ONDC losing steam: Though more eCommerce users tried using ONDC in the last 12 months, 54% still found it cumbersome and 35% found customer service lacking

May 1, 2025, New Delhi: The National Restaurant Association of India (NRAI) is reported to have had a rethink about going onboard government-backed Open Network for Digital Commerce (ONDC), citing operational instability and a lack of strategic commitment from the platform.

From a peak of 6.5 million in October last year, retail orders on government-backed Open Network for Digital Commerce (ONDC) have fallen to 4.6 million in February this year following a reduction in incentive payouts to participants such as Paytm, Ola Consumer and other smaller players, which use these funds to offer discounts.

ONDC initially provided financial incentives to onboard sellers, drive transactions, and fund customer discounts and offers. However, it has reduced this assistance over recent months, with the monthly incentive cap dropping from INR 3 crore in July to around INR 30 lakh now.

Though the ONDC has crossed 200 million total orders on its network across retail, logistics and mobility, monthly data shows that retail orders have begun to decline with onboard sellers leaving it. Walmart-backed PhonePe's grocery delivery service Pincode exited ONDC last year while Paytm, one of the early proponents of the open network, has removed the ONDC shopping icon from its app's home page.

The platform, which has empowered small businesses nationwide, currently has over 200 participants, 700,000 sellers, and its reach across 600 cities. Unlike traditional e-commerce platforms, ONDC's decentralized model enables seamless transactions across platforms, levelling the playing field for small and medium-sized businesses and local enterprises.

Since its inception in 2021, ONDC has facilitated over 150 million transactions. Its monthly transactions peaked at 14.4 million in November 2024, with expectations of reaching 30 to 40 million by end of the current financial year. While diversifying in the domestic market with different products and services, ONDC aims to go beyond domestic commerce and facilitate global trade, enabling cross-border transactions and helping Indian businesses tap into international markets.

An initiative of the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry, the network has also joined forces with the Bill & Melinda Gates Foundation along with two Seller Network Participants (SNP’s) — Samhita Social Ventures and Samhita Good CSR Pvt. Ltd, to create ecosystems that support women-led enterprises.

Given a sizeable number of consumer discussions and grievances on the ONDC platform, LocalCircles conducted a survey to find out what are the consumers using its services for and whether it is meeting their expectations. The survey received over 31,000 responses from consumers located in 319 districts of India. 62% were men while 38% respondents were women. 41% respondents were from tier 1, 36% from tier 2 and 23% respondents were from tier 3, 4 & rural districts.

15% of eCommerce users surveyed have used ONDC platform to order something in 2024-25

Given the growth of ONDC, the survey asked online consumers, “What all have you used the Government’s eCommerce platform ONDC for in the last 12 months?” Some among 15,963 who responded to the question indicated more than one option with 83% stating that they have “never used it”. However, 8% of those who responded to the question stated “to order food”; 13% stated “to order taxi services”; 5% of respondents stated "to order other goods” not specified; 8% of respondents stated "to order other services”; and 2% of respondents did not give a clear answer. To sum up, only 15% of eCommerce users surveyed have used the ONDC platform to order something in 2024-25.

eCommerce users who used ONDC to order something has risen nearly 20% in the last 12 months

When comparing the data, 12% of eCommerce users who had used ONDC platform to order something in 2023-24, in 12 months the percentage of users has increased to 15%, which is a growth of nearly 20%.

62% of those who have used ONDC in 2024-25 to order something found the products to be better value than other eCommerce platforms; 54% found the platform cumbersome to use while 35% found it lacking in customer service

ONDC has a diverse range of marchants, products and services being offered on its platform. The survey next asked, “What were all your experiences with the ONDC platform in the last 12 months?” Some among the 15,364 consumers who responded to the question indicated more than one option. The largest group of 62% respondents indicated “prices of products were better value than other eCommerce platforms”; 54% of respondents indicated “was cumbersome to use as compared to other eCommerce platforms”; 35% of respondents indicated that the “customer service was lacking as compared to other eCommerce platforms”; 19% of respondents indicated that “customer service was similar to other eCommerce platforms”; 19% of respondents indicated “prices of products were similar to other eCommerce platforms”; 8% of respondents indicated “the prices of products were more expensive than other eCommerce platforms” and 8% of respondents indicated it “was similar to use as other eCommerce platforms”. To sum up, 62% of those who have used ONDC in 2024-25 to order something found the products to be better value than other eCommerce platforms; 54% found the platform cumbersome to use while 35% found it lacking in customer service.

Consumer perception of ONDC improves in the last 12 months: Twice as many say they find prices lower and customer service somewhat better in comparison to 2023-24; 1 in 2 still find it cumbersome to use though

There is considerable difference in perception and experience of consumers who have been using the ONDC platform. There is more satisfaction as 62% of consumers surveyed say there is “better value” as against 31% in 2023-24. Similarly, the percentage of those dissatisfied with “customer service” has slipped from 44% to 35%. However, on the flip side 54% currently find ONDC platform more “cumbersome” as against 44% one year back.

In summary, the growth of online consumers using ONDC platform to buy something has risen nearly 20% in the last 12 months from 12% of those surveyed to 15% currently, However, the growth is still slow. The survey finds that while consumer perception of ONDC has improved in the last 12 months with 62% of those who have used ONDC in 2024-25 to order something finding the products to be better value than other eCommerce platforms, however, 54% found the platform cumbersome to use while 35% found it lacking in customer service. In the last 12 months, the level of satisfaction has risen as 62% of consumers surveyed say there is “better value” as against 31% in 2023-24. Similarly, the percentage of those dissatisfied with “customer service” has slipped from 44% to 35%. However, on the flip side 54% currently find ONDC platform more “cumbersome” as against 44% one year back.

LocalCircles plans to share the survey results with the government so that the ONDC loopholes can be plugged and the customer experience can be improved. The UPI version of commerce, ONDC needs to exist and become robust to be a sizable force in the eCommerce landscape of India.

Survey Demographics

The survey received over 31,000 responses from consumers located in 319 districts of India. 62% were men while 38% respondents were women. 41% respondents were from tier 1, 36% from tier 2 and 23% respondents were from tier 3, 4 & rural districts. The survey was conducted via LocalCircles platform, and all participants were validated citizens who had to be registered with LocalCircles to participate in this survey.