Three years ago, a global pandemic flipped the world upside down, bringing a significant transformation to our food consumption habits. Online food orders witnessed a surge, and restaurants ventured into a new avenue for making revenue. But the reality was not as rosy as it appeared at first glance. Hefty commissions, delivery fees, and promotional costs to spotlight your restaurant impacted its profitability. All seemed lost because you had to pay a heavier price, quite literally, just to secure a few extra orders. Is there perhaps a superhero somewhere to rescue you from these constraints? Fortunately, there is! Presenting to you, ONDC for restaurants!
ONDC, or Open Network for Digital Commerce, is an e-commerce initiative launched by the Indian government to combat the high commission fees charged by food aggregator apps. It is said to be the next digital revolution, on par with the UPI (United Payments Interface) initiative. Now you might be wondering: what is ONDC?, why should I join ONDC, and how do I do so? We’ve got you covered, so keep reading!
Contents
- What is ONDC?
- Benefits of ONDC for Restaurants
- ONDC vs Other Food Aggregators
- How to Onboard My Restaurant on ONDC?
- How can Gofrugal help you transform digitally?
What is ONDC?
Open Network for Digital Commerce (ONDC) is a not for profit e-commerce platform launched by the Indian Government, connecting buyers, sellers, and logistics partners under one roof. ONDC aims at helping sellers reach a larger customer base and maximize their profits at a minimum cost. Consumers can now place orders for any dish of their choice, from burgers to biryanis, on everyday apps such as Paytm, Pincode (by PhonePe), IDFC, etc.
You can strengthen your online presence by opting for ONDC food delivery. ONDC helps in creating effectual awareness for your restaurant without having to incur additional digital marketing expenses or worry about the logistics involved in making faster food deliveries. This empowering platform has sowed its seeds by integrating with the Retail and Restaurant industries and is poised to grow rapidly to other sectors such as tourism, hospitality, travel, etc.
Benefits of ONDC for Restaurants
Small and medium business owners can fight against the heavy commissions charged by food aggregators by adopting ONDC, a coming-of-age platform that empowers your restaurant business. Here are 3 key reasons why you must adopt ONDC food delivery for your restaurants:
1. Lower costs, higher profits
ONDC food delivery benefits both your customers and yourself. According to a Gofrugal consumer research study conducted in 2022, 86% of respondents agreed that the pricing on online food delivery apps had skyrocketed. Hefty commission rates, delivery charges, and other promotion-related fees were discovered to be the primary causes of the price increase, influencing both people’s perception and your profitability.
ONDC arrived as a savior to redeem your business and revitalize your profitability. Third-party food aggregators typically charge high commission rates ranging from 25% to 30%, which can greatly impact your profit margins, especially if you are running a smaller restaurant business such as a food truck or a cloud kitchen. In comparison, ONDC operates with a significantly lower 3% referral fee for finding you a potential buyer. This translates to a commission charge that is approximately 8 to 10 times lower than the industry average rate!
ONDC also helps you eliminate differential pricing for online orders. Your customers can enjoy your delicacies at the same price – whether they’re dining at your restaurant or eating in the comfort of their own homes!
2. Fortify your online presence
ONDC offers you an incredible opportunity to strengthen your online presence and make it effortless for customers to discover your delicious offerings! You can reach out to a larger audience with the help of ONDC food delivery. Unlike other food aggregator apps that require an additional fee to spotlight your restaurant on the top picks, ONDC provides a location-based highlighting feature, i.e., customers can quickly find your restaurant based on their proximity to your location. Thus, the chances of attracting customers who are actively seeking food delivery in your area are increased. The best part? You don’t have to incur any additional expenses!
Aside from boosting your online presence, you can easily establish a digital storefront with ONDC. You can enable customers to browse through your offerings, know more about the products, complete their orders, and track the estimated delivery time – similar to a third-party food aggregator app. The significant feature of ONDC is the freedom it provides you to define your offerings. You can set your policies when it comes to pricing, delivery, or processing returns.
3. Gain transparent access to customer data
The crown jewel benefit of ONDC for you is the unparalleled transparency it offers in terms of customer data, transactions, and commission costs. As a restaurant owner, you understand the challenges posed by the lack of customer data provided by third-party food aggregators. Crucial details such as customer addresses are often masked, limiting your ability to nurture relationships with your patrons. Furthermore, as mentioned earlier, hidden fees charged by these aggregators can catch you off guard. ONDC provides a comprehensive solution that addresses all these concerns seamlessly.
With ONDC, you gain valuable access to customer data, empowering you to delve into customer preferences, order history, and demographics. This information becomes your key to better understanding your customer base, discovering emerging trends, and personalizing the overall customer experience. ONDC also adheres to privacy and data protection regulations, to ensure the data you receive from your customers is with their consent. You also gain insightful visibility on your sales and revenue data, including details such as order value, payment method, and order fulfillment status. You can effortlessly track and analyze your commission costs for every transaction facilitated on ONDC.
