Bhavish Aggarwal's Ola eyes grocery and fashion foray on ONDC, says Report

Ride-hailing giant Ola is set to expand its services by offering its customers the ability to shop for groceries as well as fashion and apparel items through the Open Network for Digital Commerce (ONDC) via its app.

According to an ET report, The move will allow the company to broaden its e-commerce offerings beyond its current food and beverage options available through ONDC, serving its base of 75 million monthly active users.

How will this expansion benefit Ola and its users?

The report said that integrating ONDC into its app for grocery and fashion services aims to make its e-commerce operations more cost-effective.

Unlike traditional models that require a company to maintain a fleet of delivery personnel or persuade brands to join their platform, using ONDC will enable Ola to directly connect with thousands of grocers and fashion retailers already on the network.

The integration is expected to reduce operational costs and simplify logistics, especially since Ola also provides logistics services on ONDC.

What does the ONDC integration involve?

With the ONDC integration, Ola will not have to establish its own network of grocery and fashion sellers but will connect with existing sellers on the ONDC platform. This includes access to over 380,000 sellers, 105,000 of whom are from non-mobility sectors such as groceries and fashion. 

The development aligns with Ola’s strategy to horizontally scale its offerings and increase its presence in the e-commerce domain without the heavy logistical demands of traditional retail setups.

What are the financials behind Ola's new ventures?

The integration comes at a time when Ola's financial performance shows promising trends. In the fiscal year 2023, the company's total revenue rose by 58%, reaching Rs 2,135 crore, while its overall loss decreased by 65% to Rs 1,082 crore.

Moreover, the move is expected to leverage Ola's existing infrastructure as a logistics provider on ONDC, potentially lowering costs further and improving efficiency.

Ola plans to aggressively expand its logistics services to other seller applications on the ONDC network following a successful pilot.