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ONDC plans subsidy revival for food delivery; Rs 100–150 crore incentive pool proposed
ONDC plans subsidy revival for food delivery; Rs 100–150 crore incentive pool proposed

Time of India

time11-07-2025

  • Business
  • Time of India

ONDC plans subsidy revival for food delivery; Rs 100–150 crore incentive pool proposed

The Open Network for Digital Commerce (ONDC) is considering reviving its subsidy program with a proposed incentive pool of Rs 100–150 crore for food delivery partners operating on its platform. If implemented, the move would mark a significant policy reversal for the government-backed e-commerce platform, which had previously scaled back such incentives. The new subsidy plan, still in the works and is expected to support platforms like Magicpin, Paytm , Ola Consumer, and Waayu. "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," ET reported quoting sources. The source further added that this could potentially translate into 80–100 million food orders routed through ONDC. India's food delivery space is currently dominated by Eternal-owned Zomato and Swiggy, based in Bengaluru. Restaurants, burdened by substantial commission fees, are actively seeking alternative platforms. The National Restaurant Association of India (NRAI) urged its members to join ONDC in January, following the launch of 10-minute delivery services by both major platforms Despite ONDC's entry into food delivery in 2021 aiming to challenge the market leaders, the impact has been limited. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Do You Know What Your Home Is Worth in Burnaby? (Learn How) CA Homes Click Here Undo According to brokerage firm BNP Paribas, "High commission fee of 18-25% per order (by Zomato and Swiggy) is driving restaurants to alternatives like ONDC, which charges 10-11% commissions and offers direct customer data access." However, the firm noted that ONDC has "not seen any meaningful success" to disrupt the market, despite interest from restaurants. The food delivery market, a crucial revenue source for Zomato and Swiggy, is projected to grow from $8 billion in 2023 to $17-21 billion by 2028. Restaurants are exploring additional options, including Rapido's upcoming low-commission service, Ownly. Growth rates for both major platforms fell below 20% during October-December 2024 and January-March 2025, with analysts estimating further decline to 15-16% in the April-June quarter. ONDC is overseen by a board comprising founding members, government nominees, shareholders, and independent directors. The recent leadership reshuffle comes amid a slump in order volumes. According to data, ONDC's retail orders, which include e-commerce, groceries, and food delivery — have fallen from a peak of 6.5 million in October 2023 to just 4.1 million in May 2025. ET had earlier reported that the discontinuation of subsidies played a key role in this decline. Since launching pilot operations in 2022, ONDC spent around Rs 95 crore on marketing and incentives in FY23 and FY24. At its peak, it was offering up to Rs 3 crore in monthly subsidies to each network partner, a figure that was later reduced to Rs 30 lakh. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now

ONDC mulls subsidy comeback amid slowdown in food delivery
ONDC mulls subsidy comeback amid slowdown in food delivery

