During a recent townhall meeting, the National Restaurant Association of India (NRAI) reiterated its advice to members, stating that “Control is back in your hands.” The purpose of the meeting was to introduce restaurant partners to the government-backed ONDC (Open Network for Digital Commerce) platform, empowering them to regain control over their operations.
Anurag Katriar, Founder at Indigo Hospitality and NRAI Trustee, said, “We have advised our members that access to data, discounting strategies and choice of delivery fleet will be their own decision on the ONDC platform.”
“This has not been the case with aggregators Swiggy and Zomato, where we don’t get access to customer data and cannot control consumer prices,” he added.
During the townhall meeting, NRAI, which boasts a membership of five lakh individuals, emphasized that the ONDC platform will deliver enhanced profitability for restaurant partners while prioritizing personalization and maximizing visibility.
“The pricing will be audience driven; this is not a pricing or discount war,” the industry body said.
The ONDC platform has made a notable entry by offering consumers prices that are 30-80% lower compared to established food delivery platforms like Swiggy and Zomato. In addition, it imposes significantly lower commissions on restaurants. This strategic pricing and commission structure sets ONDC apart in the market.
Read More: ONDC sparks price war, threatens Zomato and Swiggy dominance in food delivery space
Moreover, the platform provides restaurants with access to valuable consumer data, enabling them to personalize their offers and promotions based on customer preferences. This particular feature addresses a longstanding conflict between restaurant companies and aggregators, such as Swiggy and Zomato. The National Restaurant Association of India (NRAI) has accused these aggregators of withholding essential data crucial for their consumer interface strategies. As a result, the NRAI escalated the matter to the Competition Commission of India (CCI).
Queries directed to Swiggy and Zomato went unanswered, with no response received from either company.
Despite concerns raised by several analysts regarding the long-term sustainability of the discounts provided by ONDC, multiple restaurant companies have expressed their intention to adapt their systems and integrate with the government-backed platform. They view ONDC as an additional channel through which they can cater to their customers’ delivery needs.
In a post earnings call this week, Sameer Batra, president and chief business officer at Domino’s Pizza operator Jubilant FoodWorks said: “We do want to get onto the ONDC bandwagon, we are organising ourselves to launch it.” Batra added on the call that “wherever customers are… Domino’s pizza will serve them. So if ONDC is a channel, we will get on it.”
Read More: Domino’s Pizza takes strategic step, set to join government’s ONDC network
Popular brands such as McDonald’s, Wow! Momo, Haldiram, Burger King, and Naturals are among the diverse range of companies that have decided to join and onboard the ONDC platform.
According to recent reports by analyst firms Jefferies, Motilal Oswal Financial Services, and JF Financial, restaurant brands state that their adoption of the ONDC platform is intended to augment their food delivery options rather than replace established aggregators like Swiggy or Zomato. These reports affirm that ONDC does not pose a threat to the existing aggregators.
Read More: Brokerage firm Motilal Oswal dismisses immediate threat to Zomato from ONDC
“ONDC in its current shape and form is nowhere close to shaking up the online food-tech industry,” JM Financial wrote in a May 17 note. It added that the commissions that restaurants are paying to onboard the government platform at about 7 per cent are “grossly subsidised” and will have to be hiked to about 10-16 per cent for the network to be sustainable.
The ONDC platform facilitates direct sales of food from restaurants to consumers through popular buyer apps like Paytm, Magicpin, and PhonePe. This platform, introduced by the Department for Promotion of Industry and Internal Trade (DPIIT), collaborates with delivery operators such as Shadowfax, Dunzo, and Loadshare, who are compensated by restaurants for fulfilling customer orders. By partnering with these buyer-side apps, ONDC has been able to reduce customer acquisition costs significantly, as these apps already boast a large user base comprising hundreds of thousands of active users.
Read More: How to use ONDC – The affordable food delivery app that’s creating waves against Swiggy and Zomato
