The Open Network for Digital Commerce (ONDC) reported a 5% month-on-month growth in transactions, reaching 12.58 million in August, compared to a 21% surge in July. This slowdown is attributed to reduced cash incentives for mature segments like food and grocery by the government-backed interoperable network.
Of the total transactions, 4.74 million were in the mobility sector, facilitated by services such as Namma Yatri, a challenger to Uber and Ola. The remaining 7.84 million transactions were in the non-mobility category, including retail purchases and logistics services for on-network order deliveries.
Recent months have seen a shift towards on-network logistics, with companies like Ola, Loadshare, Pidge, and Shadowfax ramping up their offerings. On-network logistics transactions grew by 20% month-on-month to 1.7 million in August.
The grocery segment, which saw a 61% surge in July, contracted by 11% to 1.28 million orders in August. The food and beverage segment increased by 12.5% to 1.89 million orders. Fashion accounted for 650,000 transactions, home and kitchen 570,000, and other categories such as gift cards and electronics made up the remaining 1.75 million.
Over the last 18 months, new-age companies like Paytm, Ola, PhonePe, Meesho, Magicpin, and Shiprocket have joined ONDC, aiming to reduce the dominance of major players such as Amazon, Flipkart, Zomato, and Swiggy in India’s e-commerce market. The government aims to increase e-commerce penetration to 25% in the next few years, targeting a gross merchandise value of $48 billion.
Amidst rapid retail growth, ONDC has announced a phased reduction of up to 75% in financial incentives for network participants by the September quarter. Participants have been advised not to adjust incentive payouts against their goods and services tax calculations.
The new incentive structure caps the maximum monthly incentives at ₹2.5 crore, down from ₹3 crore, with a quarterly limit set at ₹6 crore. The most significant reduction in incentives will impact the food, beverage, and grocery categories, which currently form a substantial share of the network’s monthly retail order volumes.
