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ONDC all set to disrupt Swiggy and Zomato’s business and the entire online food delivery landscape in India

When hunger strikes at 2 am, who do you reach out to for ordering food online? Swiggy or Zomato have become buzzwords for hunger and late-night cravings. But now there’s another option — ONDC, a new player gradually gaining ground in online meal delivery. ONDC, a platform funded by the government, is all set to challenge Swiggy and Zomato’s hegemony.

What is ONDC?
ONDC stands for Open Network for Digital Commerce. The platform went live in the Beta format in September of last year and is currently available in around 180 cities. The network includes various small and large-scale e-commerce players and is designed to challenge the market dominance of prominent players such as Amazon and Flipkart in India. ONDC offers several services such as “Sell on ONDC/Create a Seller Experience,” “Create a Buyer Experience,” “Provide Software as Service,” “Provide Other Services,” and “Buy on ONDC.” Though it does not have an app for food ordering, customers can order food through partner apps like Paytm, Magicpin, and others. The platform also delivers groceries, home décor, cleaning essentials, and food.

According to a press statement issued by ONDC, its main aim is to dramatically increase e-commerce penetration in the country by enabling population-scale inclusion of all types and sizes of sellers. “By facilitating scalable and cost-effective e-commerce through the open protocol, ONDC will empower startups to grow collaboratively,” ONDC stated. The platform has already gained popularity, with transactions clocking at 10,000 orders daily. According to Nandan Nilekani, Infosys co-founder and now a member of ONDC advisory counsel, as ONDC onboards more and more customers, it has the potential to disrupt food delivery and all kinds of e-commerce in India.

There is palpable excitement on the restaurant front, too. “ONDC will change the entire ball game. Since it’s a direct link between businesses and consumers, restaurants like ours will be much relieved from the high commissions being charged so far. It will also be super convenient for restaurants and consumers to deal with any food complaints and delivery issues since the direct link will manifest a quicker response that was otherwise going through a big loop of intermediary chains. It will mainly benefit restaurants like us who are running a self-owned fleet as we can make good use of our fleet to serve customers over the ONDC platform,” says Debaditya Choudhary, managing director of the Chowman chain of restaurants. The group, which owns 29 Chowman outlets across Kolkata, Bengaluru, and Delhi NCR, is all set to onboard the platform.

How to order on ONDC?

All you have to do is go on the ONDC website and click the tab that says Shop on ONDC. Subsequently, several partner apps such as Paytm, Mystore, Pincode, and Magicpin will spring up on the screen. You can click on the partner app and select from the categories of food and groceries online. Put your address, place your order, and pay online. Or you could open the Paytm app on your phone and click on search and search for ONDC. You will see numerous stores and restaurants that you can order from. Click on the food you want, add the address, place your order, and pay online. You can even track the demand to see the status of the delivery.

Is ordering on ONDC cheaper than on Zomato & Swiggy?

ONDC has been making waves in the industry with its promise of providing cheaper food to customers. Social media is abuzz with screenshots of price differentials of food ordered from popular food-delivery platforms such as Swiggy and Zomato versus ONDC, ranging up to 60 percent. At least, for now! “I have been ordering from the platform, and it’s a much better deal than Swiggy and Zomato. The app is straightforward, and the food reaches on time,” says Bengaluru resident Sudha Iyer.

So, what makes food cheaper on ONDC compared to Swiggy and Zomato? While Swiggy and Zomato charge a 25-30 percent commission from restaurants on every order, ONDC charges only 2-4 percent. So, the lower commission makes orders through ONDC a better proposition for restaurants and ultimately cheaper for consumers. Additionally, ONDC offers a flat discount of Rs 50 while ordering. However, industry experts say it may be too early to rejoice. According to ONDC chief T Koshy, the platform “will provide limited support for some time to the network participants to give a jumpstart to the network.” This means discounting will be a short-term strategy to get users on board and get them hooked to the system. Remember, ONDC is a privately owned company that has raised over Rs 180 crore from multiple investors   such as the State Bank of India, HDFC Bank, Kotak Mahindra Bank, BSE Investments, and NSDL. So, they do have investors to answer to. The platform has now revised its discounting strategy and added some T&C after witnessing daily daily daily transactions increase from 100 to 10,000. The Rs 50 discount on Paytm is capped at 2,000 orders per day. So, if your order happens to be order number 2,001 for the day, you’ll be out of luck. Also, the Rs 75 incentive on delivery will be capped as soon as a particular restaurant makes up Rs 3,750 worth of deliveries for the day. Beyond that, you’ll see a delivery fee pop-up. So, the deep discounts we see now could slowly vanish, and prices could increase on ONDC, too.

Wait and watch

According to industry watchers, it may be too early to write off Swiggy and Zomato. While ONDC is still in its initial days, the other two giants have built a strong network and a loyal base of customers in the online food business. There have also been a few complaints regarding the ordering process on ONDC, including erroneous orders and late deliveries. Additionally, there is currently no customer service representative to connect everything because this experience is split among several businesses. Zomato and Swiggy have a massive advantage as they control the end-to-end experience.

Will ONDC be a game changer in the food delivery landscape in India? Can it disrupt the online food delivery ecosystem? Only time will tell. For now, this food tech platform is creating a storm in the e-commerce industry, just like UPI did.

Deliver the goods

Mumbai hotels have developed their online platform for food delivery — Waayu, which promises to be 15 to 20 percent cheaper than other aggregators. Waayu is founded by tech entrepreneurs Anirudha Kotgire and Mandar Lande and has the support of the Mumbai-based Indian Hotel and Restaurant Association (AHAR) and other industry bodies. It is a software as a service (SaaS) platform that connects customers with more than 1,000 Mumbai restaurants, including Bhagat Tarachand, Mahesh Lunch Home, Banana Leaf, Shiv Sagar, Guru Kripa, Kirti Mahal, Persian Darbar, Ladu Samrat. The food delivery app addresses the issues restaurants and customers face with existing online food delivery services, such as high commissions, unfair rankings, biased reviews, and poor quality and support.

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