ONDC Plans Fresh Subsidy Push To Tap Food Delivery Customers: Report

SUMMARY

ONDC is looking to offer subsidies of INR 100-150 Cr to food delivery companies on the network

The subsidies planned could result in 80-100 Mn orders going to restaurants via ONDC

ONDC reportedly slashed the maximum limit of incentives by 84% to INR 40 Lakh from the earlier INR 2.5 Cr in September last year

The Open Network for Digital Commerce (ONDC) is reportedly planning to pay out subsidies of INR 100-150 Cr to food delivery companies on the network.

The incentives, expected to be rolled out over a period of time, are expected to translate into 80-100 Mn orders going to restaurants through the state-backed quick commerce venture.

“The modalities of the scheme are being worked out and the final amount could change. ONDC officials and representatives from restaurants and food delivery firms have been in conversations for the last month on the issue,” an ET report said, citing sources close to the matter.

These incentives are expected to be rolled out over a period of time.

Inc42 has reached out to ONDC for comments on the development. The story will be updated based on the response.

The move, if implemented, will allow firms such as Magicpin, Paytm, Ola Consumer and Waayu to use the incentives to offer discounts to customers.

In September last year, ONDC slashed the maximum limit of incentives granted to its network participants by 84% to INR 40 Lakh from the earlier INR 2.5 Cr, with an aim to prevent the concentration of a few big players on the network.

The logistics network participants which clocked more than 3 Lakh orders in August 2024, were not eligible to avail the incentives.

Notably, ONDC revised its incentive scheme for the fifth time for its network participants, by reducing food category subsidies by 50% and expanding merchant density in 45 non-metro districts, effective September 4, 2023.

However, the state-backed network crossed the 200 Mn milestone over 2 years after starting operations in January 2023.

ONDC, which acts as an enabler for connectivity between different platforms, was set up to expose small merchants to the online medium of business, offering an opportunity to compete with bigger players like Amazon and Flipkart.

The network has a presence in foodtech, consumer goods, financial services, and mobility segments at the moment.

Further, there has been an extended delay in its network fee implementation, which has been postponed to provide stakeholders with sufficient time to align their internal processes and ensure a seamless transition to the fee regime.