Domino’s India Set To Join The ONDC Party

Pizza chain Domino’s India is set to join the Open Network for Digital Commerce (ONDC) after the government’s digital commerce network has rapidly scaled to nearly 25,000 orders a day.

During an earnings call on Wednesday (May 17), Jubilant FoodWorks CBO and president Sameer Batra told the analysts that the pizza chain was getting its tech integrations in place before starting to take orders on ONDC.

“We do want to get onto the ONDC bandwagon. We are organising ourselves to launch it on ONDC. Wherever customers are, we want to serve them with Domino’s pizza… At the moment, our teams are working on technology scoping and integration. Whatever time it takes to launch, we will get into ONDC,” Batra said.

ONDC already features many big-name food brands on its platform, including McDonald’s. Domino’s would become the second international food chain to join the ambitious government project, which is currently offering a flat INR 50 discount to users placing orders via buyer apps such as Paytm, magicpin and PhonePe’s Pincode.

However, Jubilant has long preferred to consolidate its customer base on the Domino’s India app to save costs. Last July, it was reported that Domino’s wanted to pull its restaurants off Swiggy and Zomato amid an increase in restaurant commissions.

However, Jubilant has stated that it would like to serve Domino’s pizzas across channels, including ONDC.

Last year, the Domino’s India operator started a loyalty programme – Domino’s Cheesy Rewards – where it offered a free pizza to customers after they placed six orders on the app. During the earnings call, the company stated that enrollment in the rewards programme had shot up by 28.3% quarter-on-quarter in March 2023 to reach 13.6 Mn.

Further, the loyalty order contribution reached 45% in March 2023. This has also positively impacted app downloads for Domino’s India. “The quarterly app downloads [for the Domino’s app] were at 8.5 Mn, up 10.4% and monthly active users were at 11.1 Mn, up 22% year-on-year,” Jubilant said during the earnings call earlier this week.

Jubilant’s bullishness on Domino’s in-house app also comes from the fact that in the cities where it has a dense network of physical outlets, it is beating the likes of Zomato and Swiggy on delivery times. In Bengaluru, for instance, the company has started piloting 20-minute deliveries, off the back of 175 Domino’s outlets in the city.

Although, the pizza chain has always guaranteed a 30-minute delivery by limiting the delivery radius and maintaining the timeline even when orders are placed on food delivery aggregators.

The move from Domino’s comes as ONDC is emerging as a threat to the duopoly of Swiggy and Zomato in the Indian food delivery market. While commissions charged to restaurants by the duo could range between 20% to 30%, the same on ONDC is around 8% for now.

The government’s network claims that lower commissions on the network will translate to more affordable prices. This is based on the assumption that sellers will pass on the benefits to the consumers.

Earlier this month, Inc42 reported that food prices on ONDC were significantly lower than Swiggy and Zomato, which was thought to be a major disruption and a proof of challenge to the food delivery aggregators.

However, subsequent reports from brokerage firms have pointed out that ONDC’s lower prices are off the back of the network-sponsored discounts, which are unsustainable in the long term. At the same time, brokerages have pointed out that ONDC will not be a big detractor for Zomato and Swiggy in the short term.