ONDC Slashes December Incentive By 33% To INR 40 Lakh

SUMMARY

ONDC has reportedly trimmed its incentive for network participants to INR 40 Lakh for December, marking a 33.33% dip from INR 60 Lakh offered during the festive season in October

It is pertinent to note that these incentives are offered to network players, who further use them to fund customer discounts and promotions for increasing adoption of the platform

Notably, the financial assistance to network participants is based on order volumes

State-backed Open Network for Digital Commerce (ONDC) has reportedly trimmed its incentive for network participants to INR 40 Lakh for December, marking a 33.33% dip from INR 60 Lakh offered during the festive season in October.

According to a Moneycontrol report, citing a memo floated by the network, the decision is a part of ONDC’s strategy to conserve cash.

The memo also noted, “For network participants that have crossed an average of 1 Mn orders per month from August to October, the monthly limit for cumulative financial assistance will be capped at INR 30 Lakh.”

This 33.33% reduction in payout incentives comes after a temporary increase during the festive season to boost demand.

It is pertinent to note that these incentives are offered to network players, who further use them to fund customer discounts and promotions for increasing adoption of the platform.

Notably, the financial assistance to network participants is based on order volumes.

Previously in September, ONDC slashed the maximum limit of incentives granted to its network participants by 84% from the earlier INR 2.5 Cr to INR 40 Lakh.

This comes close to ONDC’s announcement of implementing a fee of INR 1.5 for every order exceeding INR 250 from January 1.

This development comes as ONDC has been rapidly expanding its network and service offerings.

For the month of November, ONDC reported a transaction volume of 14.4 Mn against 14 Mn in October. Of these, the mobility segment accounted for 6.2 Mn transactions while non-mobility around 8.2 Mn.

In recent months, ONDC has made significant strides in its fintech foray, facilitating its first mutual fund transaction in October through a partnership with Nippon India Mutual Fund. The network also launched credit offerings in August, enabling six-minute loan disbursals through various buyer apps.

ONDC currently claims to have more than 6.38 Lakh sellers and service providers operating across 609 cities. In November, ONDC logged 14.5 million transactions. The introduction of the transaction fee structure appears to be a strategic move to ensure sustainable operations as the network continues to scale.