PhonePe's Pincode will only sell food and grocery via ONDC, exits fashion and electronics categories

Pincode

Pincode, the e-commerce app by fintech major PhonePe on the Open Network for Digital Commerce (ONDC), is exiting categories like fashion and electronics to focus on hyperlocal and high-frequency segments such as food and grocery, people familiar with the matter said.

PhonePe, however, will continue to operate in the travel ticketing segment on ONDC through its main app.

"PhonePe has decided to stick to groceries, food on Pincode and the travel and transit will happen through PhonePe app. The idea is to do physical goods via Pincode and digital via PhonePe app," said a source close to the developments.

Pincode has also been building its seller app and has started onboarding sellers.

"The seller app was in the works for some time now and it is live presently. PhonePe will continue to focus on hyper-local delivery for groceries and food category," the person quoted above said.

In April 2023, PhonePe launched Pincode as part of the ONDC framework. The aim was to strengthen its e-commerce forays, three months after Flipkart completed full ownership separation of the payments startup.

Pincode had earlier said it was completing 5,000 orders a day which was far behind Magicpin which claims to be fulfilling 30,000 daily orders and is the largest seller app on ONDC.

Economic Times earlier reported the company's plans to exit fashion and electronics categories

Also Read: PhonePe's ONDC app Pincode expands to nine more cities after Bengaluru

The app entered key cities such as Mumbai, Delhi, Noida, Gurugram, Chennai and Hyderabad and had said that services will also be available in Ahmedabad, Pune, and Kolkata.

The development comes when multiple tech unicorns, such as Ola, Meesho and Shiprocket, have taken a bet on the government-backed ONDC that is aimed at breaking the stranglehold of a few players like Amazon, Flipkart, Zomato and Swiggy on online retail in the country.

Meanwhile, the volume of monthly retail purchases on the ONDC has grown six times in the last six months to hit 3.6 million in March, compared to over 600,000 in September last year, according to people close to the developments.

The total number of transactions on the network in March reached 7.7 million, which includes 4.1 million ride-hailing bookings on the Namma Yatri app. In contrast to retail purchases, monthly ride-hailing has grown only 1.5 times in the last six months — from 2.7 million in September.

The large share of retail purchases in the total monthly transactions stands in stark contrast to early 2023, when it accounted for only 5-10 percent, with the mobility category dominating with 90-95 percent of all transactions.