Time of India

time11-07-2025

  • Business
  • Time of India

ONDC mulls subsidy comeback amid slowdown in food delivery

Academy Empower your mind, elevate your skills ETtech The Open Network for Digital Commerce ( ONDC ) is considering offering incentives of Rs 100-150 crore to food delivery firms on the network, an about-turn on the part of the central government's ecommerce platform which had stopped doling out subsidies in the recent past, said people with knowledge of the move, if implemented, will allow firms such as Magicpin, Paytm , Ola Consumer and Waayu to use the incentives to offer discounts to customers.'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,' said one of the persons, who did not wish to be identified, adding that subsidies of Rs 100-150 crore could result in 80-100 million orders going to restaurants via ONDC. These incentives are expected to be rolled out over a period of time, the person food delivery market is largely controlled by Eternal-owned Zomato and Bengaluru-based Swiggy , prompting restaurants forced to pay high commission fees to seek alternatives. In January, after both platforms launched 10-minute delivery services that could compete directly with eateries, the National Restaurant Association of India (NRAI) asked its members to join the ONDC While the entry of the ONDC in the food delivery segment in 2021 was meant to challenge the dominance of the larger players, it did not yield the desired results, according to analysts.'High commission fee of 18-25% per order (by Zomato and Swiggy ) is driving restaurants to alternatives like ONDC, which charges 10-11% commissions and offers direct customer data access,' brokerage firm BNP Paribas said in a recent note, adding that while restaurants tried to leverage the ONDC platform, it has 'not seen any meaningful success'.The brokerage has projected that India's food delivery market – which is a cash cow for Zomato and Swiggy – will expand to $17-21 billion by 2028 from $8 billion in explore alternatives, restaurants have also started working with urban mobility platform Rapido as it gears up to launch a low-commission food delivery offering, Ownly , ET had reported two consecutive quarters of October-December 2024 and January-March 2025, food delivery growth for both Zomato and Swiggy was below 20%. In the April-June quarter, growth is likely to have fallen further to 15-16%, sector analysts have to queries by ET, an ONDC spokesperson said, 'ONDC is working in close collaboration with NRAI under the guidance of DPIIT, Ministry of Commerce & Industry, to enable India's restaurant and food delivery ecosystem to serve customers more efficiently, transparently, and on their own terms.'The move to bring back incentives on the network has also come close on the heels of leadership changes at the ONDC. Its chief executive Thampy Koshy resigned from his position in April, after which chief operating officer Vibhor Jain was named the acting June, independent director Arvind Gupta stepped down from his post, and his departure was preceded by that of non-executive chairperson RS Sharma and chief business officer Shireesh Joshi . ONDC is governed by a board of directors and an advisory council. The board includes founding members, shareholders, government nominees and independent March, ET had reported that pulling back of the subsidies had led to a fall in overall retail orders on the network. Retail orders include ecommerce, grocery and food delivery. From a peak of 6.5 million in October last year, retail orders on ONDC fell to 4.6 million in February this year. During May – for which the latest data is available – the network saw retail orders further decline to 4.1 million. ONDC, which started its first pilot rollout in 2022, spend around Rs 95 crore in fiscal 2023 and fiscal 2024 on marketing interventions, or subsidies. At its peak, it was offering up to Rs 3 crore in incentives to each of its network participant monthly, which was gradually reduced to a maximum of Rs 30 lakh over time.'ONDC's early incentive programmes were designed as short-term enablers to help stakeholders experiment with and adopt the open network. These were never intended to mirror deep discounting strategies seen elsewhere,' the ONDC spokesperson also pointed to issues with last-mile logistics as a key reason behind the ONDC's food delivery not scaling up beyond a point.'ONDC has not been able to scale up very clearly on the food delivery side because food delivery as a proposition is very time sensitive. So you need to have lead times which are 35-40 minutes or lower than that. The problem with ONDC is that they don't have last-mile connectivity,' said Karan Taurani, executive vice president, Elara added that the proposed incentives might provide a temporary volume growth by tapping into the price-sensitive customer segment, with those valuing experience over discounts continuing to stick to the incumbents.

ONDC dangles discount carrot; Tariff woes hit TCS
ONDC dangles discount carrot; Tariff woes hit TCS

