Govt-backed ONDC to challenge Swiggy, Zomato duopoly

Brands such as McDonald's, Taco Bell, Behrouz Biryani, Wow Momo, Pizza Hut, Cafe Coffee Day are at 30-80% discounts on ONDC

The government is officially entering the Indian food delivery space which is at present dominated by two entities namely Zomato and Swiggy. This has led to a price battle between these platforms.

The Open Network for Digital Commerce (ONDC), is an organization backed by the government and has the potential to be a major disruptor for players like Zomato and Swiggy. The platform allows restaurants to sell food to consumers through buyer apps, The Economic Times reported.

The move is considered a paradigm shift by industry experts who think that if ONDC does aggressive marketing and competitive pricing added with discounts, it can become a larger threat to Swiggy and Zomato.

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Brands such as Mcdonald's, Taco Bell, Behrouz Biryani, Wow Momo, Pizza Hut, and Cafe Coffee Day are at 30-80 per cent discounts on ONDC ordering platforms including Paytm.

Meanwhile, many of the experts also consider this to be short-term aggressive marketing and opine that it won’t sustain in the long run.

They think that the journey of ONDC at present is to become profitable, hence the discounts. Moreover, ONDC is not charging its customers any delivery fee.

NRAI has already asked the restaurants to explore the ONDC platform as an option to sell food with a warning that they should keep in mind long-term sustainability.

ONDC was launched in 2021 to enable consumer-facing enterprises to use technology and solutions. The bet testing happened in Bengaluru across 16 pin codes. At present, the deliveries are done by platforms such as Shadowfax, Dunzo and Loadshare.

The commission charged by Swiggy and Zomato is somewhere between 18 per cent to 25 per cent while commissions on ONDC are at 8-10 per cent.