ONDC expansion on the cards: The Indian government has asked that e-commerce giants Amazon and Flipkart integrate the Open Network for Digital Commerce (ONDC) into their platforms by featuring ONDC storefronts on their respective home pages. According to executives familiar with the matter, this move is intended to support the government-backed network in expanding its operations and improving delivery capabilities.
The executives explained that the primary objectives are to enhance ONDC's operational efficiency, increase order fulfillment rates, and address any issues related to glitches and delays. T Koshy , the managing director of ONDC, told ET that the network is, "in active discussion with Amazon and Flipkart for a phased participation and that results could be expected soon."
Both Amazon and Flipkart have not yet provided any official comments on the matter. This development holds particular significance, as ONDC, which commenced operations in January 2022, was initially introduced as a measure to challenge the market dominance of Amazon and Flipkart in the Indian e-commerce sector.
Also Read | India’s Mission 2047: How India aims to become a developed economy - high speed expressways, electric mobility, digital payments & more
Amazon's presence in India is significant, with a vast network of over 1.1 million sellers, more than half of which are located in tier 2 towns and cities across the country.
In an announcement made in February of the previous year, Amazon revealed its intentions to integrate its extensive logistics network, encompassing all stages from pickup to delivery, as well as its SmartCommerce services, with ONDC. SmartCommerce, a software solution provided by Amazon, empowers small and medium-sized enterprises in India to establish and expand their operations across various digital platforms. "These small businesses will now be able to use it to join the ONDC network," Amazon had said.
Concurrently, Ekart, the logistics subsidiary of Flipkart, was in the advanced stages of integration with ONDC when Amazon made this announcement. In fact, Flipkart's logistics arm had already successfully joined the network.
According to sources, Amazon's initial integration with ONDC was to be limited to the last mile delivery through Amazon Transport Services, with no immediate plans to integrate Amazon India's core marketplace with the government-backed network.
Also Read | Indian Railways’ big 100-day plan: Vande Bharat sleeper, bullet train, J&K rail project with Chenab bridge & more - check details
If Amazon decides to fully integrate its core marketplace with ONDC, the company's users will gain access to a vast array of product catalogues from over 105,000 non-mobility sellers currently active on the network. This integration would provide smaller players with an opportunity to join the platform without incurring substantial commission fees or undergoing individual onboarding processes with Amazon.
ONDC has already established its presence 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.
The network has witnessed significant growth, with the number of 'countable cities' - those generating more than 100 orders per month - increasing to 622 during the January-March quarter.
ONDC is currently in talks with the National Restaurants Association of India (NRAI), a representative body for over 500,000 restaurants across the country. The discussions aim to establish seamless last-mile connectivity for food delivery services, including order tracking and discoverability, according to executives in the food services industry.
In collaboration with NRAI, ONDC has established a Champion Council, which includes prominent representatives from various segments of the restaurant industry, such as casual and fine-dine chains, quick-service restaurants, cloud kitchens, cafes, and regional players. An executive directly involved with the council stated that the objective is to ensure growth and facilitate smoother and wider participation from the sector.
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ONDC, a government-backed network that directly competes with independent food delivery aggregators like Swiggy and Zomato, has successfully integrated end-to-end services for early adopter buyer and seller platforms, including Magicpin and Paytm.
ONDC has experienced significant growth over the past 14 months, with network participants increasing from 24 to 81. The network has expanded its domain categories from three to 13, and various buyer apps, such as Paytm, Snapdeal, Magicpin, Pincode, Mystore, Rapidor, NoBrokerHood, Ola, and nStore, are generating substantial order volumes.
"Unlike the dedicated food delivery apps, ONDC has multiple options, so a concern is who drives traffic and stickiness towards restaurants," said a food services sector executive. "The larger scale has not yet been reached and will happen over time."
Since its official launch in January 2022, ONDC has processed more than 49.79 million transactions. Mobility services, primarily ride-hailing apps like Namma Yatri, account for over 50% of the total monthly orders. Between February 2022 and March 2023, mobility services generated more than 32.2 million orders, while non-mobility services accounted for more than 17.5 million orders.
During the same period, the food and beverages category recorded more than 5.78 million orders, grocery more than 1.74 million orders, fashion more than 2.64 million orders, and home and kitchen more than 1.35 million orders.
Several prominent companies and platforms have joined the network, including Wow Momo, McDonald's, and Domino's Pizza in the food and beverage sector; Marico, P&G, and Hindustan Unilever in the FMCG sector; and Namma Yatri, Kochi Open Mobility Network, and Ola in the mobility sector. Recently, large chains such as Barbeque Nation and cloud kitchen aggregator Rebel Foods, which operates Behrouz Biryani, Oven Story Pizza, and Faasos, have also onboarded ONDC.
