ONDC logs 21% rise in transactions to 12 million in July

The network now connects over 630,000 sellers and service providers, spanning more than 600 cities, and delivering to over 1,200 cities nationwide.

The Open Network for Digital Commerce (ONDC) saw a 21 percent month-on-month growth in transactions in July to 12 million, compared to 9.95 million a month ago, helped by a spurt in grocery orders and on-network logistics, according to an internal note.

Out of the total, 4.4 million transactions were in the mobility category via the Namma Yatri platform and the rest 7.6 million were in the non-mobility category, which included retail purchases made by consumers and on-network logistics transactions to deliver those orders.

Grocery logged the most significant growth in the retail segment last month as it grew 61 percent from 870,000 orders in June to 1.4 million orders in July. The volume of food and beverage orders rose 21 percent month-on-month to 1.7 million. Fashion contributed 600,000 transactions in July, while the rest 4 million were spread across logistics transactions, beauty & personal care, home and kitchen, retail vouchers, etc, according to a report seen by Moneycontrol.

Until a few months back, most of the orders placed on ONDC were delivered by sellers off the network. However, this has changed rapidly as logistics services provided  on the network by companies like Ola, Loadshare, Pidge, Shadowfax contributed to 1.1 million orders in June, up from fewer than 50,000 in March.

Moneycontrol could not ascertain the number of logistics transactions included in the 7.6 million recorded for the non-mobility category in July.

The network now connects over 630,000 sellers and service providers, spanning more than 600 cities, and delivering to over 1,200 cities nationwide.

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.

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.

Amid the retail category’s fast growth, ONDC has announced a phased reduction of up to 75 percent in financial incentives for network participants by the September quarter. Network participants have also been advised against adjusting the incentive payouts against their goods and services tax calculation.

The network has been giving financial incentives to network players depending on order volumes and categories. This money is in turn used to fund discounts and offers for customers to promote rapid adoption of the government-backed network.

The new incentive structure has also reduced the maximum monthly limit of incentives that can be availed of by a player to Rs 2.5 crore from Rs 3 crore earlier. In addition, it has also designated a quarterly limit of Rs 6 crore.

In the new structure, the highest drop in incentives is for the food & beverages (F&B) and grocery categories which together make up a large share of the network’s monthly retail order volumes at present.