Domino's Puts ONDC On Its Menu: Pivots Towards Lower Commission Network

Domino’s Pizza, operated by Jubilant FoodWorks, is preparing to join the Open Network for Digital Commerce (ONDC) to start accepting orders on the government-backed commerce network. Sameer Batra, the President and Chief Business Officer of Jubilant FoodWorks, confirmed this in an earnings call on May 17.

What Happened? Domino’s is working on the necessary technology scoping and integration to enable this transition, aiming to serve their customers wherever they are.

Joining ONDC, which charges a commission of around 8-9% to restaurants, can potentially reduce Domino’s costs compared to platforms like Swiggy and Zomato, which charge between 20% to 30% commission.

However, industry experts and brokerage firm analysts caution that the lower prices on ONDC may be due to substantial discounts provided by the network and may not be sustainable long term.

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Despite planning to join ONDC, Jubilant FoodWorks continues to express its preference for receiving more direct orders via Domino’s app, which enables cost savings. The company’s loyalty program, Domino's Cheesy Rewards, reported a growth of 28.3% compared to the previous quarter, reaching 13.6 million enrollees.

In a strategic move to gain an edge over competitors like Zomato and Swiggy, Domino’s has also started testing 20-minute pizza deliveries in Bengaluru, where it operates 175 physical stores. The company plans to gradually extend this speedy delivery service to 6-7 other major cities.

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