Machibet BetWhat is ONDC and can it take on Amazon, Swiggy and Zomato?

It’s the homegrown, government-backed alternative to Swiggy, Zomato, Amazon and Flipkart. It’s not an app but it can give delivery apps a run for their money. And it’s intended to ensure that small merchants don’t get short-changed by multinational delivery platforms. We are talking about ONDC – Open Network for Digital Commerce – backed by the government of India. Over the past week or so, there’s been quite a buzz on social media as users tom-tommed the low prices they found on ONDC as compared with the regular delivery apps. This could be India’s Unified Interface (UPI) moment in the delivery arena, claimed many. Is that the case? Here’s what we do know about ONDC and what it is doing – and what it has the potential to do. medium100182903Is ONDC an app?Contrary to what we’d expect, ONDC is not an app that will fight other apps. It is a platform, a service that helps connect digital businesses with customers; it is also a service that helps digitalise businesses. So, what exactly does that mean? If you’re a consumer, it means you can buy from multiple services from the ONDC site. At the moment, in Chennai for instance, you can buy from Paytm, MagicPin, Craftsvilla, MyStore, Meesho, Pincode and Spice Money. You can transact on any of these stores as you would on any other online shopping platform.So, is ONDC an online shopping aggregator? Why is that such a big deal?Shopping is only one part of what ONDC is. The network aims to go beyond retail e-commerce and connect companies in areas such as mobility, food delivery, hotel booking and travel, among others.The brainchild of the ministry of commerce and industry's Department for Promotion of Industry and Internal Trade (DPIIT), the platform intends to open up new opportunities, reduce digital monopolies, and empower micro, small, and medium businesses, as well as small traders, by bringing them online. !function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r=0;r How exactly does this work?At the moment, ONDC functions as a digital mall, where you have multiple stores from where you can buy various products. Let’s look at food, which is by far the most talked about service on ONDC. All you need to do is get on to the ONDC website, navigate to one of the shops, say Paytm, and place your order. (You can also look for ONDC offerings on the Paytm app.) The order is routed through Paytm to the restaurant, which then uses their own delivery people to deliver to you. That’s unlike Zomato or Swiggy, which have their own delivery executives.So far, simple. It’s when it comes to pricing and discounts and delivery fees that ONDC makes a huge difference. Most of what we see on social media is about how cheap it is to order food on ONDC compared with ordering on Zomato or Swiggy. That may not always be the case, because we tried comparing. In Chennai, we tried ordering the same dish from the same restaurant on Zomato and ONDC. ONDC actually works out a tad more expensive.Here’s ONDC: medium nocaption100180785And here’s Zomato: medium nocaption100180801Then why are so many people saying ONDC is way cheaper than the existing food delivery apps? That’s because ONDC offered deep discounts and no delivery charges as part of its inaugural offer. Here’s one explanation of ONDC’s pricing mechanism: Here, the user explains how ONDC’s pricing worked – in the early days. “Rs 50 incentive to be passed on to the users on orders of Rs 100+. The incentive is processed by the buyer side platforms like Paytm, PhonePe’s Pincode, mymagicpin etc, for which the ONDC [read, government] reimburses them.”How long will ONDC’s discounts and freebies last?Not very long, according to many reports. Per this report, “In a recent communication to seller-side applications on the network, ONDC has clarified that the incentives for subsidising delivery cost for buyers will now be capped. The new cap came into effect from May 9.”What does this mean? Simply that Zomato, Swiggy and the ONDC sellers will now compete on a more level-playing field. ONDC has also removed the stipulation that sellers offer free hyperlocal delivery, so that cost could get added on. It’s already playing out; as we’ve found, there are some orders that work out more expensive on ONDC. medium nocaption99946845 If a price-conscious market abandons ONDC, what happens?The short answer is that very little will change. Recently, brokerage firm Motilal Oswal said that ONDC would not be a huge challenge to Zomato unless the government-backed platform scales up significantly. But here’s the thing. ONDC doesn’t really intend to be another food or grocery delivery service.While as consumers we know ONDC as a shopping platform, the network is intended to be much more. It’s a service that intends to connect or digitalise businesses with customers and be accessible and inclusive when it comes to sellers – small and medium enterprises and local businesses. According to the Confederation of All India Traders, which represents 80mn small businesses, ONDC aims to reach millions of small businesses that typically lack technical expertise, necessitating a large-scale awareness drive by the government to bring them on board.Sure, these sellers can register on existing e-commerce platforms as well, but they are often tied down by restrictive service level agreements. With ONDC, the platform gives sellers the freedom to negotiate prices with logistics providers.Corporate India is clearly seeing potential in this ambitious idea. Ekart, Flipkart's logistics arm, and Dunzo, backed by Reliance Retail, have already partnered with ONDC to provide logistics services. Google is in active discussions and is “exploring” ways to partner with ONDC. So, even after deep discounts and free delivery stops, it’s possible that ONDC will attract both buyers and sellers because of the kind of platform and services that it aims to provide.