ONDC Continues To Gain Traction, Clocks Record 89 Lakh Transactions In May

The Open Network for Digital Commerce (ONDC) continued to see rapid traction in the month of May, clocking a record 89 Lakh transactions across retail and ride-hailing segments. This was an increase of 23% month-on-month (MoM).

Giving a breakdown of the data, the state-backed network said that the bulk of the transaction volume came from the retail segment, which hit a new peak of 50 Lakh orders in May. This represented a MoM growth of 39% from 35.9 Lakh in April.

Of this, the network saw a single-day record of 2 Lakh retail transactions during the month under review. Meanwhile, the grocery and food delivery categories crossed the 10 Lakh order mark each for the first time in May 2024. 

In a statement, ONDC also said that while the home and kitchen sub-segment logged 6.3 Lakh orders, fashion clocked 3.3 Lakh transactions. Meanwhile, other retail sub-segments accounted for the remaining 20 Lakh orders. 

“Categories like grocery, fashion, home, and kitchen have seen rising shares, indicating diversification of ONDC’s retail business. With the increase in contribution by other categories, the food segment accounted for around 20% of total retail orders in May compared to 76% a year ago, when food (was) the only category,” the statement said. 

On the other hand, the ride-hailing segment on ONDC saw moderate growth as the platform recorded 38 Lakh trips in May as against 36 Lakh transactions in April. It is pertinent to note that ONDC marked the highest number of trips in March at 40 Lakh this year. 

In terms of geographies, Delhi, Uttar Pradesh and Maharashtra recorded the most number of orders on the state-backed network. 

On a broader level, ONDC also said that the network now comprises 5.35 Lakh sellers spanning 1,200 cities. Of these sellers, 84% are “small sellers” which account for 56% of the total orders on the platform. 

This comes at a time when more and more Indian startups in the ecommerce landscape are lining up to join the ONDC to shore up their business operations. Major companies such as Paytm, Ola, PhonePe, and Shiprocket have joined the ONDC Network in the past 18 months. 

For instance, reports surfaced last month that Ola was working on a functionality to offer users the option to purchase groceries, fashion and apparel on its app. On similar lines, PhonePe also rolled out services such as food delivery and ticket booking through ONDC.  

Additionally, the likes of Delhivery, Dainik Jagran, Uber, IDFC Bank, Kotak, Dunzo, and Tata Neu have also integrated some of their services with the ONDC. Not just this, Gautam Adani-led Adani Group was also recently said to be mulling its ecommerce and fintech foray on the back of ONDC. 

Another conglomerate, Reliance Retail, last week also reportedly rolled out a pilot programme on the ONDC via Fynd to test waters on the network. 

Launched in 2021 under the aegis of the Department for Promotion of Industry and Internal Trade (DPIIT), ONDC is an open protocol-based network that will enable local commerce across multiple segments including grocery, mobility, among others. 

On the back of this platform, the government intends to shore up India’s ecommerce penetration to 25% as ONDC eyes a gross merchandise value (GMV) of $48 Bn in the next couple of years.