The Centre has instructed Amazon and Flipkart to establish storefronts for the Open Network for Digital Commerce (ONDC) on their home pages, according to executives familiar with the matter. This directive aims to enhance the scalability of operations for the government-backed network and improve assistance in deliveries. They emphasized that the goal is to boost operational efficiency and address any glitches and delays on ONDC.
T. Koshy, the managing director of ONDC, stated that the network is “actively engaging in discussions with Amazon and Flipkart regarding phased participation, with anticipated results forthcoming soon.”
Queries directed to Amazon and Flipkart went unanswered.
This development holds significance as ONDC, initiated in January last year, was positioned as a strategic effort to challenge the dominance of Amazon and Flipkart.
Continue Exploring: Govt-backed ONDC sees rapid adoption, CEO T. Koshy expects tenfold merchant growth in coming year
In India, Amazon boasts a seller base exceeding 1.1 million, with over 50% hailing from tier 2 towns and cities.
In February of last year, Amazon revealed its initiative to integrate its logistics network, covering pickup to delivery, and SmartCommerce services with ONDC. SmartCommerce, Amazon’s software solution, empowers small and medium-sized businesses in India to expand their operations across digital platforms. Amazon stated that these small businesses would now have the capability to leverage it to join the ONDC network.
At that time, Flipkart’s logistics subsidiary Ekart was in the advanced stages of integration with ONDC. The logistics division of Flipkart had already become part of the network.
Sources had indicated at the time that Amazon wouldn’t fully integrate Amazon Transport Services, and only the last mile would be linked with ONDC. They had mentioned that there were no immediate plans to integrate Amazon India’s core marketplace with ONDC.
Should Amazon’s core marketplace become integrated with ONDC, users of the US e-commerce giant will gain access to product catalogues from over 105,000 non-mobility sellers currently active on the government-supported network. This integration facilitates the onboarding process for smaller players, eliminating the need for hefty commissions and individual onboarding procedures with Amazon.
ONDC is currently operational across various sectors, including grocery and fast-moving consumer goods, food and beverage, ride-hailing, agriculture products, fashion and apparel, health and wellness, beauty and personal care, electronics and appliances, home and kitchen, business-to-business transactions, exports, metro ticketing, and financial products. During the January-March period, the number of cities or districts, termed ‘countable cities’ by the network, generating over 100 orders per month increased to 622.
Food services executives mentioned that ONDC is engaged in discussions with the National Restaurants Association of India (NRAI), an organization representing over 500,000 restaurants. The aim is to establish seamless last-mile connectivity for food delivery, order tracking, and enhancing discoverability.
An executive closely involved with the organization mentioned that ONDC, in collaboration with NRAI, has established a Champion Council. This council includes notable representatives from casual and fine-dining chains, quick-service restaurants, cloud kitchens, cafes, and regional players. The objective is to facilitate sectoral growth and encourage broader and smoother participation.
Continue Exploring: ONDC surpasses 7.1 Million orders milestone in February since inception last year
The government-supported network, directly competing with independent food delivery aggregators Swiggy and Zomato, has incorporated end-to-end services for pioneer buyer and seller platforms like Magicpin and Paytm.
In the past 14 months, network participants have surged from 24 to 81. Initially launched with three domain categories, the network now operates across 13. Buyer apps driving significant order volumes include Paytm, Snapdeal, Magicpin, Pincode, Mystore, Rapidor, NoBrokerHood, Ola, and nStore.
“An issue is who drives traffic & stickiness towards restaurants, as ONDC has multiple options, unlike the dedicated food delivery apps,” a food services industry official stated. “The larger scale hasn’t yet been reached & will happen over time.”
Since its official launch in January last year, ONDC has facilitated over 49.79 million transactions. Mobility, spearheaded by ride-hailing apps like Namma Yatri, remains the predominant force, constituting over 50% of total monthly orders. Between February last year and March this year, mobility accounted for more than 32.2 million orders, while non-mobility contributed to over 17.5 million orders.
During the corresponding period, food and beverages accounted for over 5.78 million orders, while grocery orders surpassed 1.74 million. Fashion transactions exceeded 2.64 million, and home and kitchen items totaled more than 1.35 million orders.
The roster of onboarded companies and platforms includes Wow Momo, McDonald’s, and Domino’s Pizza in the food and beverage sector; Marico, P&G, and Hindustan Unilever in FMCG; and Namma Yatri, Kochi Open Mobility Network, and Ola in mobility.
In recent months, Barbeque Nation and cloud kitchen aggregator Rebel Foods, known for operating brands such as Behrouz Biryani, Oven Story Pizza, and Faasos, have joined ONDC.
In April 2022, ONDC initiated its alpha rollout across five cities, conducting live transactions with a select group of sellers and buyers for testing purposes.
Continue Exploring: Rebel Foods joins ONDC to expand D2C presence and enhance consumer reach
