Key Points:
Flipkart’s New Venture: Flipkart, owned by Walmart, plans to enter the food and beverage (F&B) market through the Open Network for Digital Commerce (ONDC).
Integration with ONDC: Talks between Flipkart and ONDC are in advanced stages. Flipkart will allow users to order from a wide range of restaurants via its app, integrating with ONDC’s existing sellers in the F&B category.
ONDC’s Role and Purpose: Launched by the Indian government in 2022 to provide more opportunities for small merchants and reduce the dominance of major e-commerce players like Amazon and Flipkart.
The government has asked both Amazon and Flipkart to set up ONDC storefronts to improve operational efficiency and support timely deliveries.
Operational Strategy: Flipkart will not need a dedicated fleet of food delivery personnel.
ONDC’s sellers in the F&B category will be accessible to Flipkart users, streamlining operations and reducing costs.
Market Impact: Customers may benefit from competitive pricing and convenience.
Integration is mostly complete as of February 2024, though the service is not yet active.
ONDC’s Growth: Recorded 8.9 million transactions in May.
Diversified its retail categories, with food orders accounting for around 20% of total retail orders in May, down from 76% a year ago.
Broader Industry Trends: Other major companies like Amazon, Ola, PhonePe, Reliance Industries, and Adani Group are exploring ONDC integration.
This reflects a significant transformation in the e-commerce landscape, emphasizing the importance of decentralized networks.
Flipkart Ventures into Food and Beverage Market via ONDC
Bangalore, India – Flipkart, the Walmart-owned e-commerce behemoth, is set to make a significant entry into the food and beverage (F&B) market through the Open Network for Digital Commerce (ONDC), according to a report from The Economic Times. This strategic move aims to broaden Flipkart’s service offerings and further diversify its business operations.
ONDC: A New Avenue for E-Commerce
Launched by the Indian government in 2022, ONDC was created as an alternative to dominant e-commerce players like Amazon and Flipkart. The platform’s mission is to level the playing field, providing more opportunities for small merchants while curbing the market dominance of larger entities. In an effort to bolster the network’s efficiency and operational effectiveness, the government has mandated that both Amazon and Flipkart establish ONDC storefronts on their home pages.
Flipkart’s Integration with ONDC
Flipkart’s integration with ONDC is reportedly in advanced stages, with executives from both parties working to finalize the deal. Once implemented, Flipkart users will be able to order from a variety of restaurants directly through the Flipkart app. This integration will enable customers to seamlessly order food alongside shopping for other items such as apparel and home accessories.
Interestingly, Flipkart’s entry into the F&B sector via ONDC will not require it to build a dedicated fleet of food delivery personnel. Instead, existing ONDC sellers in the food and beverage category will become accessible to Flipkart’s customer base. This streamlined approach is expected to make F&B operations more cost-effective by leveraging ONDC’s existing infrastructure.
Market Impact and Future Prospects
The entry of Flipkart into the F&B market through ONDC could have significant implications for the sector. Customers are likely to benefit from competitive pricing and the convenience of ordering food alongside other shopping needs. Although Flipkart has completed advanced stages of integration as of February 2024, the food-ordering service has yet to go live.
ONDC has shown steady growth since its inception, recording 8.9 million transactions in May. The network has diversified its retail business, expanding beyond food to include categories such as grocery, fashion, and home goods. In May, the food segment accounted for approximately 20% of total retail orders, a notable decrease from 76% a year earlier when food was the primary category.
Broader Industry Trends
The broader industry trend shows other major companies, including Amazon, Ola, PhonePe, Reliance Industries, and the Adani Group, also exploring integration with ONDC. This shift indicates a significant transformation in the e-commerce landscape, with more players recognizing the potential of a decentralized network to enhance their service offerings and reach.
In conclusion, Flipkart’s impending entry into the F&B market via ONDC marks a strategic expansion that could reshape customer experiences and market dynamics. By leveraging ONDC’s infrastructure, Flipkart aims to provide a more comprehensive shopping experience, underscoring the growing importance of integrated e-commerce platforms in today’s digital economy.
