Ola set to enter grocery delivery service again, this time through ONDC

Bhavish Aggarwal-led Ola is preparing to launch grocery delivery services through the government-supported Open Network for Digital Commerce (ONDC) in the coming days, according to a report by Moneycontrol.

Currently, Ola has established itself as the second-largest buyer-side platform for food delivery on ONDC, following Magicpin. The company processes between 15,000 to 20,000 food orders daily and accounts for nearly one-third of the demand in significant markets such as Delhi-NCR and Bengaluru, the report said, citing sources.

Ola’s recurring experiment with grocery delivery

This isn’t Ola’s first venture into grocery delivery. Back in July 2015, the company launched an online grocery store in Bengaluru, shortly after introducing a food delivery app in March of the same year. The strategy was to use its fleet of cabs and drivers for grocery deliveries between 9 am and 11 pm. However, both services were discontinued within nine months without detailed explanations.

In 2021, Ola made a comeback in the grocery delivery sector with Ola Dash, rolling out services in Mumbai and Bangalore through approximately 15 dark stores. Yet, after a year, Ola shut down Ola Dash and discontinued operations of all its dark stores.

Last year, Ola joined ONDC to provide food delivery services. “Our partnership with ONDC is thriving, and we’ve achieved remarkable 10X growth in recent months. We plan to continue leveraging the ONDC platform to explore new opportunities for our next growth phase,” Moneycontrol said, citing an Ola spokesperson.

Driving e-commerce and inclusion

The government’s initiative through ONDC aims to expand e-commerce penetration in India to 25 per cent within the next few years, targeting a gross merchandise value of $48 billion. Large corporate entities and philanthropic organisations, such as Nasscom Foundation and JSW Foundation, are contributing to the development of the ONDC ecosystem. 

They are providing vocational training, building user-friendly technology stacks, and offering on-ground support as part of their strategic priorities. These organisations are also channelling their CSR resources to fund necessary capital investments for the network, noted the Moneycontrol report.

Last year, Hindustan Unilever, India’s leading consumer goods company, committed to onboarding 1.3 million kirana stores onto the ONDC network. Additionally, the Bill and Melinda Gates Foundation has partnered with ONDC to support one million women entrepreneurs, enhancing their earning potential by over 25 per cent.

ONDC achieves record transaction growth

The ONDC is approaching a significant milestone, expected to surpass 10 million transactions—including mobility and retail—for the first time in June, marking a 5x year-on-year growth. In May, the network achieved a new peak with five million retail orders, up from 3.59 million the previous month. The government-supported network also recorded an all-time high of 200,000 retail transactions in a single day during May, according to sources cited by Moneycontrol.

Over the past several months, there has been a shift in ONDC’s retail transactions. While food delivery orders have declined, other categories such as grocery, fashion, home, and kitchen have seen increased activity.

In the past year and a half, several emerging companies, including Paytm, Ola, PhonePe, Meesho, Magicpin, and Shiprocket, have joined ONDC, aiming to disrupt the dominance of major players like Amazon, Flipkart, Zomato, and Swiggy in India’s online retail sector.