July 31, 2023
In an impressive display of growth and success, the Open Network for Digital Commerce (ONDC) has achieved significant milestones by selling 10,000 kilos of tomatoes in Delhi within a week. Furthermore, the government-backed interoperable network has crossed a staggering 1.1 million cumulative retail orders since its inception last year.
The ONDC initiative was launched in response to the soaring tomato prices across the country, aiming to make this essential vegetable accessible at affordable rates. Under the guidance of the National Cooperative Consumer Federation (NCCF) and NAFED, the network continuously procured tomatoes from key agricultural centers such as Andhra Pradesh, Karnataka, and Maharashtra, subsequently making them available at reasonable prices in major consuming regions like Delhi-NCR, Bihar, and Rajasthan.
T. Koshy, Chief of ONDC, revealed that the initiative has been well-received, with 2,000 kilograms of tomatoes being allocated daily in Delhi, which were selling out by the afternoon. This enthusiastic response prompted ONDC to run the tomato initiative for at least one more week, delivering orders without any delivery fees. To accommodate as many users as possible, the network has limited the number of orders per user to one per week.
The ONDC chief also disclosed that the network’s daily order volume has been steadily rising as more sellers join the platform. A notable example includes a farmer producer organization that sells honey through ONDC, which has already witnessed orders worth Rs 1 lakh being placed. This growing seller base has resulted in orders being placed from as many as 320 cities, including several Tier 2 and Tier 3 locations, indicating a wider dispersion of orders compared to previous periods.
The data for July 9 revealed a new record of 35,000 daily retail orders, with Delhi-NCR surpassing Bengaluru in order volume. While Delhi-NCR accounted for around 11,000 orders on July 30, Bengaluru contributed more than 7,000 orders to the overall count. The next leading cities in terms of order numbers were Mumbai, Hyderabad, and Pune, each recording order volumes in the range of 2,500 to 3,000.
Retail orders on ONDC encompass a variety of products, including food and grocery items, with the former dominating the majority of orders on the government-backed network.
Looking to the future, ONDC is aiming to hit an ambitious target of 200,000 transactions per day by the end of the year. The government is also working towards introducing financial products on the platform within the next couple of months, enhancing the overall user experience.
ONDC was established to address concerns about the dominance of a few large platforms, such as Amazon, Flipkart, Swiggy, and Zomato, in the e-commerce and food delivery sectors. As the initiative gained momentum, it faced scrutiny for its discounting regime, which was later revised to ensure sustainability.
With a revised incentive scheme in place since June 1, buyers can now avail discounts for a maximum of five transactions per month, as opposed to the previous limit of three orders per day. This has led to substantial growth in the last one-and-a-half months, aided by discounting schemes from network participants like Paytm, PhonePe, Magicpin, and certain sellers.
The Indian government envisions increasing e-commerce penetration in the country to 25 percent in the next two years, reaching 900 million buyers and 1.2 million sellers through the ONDC network. With its focus on dynamic pricing, inventory management, and delivery cost optimization, ONDC seeks to reduce the cost of doing business for all retailers and create a level playing field in the marketplace.
