Domino’s is preparing to join the Open Network for Digital Commerce (ONDC) as it completes technological integration to begin accepting orders on the interoperable commerce network, according to a top Jubilant FoodWorks executive during an earnings call on May 17.
“We want to jump on the ONDC bandwagon.” We’re getting ready to deploy it on ONDC. We aim to provide Domino’s pizza to consumers wherever they are… Our teams are now working on technology scoping and integration. “We will get into ONDC in whatever time it takes,” said Sameer Batra, Jubilant’s president and chief business officer.
The government-backed interoperable commerce connection is considered as posing a challenge to Swiggy and Zomato’s duopoly in the Indian food delivery business. While the platform commissions charged to restaurants by the pair might vary from 20% to 30%, the same on ONDC is now about 8-9%.
According to ONDC, decreased network commissions will translate to cheaper pricing as vendors such as restaurants, grocery stores, and electronics manufacturers are anticipated to pass on the savings to customers. When the network’s food listing costs looked to be far cheaper than Zomato and Swiggy earlier this month, many saw it as proof of the pudding.
However, analysts from various brokerage firms and industry specialists have pointed out that the recent lower prices on ONDC were due to large discounts offered by network participants such as seller-side apps, buyer-side apps, and ONDC itself — which may not be sustainable in the long run.
However, it is not knowledge that Jubilant wants to service more orders directly through its own app to save money, even if the company’s management has stated that it would like to provide pizzas through any channel.
Jubilant launched a reward scheme last year, offering clients a free pizza after placing six orders via its smartphone. Enrollment in the loyalty program, known as Domino’s Cheesy Rewards, increased by 28.3 percent over the previous quarter to 13.6 million, with the loyalty order contribution reaching 45 percent in March 2023, according to the company’s results report released earlier this week.
Betting on quick deliveries
On food delivery times, Domino’s franchise owner outperforms Zomato and Swiggy. To be sure, the firm has always done its own pizza deliveries, even when orders are submitted through food aggregators, in order to monitor quality and fulfill orders within the advertised 30-minute time frame.
It has already begun testing 20-minute pizza delivery in Bengaluru, where the brand has a dense network of 175 physical locations, with hopes to progressively expand this fast service to 6-7 other big metro areas.
On the analyst call, Batra stated that this will result in higher earnings for the company’s delivery leaders. The strategy is similar to what every hyperlocal commerce platform would tell you: speedier delivery implies that each rider may complete more orders per hour, resulting in higher revenues.
“We have guaranteed 20 minutes when we believe the appropriate time from the store to the customer location is approximately 7-8 minutes.” So, if you add 7-8 minutes (for returning from the client location to the pizza restaurant), you may theoretically accomplish four deliveries every hour. We are clearly not at four by then. So there is a lot of potential to be more efficient,” Batra explained.
“Besides, we pay this labour on a per-delivery basis… It boosts the Net Promoter Score by 500 to 1,000 basis points from the consumer’s perspective… We’ve seen this rise if you do it on a consistent basis, so we’re confident,” he added.