Time of India

time11-07-2025

  • Business
  • Time of India

ONDC dangles discount carrot; Tariff woes hit TCS

ONDC dangles discount carrot; Tariff woes hit TCS Also in the letter: ONDC mulls subsidy comeback to lure food orders Discount push: Restaurants eye new routes: Several have begun working with ONDC-linked platforms. Others are tying up with Rapido, which is prepping its own low-commission food delivery app, Ownly. Logistics remain a hurdle: Also Read: TCS clocks profit in Q1 despite deal slowdown Q1 performance: Revenue: Up 1.3% year-on-year (YoY) to Rs 63,437 crore, but down 3.1% in constant currency. Up 1.3% year-on-year (YoY) to Rs 63,437 crore, but down 3.1% in constant currency. Net profit: Rose 6% to Rs 12,760 crore. Rose 6% to Rs 12,760 crore. Deal wins: Total contract value stood at $9.4 billion. Total contract value stood at $9.4 billion. Operating margin: At 24.5%, up 30 basis points (bps) quarter-on-quarter, but down 20 bps YoY. At 24.5%, up 30 basis points (bps) quarter-on-quarter, but down 20 bps YoY. Attrition: Rose slightly to 13.8%, from 13.3% in the previous quarter. Tariff troubles: Also Read: Deal? No deal: CEO speaks: Also Read: Tata Elxsi Q1 profit drops as sales take a hit Q1 performance: Revenue: Fell 3.7% year-on-year (YoY) to Rs 892 crore. Fell 3.7% year-on-year (YoY) to Rs 892 crore. Ebitda: Dropped 26% to Rs 187 crore. Dropped 26% to Rs 187 crore. Net profit: Declined 22% YoY to Rs 144 crore. Outlook: Sponsor ETtech Top 5 & Morning Dispatch! Why it matters: The opportunity: Reach a highly engaged audience of decision-makers. Boost your brand's visibility among the tech-savvy community. Custom sponsorship options to align with your brand's goals. What's next: How may (A)I help you? Lenders, NBFCs tap agentic AI to serve customers Driving the news: Startups like Hyperface, and are building next-gen voice AI agents that don't just respond, but emulate human tones to make conversations feel natural. These tools go beyond traditional IVR and machine learning-based bots, enabling banks to reduce operational costs by up to 50%. Early use cases include handling queries around credit cards and basic account services. Scaling quickly: Challenges persist: Keeping Count Other Top Stories By Our Reporters Partners Group eyes Infinity stake: F&O reins cost stockbrokers users: Vertical AI opportunity for Indian startups: Global Picks We Are Reading Happy Friday! ONDC incentives are back on the table as food delivery faces a sluggish phase. This and more in today's ETtech Morning Dispatch.■ AI banking assistants■ Partners Group goes shopping■ Sebi curbs sting stockbrokersThe Open Network for Digital Commerce (ONDC) is planning a fresh subsidy push to woo food delivery customers, just months after pulling the plug on earlier incentives. The government-backed network is looking to earmark Rs 100-150 crore for the initiative, sources told cleared, the subsidy will allow platforms such as Magicpin, Paytm, Ola Consumer, and Waayu to offer deeper discounts to users. The incentives are likely to be rolled out in phases, according to those familiar with the food delivery market is still dominated by Zomato (owned by Eternal) and Swiggy. High commissions have forced many restaurants to explore cheaper reckon that despite the subsidy rethink, ONDC's most significant challenge remains last-mile delivery. Karan Taurani, executive vice president at Elara Capital, said that discounts might spike order volumes in the short run, but won't drive long-term growth unless core operational gaps are Consultancy Services (TCS) reported a modest profit rise in the June quarter , even as global demand faltered. Executives blamed geopolitical tensions, economic uncertainty and supply chain disruptions for the sluggish top is feeling the heat in the US, its biggest market, where tariffs are hindering IT spending. With artificial intelligence looming as a disruptor, recovery remains elusive. North America revenue fell 2.7%, dragged by delayed regions didn't fare much better. Europe declined 3.1%, while India saw a 21.7% revenue slump, following the completion of a large BSNL project.'It could be too early to call out when growth will resume,' said CEO K Krithivasan, though he expects better international traction later this fiscal.'Mega deals are always lumpy…we did not have any in FY25. It's very difficult to provide an outlook on mega deals…But we are working on a couple of them,' he Elxsi, another Tata Group company, reported a significant drop in first-quarter profit as revenue declined during the period due to macroeconomic Manoj Raghavan struck a cautious note but said the company expects gradual recovery through the year, with transportation and media units expected to rebound in the September Top 5 and Morning Dispatch are must-reads for India's tech and business leaders, including startup founders, investors, policy makers, industry insiders and Reach out to us at spotlightpartner@ to explore sponsorship and non-banking financial firms (NBFCs) are leveraging agentic AI , particularly voice-driven tools, to sharpen their customer service capabilities, from onboarding to query Finance, one of India's biggest lenders, is doubling down. It recently picked up a stake in a mobile security startup. Similarly, Aurinpro acquired to expand its AI toolkit for banking has approximately 44 GenAI startups focused on voice and speech. However, regulatory clarity is lagging. Experts say that the rules governing the use of AI in sensitive areas, such as debt collection, remain unclear, delaying rollouts and raising concerns about consumer 3 on Gemini was first launched at the Google I/O event in April, arriving in India just a week ago. The internet behemoth has now added a photo-to-video feature in the AI video generator. (Source: Google Shrikant Ravalkar, founder, Infinity Fincorp SolutionsSwiss investment giant Partners Group is set to acquire a majority stake in Mumbai-based non-bank lender Infinity Fincorp Solutions for Rs 1,950 crore (approximately $230 million).The total active user base of major Indian stockbroking platforms fell to 29.5 million in June from 30.5 million in February as market regulator Sebi curbed futures and options (F&O) trades and market volatility.A recent report by AI startup accelerator Upekkha highlighted that a price advantage and 20 years of IT services expertise position Indian startups favourably to tap into the vertical AI opportunity.■ Meta is trying to win the AI race with money — but not everyone can be bought ( The Verge ■ Cloning came to polo. Then things got truly uncivilised ( Wired ■ Politics and USAID cuts put a telehealth program on life support ( Rest of World

