ONDC seems to have cheaper food deals as compared to Zomato, Swiggy
Several posts comparing the prices of food orders on ONDC and Swiggy, Zomato have been making rounds on social media in the past week.
Updated May 08, 2023, 9:07 PM IST
India’s online food delivery market is currently dominated by Zomato and Swiggy. But as per social media posts, it seems like ONDC is offering customers better deals on food delivery. How is ONDC managing to do so, and can it really disrupt the online food delivery ecosystem in India, Business Today takes a deep dive.
Social media frenzy
Several posts comparing the prices of food orders on ONDC and Swiggy, Zomato have been making rounds on social media in the past week. In most of these posts, the cost to customers on similar orders is lower via ONDC, as compared to the food delivery apps Zomato and Swiggy. In some cases, the cost to the customer is nearly half, making ONDC seem like the economical option.
Why are costs lower on ONDC?
ONDC stands for Open Network for Digital Commerce. It is a non-profit platform, designed and developed by the Indian government. As per the platform itself, it is active in 180 cities as of March 2023.
Nandan Nilekani, Infosys co-founder and member of the ONDC advisory council, believes that ONDC has the potential to disaggregate e-commerce and create a level playing field for all players, big and small.
Speaking at Business Today’s MindRush conference last month, Nilekani said, “ONDC is on a journey to disaggregate e-commerce and allow small suppliers and small merchants to be on the grid and create equal opportunities.”
He added, “I believe the ONDC architecture will have a big impact on both hyperlocal commerce as well as mobility.”
The former chairman of UIDAI also noted that ONDC’s strength lies in the lack of a middleman, ie no platform fee or commission.
“The best part is you pay directly to the vendor without paying any platform in between,” he said.
Nilekani’s beliefs seem to be fructifying, in the sense that the lower cost to customers due to lack of platform commission has started gaining popularity among customers.
Unlike Swiggy and Zomato, the platform charges a 3 per cent commission, far less than the food delivery apps like Swiggy and Zomato, which can charge up to 25 per cent commission.
This is the reason why the cost to customers is lower on ONDC on certain orders as compared to the other food delivery apps.
Since ONDC is a digital commerce platform that aims at bringing buyers and sellers together, the platform does not have in-house delivery partners. Delivery is outsourced via third parties like eKart, Dunzo, Delhivery, etc.
A typical food order can be placed via ONDC as follows:
A customer can get on to ONDC via their Paytm app, which functions as an online storefront. The customer can then place the food order, ONDC would take a small commission before passing the order on to the restaurant of choice. After the order is ready, the third party delivery partner can pick it up and deliver it to the customer’s address.
Customers can also order via ONDC from other online storefronts like Meesho, Spice Money, Craftsvilla, etc.
But the pace at which ONDC is gaining popularity might not be enough for vendors.
A restaurant owner in Noida Extension, whose restaurant is on the ONDC network, told Business Today, “The concept is great for us also. Food delivery apps charge high commissions and sometimes force bundled deals down our throats. We don’t want that. But the problem is no one knows about ONDC. We barely get any orders. Maybe one in 15 days.”
Apart from the lack of popularity, something which is translating into lower sales made by vendors via the platform, another challenge ONDC needs to overcome is the lack of choice for customers.
When one checks ONDC via Paytm, its most popular online storefront, in Noida extension, only a handful of vendors show up with limited choices.
Can ONDC disrupt e-commerce?
The two biggest challenges faced by the platform are lack of sales for vendors and lack of choice for customers. Otherwise, for now, with a cap on commission, it seems to be the most economical option for customers.
As ONDC onboards more customers and vendors, it has the potential to disrupt not just food delivery, but also all kinds of e-commerce in India.