Ever since the inception of online food delivery platforms in India, two major companies have held a chokehold in the Indian market. They are none other than Swiggy and Zomato. Swiggy was founded by Sriharsha Majety, Nandan Reddy, and Rahul Jaimini in 2013, and they immediately expanded their food delivery options from Bangalore to eight other Tier 1 cities across India. Zomato, on the other hand, was started by Deepinder Goyal and Pankaj Chaddha five years prior to Swiggy in 2008. By 2011, they had expanded to Delhi, Mumbai, Bengaluru, Chennai, Pune, Ahmedabad, and Hyderabad.
Both these companies have continued to be the two primary sources of food delivery options for millions of Indians. Whenever you are craving your favorite food late at night or stuck in a meeting, you go to your phone to either open the Swiggy or the Zomato app and then order. Such has been their monopoly and chokehold that you barely even bother to look somewhere else.
But all this is about to change. Or at least the Indian government is attempting to do so. Enter a new feature in this field – ONDC, which stands for Open Network for Digital Commerce. So, what is ONDC? And how can it disrupt the Swiggy-Zomato grasp in the market? Let’s learn about it in detail.
The ONDC is basically a three-legged tool. They are:
- Discoverability
- Open Protocol for E-Commerce Platform and Interoperability
- Price Comparison
Let’s understand each one of these tools with examples.
- Discoverability: If you want to order a burger, possibly from Wendy’s or Burger King, you will immediately open your Swiggy or Zomato app on your phone to place the order. You are already invested in these platforms; they seem trustworthy to you, and you know what you’ll get for the price you’ll pay. There’s nothing hidden there.
But now, if you search for a ‘Burger’ with ONDC, you will find a slew of Burger options from multiple different food delivery platforms. This is where you can discover a platform called ‘eSamudaay,’ a tech startup that has digitalized your local storage in your neighbourhood. This way, you can choose a burger from anywhere, from a local outlet to an outlet from any large corporation. You can also get it at your preferred price range, and the delivery time also reduces with it.
In short, you will have a ‘Unified Search Feature,’ wherein you can get the products from all sites without the need for downloading them and the hassle of switching from one app to another. This is a huge feature that will prevent Swiggy and Zomato from monopolizing the market.
- Open Protocol for E-Commerce Platform and Interoperability – To understand this point, let’s look at our delivery choices. Let’s consider that you are ordering ‘Butter Chicken’ from either Zomato or Swiggy. Now, even though these platforms will show you ‘Butter Chicken’ options from multiple restaurants for you to choose from, if Zomato or Swiggy decides to add a higher delivery charge at the end, which they very often do, then there’s nothing you can do about it. Moreover, these platforms may also have a scarcity of delivery boys in that area. And if that’s the case, then you won’t be able to order from there or in that area.
Now, with ONDC, even delivery companies will be listed along with customers, aggregators, and restaurants. So, for example, ONDC will tell you that Zomato delivery boys might not be available, but Dunzo delivery agents are available in that area. So you can have your order placed in Zomato, but have it picked up by Dunzo. Alternatively, you could also ask your Dunzo or any other delivery partner to pick up your Zomato order from the restaurant.
Similarly, you can place your order from eSamudaay, which has all the ‘Mom & Pop’ stores to order from, and get it delivered from Dunzo. This way, a hugely unfulfilled space exists in the food delivery system that the delivery companies can fill. This is another point that highlights that Swiggy and Zomato have holes in their system and how it can be exploited by others, i.e., ONDC, to prevent both companies from monopolizing.
- Price Comparison – A video by the YouTube channel ‘Think School’ nicely names this feature point as the ‘Trivago Feature.’ He calls it so, because back in 2010-2014, there were hundreds of websites with hundreds of hotels listed with different prices. This was until Trivago stepped in, brought all of them under one umbrella, unified them, and presented it to customers in a much more efficient way. Triavgo said that you choose the hotel and they will list all the prices from every single website. You could also minimize your search options based on your preferred price range.
This is exactly what ONDC intends to do for food platforms and e-commerce. So, for example, if Swiggy secretly pushes up its prices, you won’t be blindsided by the ecosystem of Swiggy, or even Zomato, for that matter. You will then have the option of looking at ONDC and what they have to offer. This way, you can see other food platforms or e-commerce websites with lesser cost.
This is the third way in which ONDC can affect and impact both Swiggy and Zomato, among others.
This is how the Government intends to empower merchants and consumers by breaking the silos into a single network. This drives both innovation and skill, eventually transforming all the businesses from retail goods and food to even mobility. This unique innovation from the Government is interesting since this is one of the most complex problems they have ever solved or attempted to solve.
Proponents of ONDC say that this feature will shift Indian e-commerce and food platforms from the current platform-centric model, dominated by market leaders, to an open network. With more than INR 180 crores raised from multiple investors, including some of India’s largest banks, the ONDC is also backed by some big corporate personalities such as Nandan Nilekani.
Whether the ONDC will stay for long and disrupt the established market of Swiggy-Zomato, only time will tell.
