India's Open Network for Digital Commerce has struggled to break the near-duopoly of Zomato and Swiggy in online food delivery after cutting back on discounts
A near-duopoly of Zomato and Swiggy controls almost 95% of India's digital platform-based food delivery market …
Context & Ripple Effects
India’s food-delivery market has long been shaped by Zomato and Swiggy’s costly competition and efforts to expand beyond core delivery, as noted in an earlier account of their cash-burn pressures and diversification efforts. The current result suggests that an open-network alternative has not yet translated formal openness into a durable consumer-facing challenge.
The two incumbents have also moved into quick food delivery, a neighboring segment covered in their entry into quick food delivery. That expansion increases the importance of their existing consumer and merchant relationships while ONDC’s discount-led route has weakened.
First-order effects
- ONDC’s reduced discounts have coincided with its failure to materially dislodge Zomato and Swiggy, which together retain roughly 95% of India’s platform food-delivery market.
- Zomato and Swiggy face less immediate price-led pressure from the open network; consumers and restaurants have less reason to shift orders solely for subsidized offers.
Second-order effects
- The result raises the bar for any food-delivery challenger: competing against entrenched platforms appears to require more than lower prices, particularly where the incumbents are extending into quick food delivery.
- Restaurants’ dependence on the leading apps may persist, keeping unresolved the friction over platform commissions and discounting documented in earlier restaurant-platform tensions.
Third-order effects
- If open commerce networks cannot sustain adoption without incentives, policymakers and market participants may need to distinguish nominal network openness from the harder task of building usable demand, merchant participation, and service reliability.
- The episode reinforces a broader platform-market pattern: concentrated consumer habits and operational scale can endure even when an alternative is designed to reduce gatekeeper power.
The trend: Open digital-commerce networks are testing whether interoperability can overcome the demand, supply, and service advantages of established platform gatekeepers without permanent subsidies.