ONDC conducted its alpha rollout in April 2022 across five cities to test live transactions with a closed group of sellers and buyers.
The executives explained that the primary objectives are to enhance ONDC's operational efficiency, increase order fulfillment rates, and address any issues related to glitches and delays. T Koshy , the managing director of ONDC, told ET that the network is, "in active discussion with Amazon and Flipkart for a phased participation and that results could be expected soon."
Both Amazon and Flipkart have not yet provided any official comments on the matter. This development holds particular significance, as ONDC, which commenced operations in January 2022, was initially introduced as a measure to challenge the market dominance of Amazon and Flipkart in the Indian e-commerce sector.
Also Read | India’s Mission 2047: How India aims to become a developed economy - high speed expressways, electric mobility, digital payments & more
Amazon's presence in India is significant, with a vast network of over 1.1 million sellers, more than half of which are located in tier 2 towns and cities across the country.
In an announcement made in February of the previous year, Amazon revealed its intentions to integrate its extensive logistics network, encompassing all stages from pickup to delivery, as well as its SmartCommerce services, with ONDC. SmartCommerce, a software solution provided by Amazon, empowers small and medium-sized enterprises in India to establish and expand their operations across various digital platforms. "These small businesses will now be able to use it to join the ONDC network," Amazon had said.
Concurrently, Ekart, the logistics subsidiary of Flipkart, was in the advanced stages of integration with ONDC when Amazon made this announcement. In fact, Flipkart's logistics arm had already successfully joined the network.
According to sources, Amazon's initial integration with ONDC was to be limited to the last mile delivery through Amazon Transport Services, with no immediate plans to integrate Amazon India's core marketplace with the government-backed network.
Also Read | Indian Railways’ big 100-day plan: Vande Bharat sleeper, bullet train, J&K rail project with Chenab bridge & more - check details
If Amazon decides to fully integrate its core marketplace with ONDC, the company's users will gain access to a vast array of product catalogues from over 105,000 non-mobility sellers currently active on the network. This integration would provide smaller players with an opportunity to join the platform without incurring substantial commission fees or undergoing individual onboarding processes with Amazon.
ONDC has already established its presence 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.
The network has witnessed significant growth, with the number of 'countable cities' - those generating more than 100 orders per month - increasing to 622 during the January-March quarter.
ONDC is currently in talks with the National Restaurants Association of India (NRAI), a representative body for over 500,000 restaurants across the country. The discussions aim to establish seamless last-mile connectivity for food delivery services, including order tracking and discoverability, according to executives in the food services industry.
In collaboration with NRAI, ONDC has established a Champion Council, which includes prominent representatives from various segments of the restaurant industry, such as casual and fine-dine chains, quick-service restaurants, cloud kitchens, cafes, and regional players. An executive directly involved with the council stated that the objective is to ensure growth and facilitate smoother and wider participation from the sector.
Also Read | Mini-Goldilocks moment! Why Motilal Oswal thinks India is big, bold and blazing
ONDC, a government-backed network that directly competes with independent food delivery aggregators like Swiggy and Zomato, has successfully integrated end-to-end services for early adopter buyer and seller platforms, including Magicpin and Paytm.
ONDC has experienced significant growth over the past 14 months, with network participants increasing from 24 to 81. The network has expanded its domain categories from three to 13, and various buyer apps, such as Paytm, Snapdeal, Magicpin, Pincode, Mystore, Rapidor, NoBrokerHood, Ola, and nStore, are generating substantial order volumes.
"Unlike the dedicated food delivery apps, ONDC has multiple options, so a concern is who drives traffic and stickiness towards restaurants," said a food services sector executive. "The larger scale has not yet been reached and will happen over time."
Since its official launch in January 2022, ONDC has processed more than 49.79 million transactions. Mobility services, primarily ride-hailing apps like Namma Yatri, account for over 50% of the total monthly orders. Between February 2022 and March 2023, mobility services generated more than 32.2 million orders, while non-mobility services accounted for more than 17.5 million orders.
During the same period, the food and beverages category recorded more than 5.78 million orders, grocery more than 1.74 million orders, fashion more than 2.64 million orders, and home and kitchen more than 1.35 million orders.
Several prominent companies and platforms have joined the network, including Wow Momo, McDonald's, and Domino's Pizza in the food and beverage sector; Marico, P&G, and Hindustan Unilever in the FMCG sector; and Namma Yatri, Kochi Open Mobility Network, and Ola in the mobility sector. Recently, large chains such as Barbeque Nation and cloud kitchen aggregator Rebel Foods, which operates Behrouz Biryani, Oven Story Pizza, and Faasos, have also onboarded ONDC.
ONDC conducted its alpha rollout in April 2022 across five cities to test live transactions with a closed group of sellers and buyers.
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