Ola, the Bhavish Aggarwal-led ride-hailing giant, is set to re-enter the grocery delivery sector through the government-supported Open Network for Digital Commerce (ONDC) in the coming days. This move follows Ola’s significant success in the food delivery category on the same platform.
Currently, Ola ranks as the second-largest buyer-side platform in the food delivery segment on ONDC, trailing only behind Magicpin. The company processes between 15,000 to 20,000 food orders daily, capturing almost 30% of the demand in key markets such as Delhi-NCR and Bengaluru.
“Ola facilitates more than 30% of ONDC food orders in Bengaluru and Delhi-NCR, leveraging its core logistics expertise to offer EV-based logistics services at competitive prices to smaller sellers on the ONDC network,” shared a source familiar with the developments.
Ola’s venture into grocery delivery isn’t new. The company initially launched an online grocery store in Bengaluru in July 2015, following the launch of its food delivery app in March the same year. However, both services were discontinued within nine months. Ola attempted a comeback in 2021 with Ola Dash, launching services across Mumbai and Bengaluru through 15 dark stores. Despite initial success, Ola Dash was shut down within a year.
Last year, Ola joined ONDC to provide food delivery services, achieving remarkable 10X growth in recent months. The company plans to leverage the ONDC platform further to explore new growth opportunities.
The ONDC network, aimed at increasing e-commerce penetration in India to 25% within the next few years and reaching a gross merchandise value of $48 billion, has seen significant growth. It is expected to surpass 10 million transactions, including mobility and retail, for the first time in June, marking a fivefold year-on-year growth. In May, the network hit a new peak with five million retail orders, up from 3.59 million in the previous month.
While food delivery orders have declined, other categories such as grocery, fashion, home, and kitchen have seen increased activity on the ONDC platform. Companies like Paytm, Ola, PhonePe, Meesho, Magicpin, and Shiprocket have joined ONDC to challenge the dominance of major players like Amazon, Flipkart, Zomato, and Swiggy in India’s online retail sector.
With the government and various corporate and philanthropic organizations supporting the ONDC ecosystem, Ola’s re-entry into the grocery delivery market through this platform is poised to be a strategic move aimed at capturing a significant share of the online retail market.