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
Krishnapriya V.S. / The India Forum :
Context & Ripple Effects
India’s food-delivery market had already been shaped by Zomato and Swiggy’s spending pressure and expansion into other businesses, while restaurants had raised concerns about platform commissions and discounting in earlier disputes over commissions and promotions.
ONDC was presented as a way for smaller merchants to compete with rapid-delivery platforms, but its difficulty gaining food-delivery share after reducing discounts shows the gap between an open network’s formal availability and a service consumers will switch to using.
First-order effects
- ONDC’s reduced discounting weakens its immediate ability to attract price-sensitive food-delivery orders from Zomato and Swiggy.
- Zomato and Swiggy retain the advantage of established demand and restaurant relationships while ONDC’s challenge to their near-duopoly loses momentum.
Second-order effects
- Restaurants seeking an alternative to the two leading apps have less near-term leverage to use ONDC as a counterweight on commissions and promotional terms.
- The result reinforces the earlier lesson that food-delivery competition can depend heavily on subsidized customer acquisition, as seen in the market’s earlier cash-burn pressures.
Third-order effects
- If open commerce networks cannot sustain competitive consumer experiences without discounts, nominal interoperability alone may not materially reduce platform gatekeeper power.
- The durable test for ONDC and similar systems will be whether they can create repeat use and viable merchant economics without relying on the same subsidy model used by incumbent platforms.
The trend: This is part of a broader shift from building open digital-market infrastructure to proving that openness can translate into usable, self-sustaining competition against entrenched platforms.