ONDC revamps incentive structure shedding discounts
By MYBRANDBOOK
The government-backed, Open Network For Digital Commerce (ONDC) has announced a revamped incentive programme, ending the first phase of its discounting schemes effective May 31. The platform's Incentive Program 2.0 will come into effect on June 1, the network will offer two kinds of incentives—one for seller network participants for onboarding quality sellers, and the other for boosting transactions to be rolled out through buyer network participants.
Confirming the broader plan for the second phase of the network’s incentive programme, ONDC Chief Business Officer Shireesh Joshi said, “The primary purpose (of the incentives) was for people to understand that unbundled commerce works. It was never about the price. At no point do we expect the floodgates to open for incentives–not now, not ever. We will maintain some stimulus, while at the same time, we don’t want to make it the reason for business to happen.”
ONDC’s decision to moderate its incentives programme follows shortly after Commerce and Industry Minister Piyush Goyal made it clear that the government was not in favour of incentivising orders placed on the network to compete with other consumer internet apps.
Buyer-side apps such as Paytm and Phonepe-backed Pincode will now be able to tweak the incentives based on time of the day, day of the week, and other levers. Also, ONDC has capped the minimum order value to Rs 200 for food and beverages, and Rs 300 for all other categories, including shipping charges. This was missing in the previous incentive structure. But among the most significant changes is a cap on the maximum incentive per order to Rs 100, whereas the earlier structure allowed potential discounts of up to Rs 125 per order. This earlier scheme was as per the first phase of the incentive programme that had come into effect on March 7 as an amendment to the initial January 30 notification.
Another huge rollback on discounts is that a buyer will now be eligible for incentives only on a maximum of five orders per month. This is in sharp contrast to the previous incentive structure, under which a buyer could avail of a discount of Rs 50 on each of three orders per day on any ONDC buyer app. Under the previous programme, ONDC had also allowed seller apps to offer free delivery of up to Rs 75 that they could later get reimbursed.
The new scheme does not mention any incentive to facilitate free deliveries by seller apps. The discount on delivery charges will now likely have to be claimed by buyer-side apps as part of the Rs 100 maximum discount per order.
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