ONDC Changes Incentive Structure To Reduce Discounts And Focus On Organic Growth

Government-backed e-commerce platform Open Network for Digital Commerce (ONDC) has implemented a new incentive structure to reduce its reliance on discounts.

What Happened? As revealed in an Economic Times report, under this new scheme, the maximum discount offered per order has dropped to ₹100 from ₹125.

Moreover, only orders exceeding ₹200 for food and ₹300 for other products will be eligible for the discount. The discount-eligible order value includes shipping fees, as per ONDC’s notification to network partners.

An executive from a seller platform tells ET that the discount scheme initially aimed to raise awareness about ONDC. They also noted that the first batch of incentives that subsidized delivery charges, capped earlier this month, had an impact on the volume of orders.

See also: Will ONDC Topple Zomato, Swiggy? Analysts Say Not Yet

ONDC’s daily order count peaked at 25,000 in May but has since declined to an average of 13,000, primarily consisting of food and grocery orders. This figure does not include rides ordered through Namma Yatri, an auto-rickshaw ride-hailing platform.

The e-commerce network intends to attract platforms and customers and grow organically with the help of its incentives. According to the source, the competitive intensity arising from multiple platforms operating on the same network will regulate pricing.

Although the incentive for a delivery fee was cancelled, various logistics players like Shadowfax, Dunzo, Loadshare, Grab, etc., provide competitive delivery fees. Customers can select any of these service providers based on factors such as the fee.

ONDC will maintain the current incentive structure until June 28, then they plan to announce a new discount scheme.

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Posted In: e-commerceONDC