ONDC hits 8.9M transactions, retail orders reach 5M in May 2024

The government-backed protocol Open Network for Digital Commerce (ONDC) recorded 8.9 million transactions across retail and ride-hailing segments in May 2024—an all-time high and a 23% month-on-month increase.

Retail orders surged to 5 million in May from 3.59 million in the previous month, with a single-day high of 200,000 transactions. For the first time, both grocery and food delivery categories surpassed 1 million orders each, the network said in a statement.

Home and kitchen orders reached 630,000, while fashion orders hit 330,000 in May. The food segment's share of total retail orders dropped to 20% from 76% a year ago, reflecting business diversification.

Ride-hailing saw slower growth, rising from 3.6 million to 3.8 million trips, with Delhi, Uttar Pradesh, and Maharashtra leading in order volume.

The government-backed network now includes 535,000 sellers, of which 84% are small businesses. ONDC aims to boost India's ecommerce penetration to 25%, targeting a $48 billion gross merchandise value in coming years.

In a recent media roundtable, ONDC CEO Thampy Koshy expressed his optimism about reaching 40-50 million monthly transactions by the end of 2024.

The network now boasts nearly 550,000 merchants, predominantly from the mobility sector. However, the share of mobility transactions has dropped from 95% to 45% as other categories like food, grocery, beauty, and electronics have gained traction, Koshy said.

Koshy anticipates food to account for 30% and grocery 15-20% of future transactions.

There are also reports that Adani Group is planning to enter the ecommerce business via the ONDC route. As per the Financial Times, the business conglomerate plans to integrate its Adani One super app with the network as a buyer app.