In a bid to move away from discounting on the platform, the Open Network for Digital Commerce (ONDC) has introduced a revised incentive structure that kicks in from Thursday. “The eventual plan was always to withdraw discounts and incentives,” a person close to the matter said.

Under the new scheme, the maximum discount that can be offered per order has been limited to Rs 100, compared to Rs 125 earlier. Further, the discount will only be offered to users whose order value is more than Rs 200 in the case of food orders, and Rs 300 in the case of other products.

The minimum order value to avail discounts includes shipping fees, according to a notification issued to network partners by ONDC.

An executive at a seller side platform said that the discounting scheme was initially brought in to create awareness about ONDC. However, the executive told ET that the cap on the first set of incentives for subsidising delivery charges, instituted earlier this month, had a negative impact on the number of orders.

Also read | Explained: ONDC vs Zomato-Swiggy and what it means for the food-delivery space

In May, ONDC orders peaked at 25,000 orders a day but have since fallen to an average of 13,000 orders a day, the person said, adding that most of these orders were on account of food and groceries. This does not include the mobility numbers from Namma Yatri, an auto-rickshaw ride-hailing platform.

“The understanding was that the incentives were there to attract platforms and customers to get on board ONDC. Now, the aim is to grow organically. With multiple platforms working on the same network, the competitive intensity will take care of the pricing,” the person said.ET had reported that effective May 9, the incentives for subsidising delivery costs of buyers would be capped.

“For example, even though the delivery fee incentive was revoked, there are several logistics players on the network doing food delivery, like Shadowfax, Dunzo, Loadshare, Grab, etc. These players offer competitive delivery fees on a real-time basis, and the customer has the choice to go with any of these service providers based on a number of factors, including the fee,” he added.

The revised incentive structure will be in place till June 28, following which ONDC is expected to notify a new scheme on discounting. Several brokerages and research firms have questioned the sustainability of ONDC’s model, which is currently driven by discounts and subsidies.

Earlier this month, brokerage firm Jefferies noted that “the popular narrative currently seems to be that lower prices imply Zomato/Swiggy are over-charging” but the reality is, it noted, that despite significant scale, a steady rise in take rates and an acute cost focus, both were barely making any profits.

Recently, ONDC chief business officer Shireesh Joshi had also spoken about the network’s plan to levy fees on participants to meet its costs in the long run.

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