order on all categories of orders have been decreased by up to 30 percent, only top 20 cities will get incentives for food & beverage orders, and only a certain percentage of a buyer side app's orders will be eligible for the network's largesse.

“The network did 150,000 retail orders per day on an average last week. The demand had eased out a little bit in the first week of April, but came back on track over the past couple of weeks. This month’s aggregate numbers might just be a little over the last month’s,” said a source in the know.

Moneycontrol reported earlier that the volume of monthly retail purchases on the ONDC grew six times in six months to hit 3.6 million in March, compared to over 600,000 in September last year.

The incentive scheme has been restructured to send a message that network participants like buyer apps, seller apps and sellers themselves have to gradually bear a greater burden of funding deals and discounts for customers, according to a second source.

“Another important feature of the new incentive structure is additional support for seller apps who have been live on the network, but have not received any orders in the preceding three months,” he added.

Interestingly, an e-mail sent by ONDC to network players has renamed what was earlier called ‘incentive’ scheme to ‘market intervention program’ from the new version onwards.

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

In the latest version of the scheme, which is set to be in operation from May 1 to June 30, the network will continue a growth kicker it had introduced in February.

Earlier, buyer side platforms on the network would get an incentive per order on the basis of the total volume of transactions during the past week. Since February, ONDC has introduced a growth ‘multiplier’ on top — which means a platform can get more money on the basis of their week-on-week rate of growth.

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.

ONDC is operational in 588 “countable cities”, which are the cities or districts with more than 100 orders a month in the last 3 months. This is approximately 70 percent of cities in India. The platform has fulfilled transactions in over 800 cities in India.

In January, ONDC successfully tested a couple of transactions for personal loans with Easypay and DMI Finance. With the technology being tested and optimised, other finserv participants are scheduled to go live over the next few weeks.

Within the financial services space, ONDC is building the infrastructure for three broad segments — credit, insurance and wealth management.

Its online dashboard shows that financial services players such as Aditya Birla Capital, Tata Capital, Canara Bank, Kotak Mahindra Bank, Bajaj Finserv, Bajaj Allianz, Aditya Birla Health, etc are in various stages of integration with the network.

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.