ONDC’s jaw-dropping discounts on food delivery have caught the attention of foodies across India. What does this mean for established players like Swiggy and Zomato?
” Order food online on Zomato! ” or ” Swiggy karo, phir jo chahe karo! ” These catchy titles have successfully lured food lovers to order from popular delivery apps. And let’s face it! When hunger strikes, we just can’t resist clicking on the “ Bhook lagi hai? ” notification to order food.
However, did you know these food delivery giants charge hefty commissions from restaurants when you order from them? But now, there’s a new player in town that’s shaking things up by offering massive discounts of up to 50-60%.
Introducing ONDC or Open Network for Digital Commerce, the government-backed online food delivery platform that’s causing quite a stir in the industry. People are sharing screenshots of ONDC’s prices on social media, which are significantly lower than its competitors.
This has sparked a debate about whether ONDC can pose a real threat to established food delivery startups.
What’s Happening?
In recent years, India’s online food delivery space has grown unprecedentedly, with Zomato and Swiggy emerging as the top players in the market. However, the entry of ONDC has created a stir and raised questions about whether it can disrupt the power balance of the established players.
What exactly is ONDC? Established by the Department for Promotion of Industry and Internal Trade (DPIIT), ONDC is a non-profit platform launched in September 2022 as an alternative to online shopping. It’s not an app but a simple platform that’s ready to transform digital commerce. Customers need to use the Paytm, PhonePe or Magicpin apps to order food.
Unlike Zomato and Swiggy, ONDC does not have in-house delivery partners. Instead, it outsources delivery through third-party providers like eCart, Dunzo, and Delhivery.
With ONDC offering a range of options and a unique business model, it’ll be interesting to see how it shakes up the market in the coming years.
Why is ONDC Affordable?
ONDC is able to offer food at significantly cheaper rates compared to Swiggy and Zomato due to its business model. While the latter two charge around 30-40% commission from customers, ONDC only charges 3-4% commission.
ONDC eliminates the middlemen involved in the traditional online food delivery model. As a result, there are no platform fees or commissions, and customers pay directly to the vendor without any intermediaries.
Moreover, ONDC does not charge any delivery fees to the customers, which further reduces the overall cost of ordering food online. As per media reports, as of March 2023, ONDC is currently active in 180 cities and makes over 10,000 deliveries daily.
What’s Next?
ONDC has been making waves in the online food delivery space with its significantly cheaper prices compared to competitors like Zomato and Swiggy. However, the platform also faces its own challenges, such as a lack of sales for vendors and limited choices for customers. According to CNBC TV18, one major challenge is building trust with customers, as established players like Swiggy and Zomato have a proven track record of resolving customer issues.
Also, according to brokerage firm Motilal Oswal, ONDC is not a major threat to Zomato or Swiggy at the moment.
However, ONDC’s unique model and government backing make it a potential disruptor in the e-commerce industry as a whole.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*The article is for information only. This is not investment advice.
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