ONDC to serve subsidy to spice up food sales
ONDC to serve subsidy to spice up food sales

Time of India

time11-07-2025

  • Business
  • Time of India

ONDC to serve subsidy to spice up food sales

Academy Empower your mind, elevate your skills ETtech The Open Network for Digital Commerce ( ONDC ) is considering offering incentives of Rs 100-150 crore to food delivery firms on the network, an about-turn on the part of the central government's ecommerce platform which had stopped doling out subsidies in the recent past, said people with knowledge of the move, if implemented, will allow firms such as Magicpin, Paytm , Ola Consumer and Waayu to use the incentives to offer discounts to customers.'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,' said one of the persons, who did not wish to be identified, adding that subsidies of Rs 100-150 crore could result in 80-100 million orders going to restaurants via ONDC. These incentives are expected to be rolled out over a period of time, the person food delivery market is largely controlled by Eternal-owned Zomato and Bengaluru-based Swiggy , prompting restaurants forced to pay high commission fees to seek alternatives. In January, after both platforms launched 10-minute delivery services that could compete directly with eateries, the National Restaurant Association of India (NRAI) asked its members to join the ONDC While the entry of the ONDC in the food delivery segment in 2021 was meant to challenge the dominance of the larger players, it did not yield the desired results, according to analysts.'High commission fee of 18-25% per order (by Zomato and Swiggy ) is driving restaurants to alternatives like ONDC, which charges 10-11% commissions and offers direct customer data access,' brokerage firm BNP Paribas said in a recent note, adding that while restaurants tried to leverage the ONDC platform, it has 'not seen any meaningful success'.The brokerage has projected that India's food delivery market – which is a cash cow for Zomato and Swiggy – will expand to $17-21 billion by 2028 from $8 billion in explore alternatives, restaurants have also started working with urban mobility platform Rapido as it gears up to launch a low-commission food delivery offering, Ownly , ET had reported two consecutive quarters of October-December 2024 and January-March 2025, food delivery growth for both Zomato and Swiggy was below 20%. In the April-June quarter, growth is likely to have fallen further to 15-16%, sector analysts have to queries by ET, an ONDC spokesperson said, 'ONDC is working in close collaboration with NRAI under the guidance of DPIIT, Ministry of Commerce & Industry, to enable India's restaurant and food delivery ecosystem to serve customers more efficiently, transparently, and on their own terms.'The move to bring back incentives on the network has also come close on the heels of leadership changes at the ONDC. Its chief executive Thampy Koshy resigned from his position in April, after which chief operating officer Vibhor Jain was named the acting June, independent director Arvind Gupta stepped down from his post, and his departure was preceded by that of non-executive chairperson RS Sharma and chief business officer Shireesh Joshi . ONDC is governed by a board of directors and an advisory council. The board includes founding members, shareholders, government nominees and independent March, ET had reported that pulling back of the subsidies had led to a fall in overall retail orders on the network. Retail orders include ecommerce, grocery and food delivery. From a peak of 6.5 million in October last year, retail orders on ONDC fell to 4.6 million in February this year. During May – for which the latest data is available – the network saw retail orders further decline to 4.1 million. ONDC, which started its first pilot rollout in 2022, spend around Rs 95 crore in fiscal 2023 and fiscal 2024 on marketing interventions, or subsidies. At its peak, it was offering up to Rs 3 crore in incentives to each of its network participant monthly, which was gradually reduced to a maximum of Rs 30 lakh over time.'ONDC's early incentive programmes were designed as short-term enablers to help stakeholders experiment with and adopt the open network. These were never intended to mirror deep discounting strategies seen elsewhere,' the ONDC spokesperson also pointed to issues with last-mile logistics as a key reason behind the ONDC's food delivery not scaling up beyond a point.'ONDC has not been able to scale up very clearly on the food delivery side because food delivery as a proposition is very time sensitive. So you need to have lead times which are 35-40 minutes or lower than that. The problem with ONDC is that they don't have last-mile connectivity,' said Karan Taurani, executive vice president, Elara added that the proposed incentives might provide a temporary volume growth by tapping into the price-sensitive customer segment, with those valuing experience over discounts continuing to stick to the incumbents.

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