India’s food delivery market had long thought to have settled into a comfortable duopoly between Zomato and Swiggy, but a third player is slowly beginning to make its presence felt.
ONDC now accounts for 3 percent of food delivery orders in India, ET reports. “Nationwide, ONDC now facilitates 60,000 orders per day in the food domain, capturing 3% of the total order volumes managed by Swiggy and Zomato across India individually, which receive 20 lakh orders each,” a source said. ONDC, or the Open Network for Digital Commerce, is a platform backed by the Indian government that allows different entities on e-commerce value chains operate without needing a centralized platform like Zomato or Swiggy.
“We conducted a quick analysis to evaluate ONDC’s current standing as compared to various major platforms in its operational domains, from various datasets received from market intelligence and inputs,” the people cited earlier said. ONDC seems to be even more competitive in bigger cities like Bengaluru than its national trends suggest. “On July 7, 2024, ONDC set a new record with an impressive 38,000 orders per day in Bengaluru’s food domain. This represents 17% of the daily order volumes of Swiggy and Zomato individually in the city when they each received 220,000 orders,” they added.
This is remarkable progress for ONDC, which had piloted operations in late 2022 in Bengaluru. In its first phase, ONDC had allowed customers to make purchases of groceries and other goods through approved ONDC apps, but over the last year, the service had expanded to include restaurants and food delivery as well. ONDC had debuted by offering discounts that were better than those on Zomato and Swiggy, and created lots of buzz around the service last year. It now appears that it has managed to sustain some of that early momentum, and accounts for a small percentage of all food orders.
And ONDC could only go bigger from here — players like Ola, which were unable to build food businesses of their own, have tapped into the ONDC network, and are aggressively promoting food deliveries through the platform on their apps. It’s also been reported that Flipkart could soon plug into the ONDC network, and allow customers to order food on its app, and Paytm has been offering ONDC orders for over a year now.
The biggest push, however, could come from restaurants themselves, which have to pay Swiggy and Zomato high commissions for each order, but could potentially pay lower commissions on orders made on ONDC. ONDC has been designed as an open platform, much like how UPI was for payments — restaurants can list themselves on the network, while other entities handle other aspects of the order, such as payments an deliveries. ONDC has been growing slowly chiefly because of this complexity — there are many moving parts to each order, unlike with Zomato or Swiggy, in which a centralized company is in charge of the entire process. But with ONDC now managing to garner 3 percent of food delivery orders — and biggies like Flipkart being set to join the fray — ONDC could end up being a serious challenger of the Zomato-Swiggy hegemony in the coming years.