ONDC vs. Other Food Aggregators
According to an article by Inc42, the emergence of ONDC is a potential game-changer for the restaurant industry in India. Compared to other food aggregators, ONDC promises a more transparent platform for processing online food delivery orders. Here are a few key advantages that ONDC has over other food aggregators:
1. Lower commission fees
You can benefit from lower commission fees while using ONDC for your restaurants. This means that your costs associated with processing online orders are reduced. You can enjoy retaining a higher percentage of your sales and increasing your restaurant’s profitability.
2. Enhanced control over business
With ONDC for restaurants, you will have more control over your business operations and online presence. By creating your digital storefront, you can directly interact with your customers. This ensures an accurate depiction of your brand and the ability to nurture direct relationships with your customers.
3. Improved customization
You can enjoy greater flexibility in terms of customizing your menus, pricing, and promotions. You can easily update your menus, make pricing adjustments, and run tailor-made promotions based on specific market trends. This enables you to adapt better to market trends and customer preferences.
4. Stronger online presence
You no longer need to rely on a single platform to process online orders. ONDC connects you with multiple buyer apps and platforms, helping you to expand your reach and gain independence from third-party food aggregators. ONDC can also help you gain more local exposure and attract customers who are specifically looking for nearby dining options.
5. Access to transparent data
ONDC for restaurants provides you with an incredible advantage when it comes to accessing customer data. You can enjoy greater control and ownership over customer data, helping you unlock the potential of data analytics and insights. Using these insights, you can make well-informed business decisions, understand your customers’ behaviors, and personalize their experiences. This will also help you stay abreast of the latest trends and ahead of the competition!
How to onboard my restaurant on ONDC?
Onboarding your restaurant to ONDC is pretty much child’s play. There are 2 main pre-requisites for completing your onboarding journey:
1. A seller platform
As a restaurant owner, the first requirement you must invest in is a seller platform. All relevant product information, such as pricing, images, and offers, is displayed on the buyer apps directly from your seller platform. This provides you with complete control over what customers see when browsing your offerings. You’ll also be able to manage all operational aspects such as sales orders, payments, and deliveries from your seller platform. This brings us to the next question.
How do you choose a seller platform?
Here are a few thumb rules you can use to evaluate the ideal seller platform for your restaurant:
- Seamless onboarding and user-friendly interface which ensures ease of use
- Capability to support your business operations and aspirations in the long term
- Ability to facilitate omnichannel presence through a single platform for pricing, inventory, and customer management
- A comprehensive end-to-end solution that offers you a hassle-free experience, from selling to billing to filing
Choosing the right seller platform will help you thrive in the long run, and you can make the most of the opportunities on ONDC by partnering with us. As a leading seller platform on ONDC, not only do we help in easier onboarding, but also in digitizing your store, inventory, and operations efficiently and cost-effectively.
2. An active GST
You would also require an active GST number. That’s all.
Once your verification process with ONDC has been completed, a unique key will be generated, which will be linked to your GST – establishing your unique identity on the network. Then, we will help you with creating your merchant account – complete with your shop name, menu, and bank account details for receiving payments. You can showcase your dishes on popular buyer apps like Paytm, Pincode by PhonePe, etc. Ultimately, your store will become the hero of ONDC.
Through these buyer apps, customers will come directly to you, allowing you to expand your customer base and increase sales. To join this e-commerce revolution like many of your peers, all you need to do is partner with Gofrugal. We invite you to join us and capitalize on this opportunity to expand your customer base. You can also sign up for a 15-day free trial of our restaurant management system with ONDC integration.
As a seller, there will be a net buyer-finder fee of 3.54% (inclusive of taxes) on the cart value that you will need to pay to PayTM (this fee may vary with each buyer app). With over 60 buyer apps set to join the ONDC e-commerce revolution, this fee is expected to stabilize and become even more attractive for you, allowing you to leverage the growing demand for your products.
How can Gofrugal help you transform digitally?
Onboarding on ONDC is just the beginning of the many benefits you can enjoy by partnering with us. By joining forces with us, you can gain access to comprehensive digital solutions to manage your business seamlessly, both online and offline! Our restaurant management system equips you with essential modules for managing sales, purchasing, inventory, orders, customer loyalty, and delivery – all in one place.
You can truly achieve an omnichannel transformation with us, ensuring that your customers enjoy a smooth and consistent experience – irrespective of the way they choose to do business with you. Our team provides 24/7 support to facilitate a smooth transition to our platform. We also offer customized integrations that are aligned perfectly with your restaurant’s needs.
Partner with us today and embark on a transformational journey on ONDC. Explore new opportunities with ONDC for restaurants by unlocking the full potential of this superhero today!
