Retail orders on the ONDC (Open Network for Digital Commerce) dropped significantly last Sunday compared to the previous weekend, by more than 50% to roughly 12,000, as a result of significant user discounts on logistics being severely reduced as a result of changes made to the network’s incentives last week. The industry assessments note that this decline was also partially a result of difficulties some seller-side applications with an emphasis on groceries encountered when confronted with an unexpected increase in volume for which they were not operationally prepared.

Currently, the majority of retail orders on ONDC are for food delivery, followed by a sizeable but lower percentage of sales for groceries and a low-single-digit percentage of orders for home furnishings. A Rs 100 discount coupon run by a significant network member caused a sudden spike in orders that some grocery retailers and seller-side apps were unable to handle. Although some grocery stores lacked the necessary inventory, the seller-side apps lacked automated scaling on cloud servers.

Currently, the majority of retail orders on ONDC are for food delivery

Events like Flipkart Big Billion Days and Amazon Prime Days are always prepared for months in advance. Even though, some clients will never receive everything to their satisfaction. That kind of preparation must be made in conjunction with sellers and the seller-side apps on ONDC, though.

Due to the nature of a network, capacity issues affecting a single network participant may not affect the entire network. However, in the beginning, customers may have a frustrating experience as a result. ONDC will need measures to deal with the network’s extremely widespread engagement of minor players.

Since March, ONDC has seen a rapid increase in transaction volume. In addition to 34,000 rides per day in mobility, the retail sector experienced a daily peak volume of over 25,000 orders during the first week of May. The introduction incentive offered by Open Network for Digital Commerce, which has been expanding quickly, had a big role in this.

The introduction incentive offered by ONDC, which has been expanding quickly, had a big role in this.

Over 25,000 orders were placed daily in the retail sector during the first week of May, and 34,000 rides were taken daily for mobility. This was substantially backed up by the launch incentives offered by the ONDC, the pricing strategies proposed by network participants like Phonepe, Paytm, and Magicpin, as well as by a few of the merchants.

Due to the sellers’ and buyers’ flexibility, several participants and buyers have started to develop their own discounting-driven marketing strategies. Despite the fact that this is one of the network model’s key characteristics, last weekend’s problems demonstrate that, at the very least in the beginning, close coordination between the many network players would be necessary to prevent failures.

According to ONDC, reduced network commissions would result in more reasonable costs for consumers because retailers like supermarkets, eateries, and electronic brands are anticipated to pass along the advantages to their patrons. Many people believed that the network had succeeded when food items’ listing prices on the network earlier in the month looked to be far lower than those on Swiggy and Zomato.