ONDC shifts retail focus to logistics and mobility

The government-backed Open Network for Digital Commerce (ONDC) is shifting its strategic focus towards logistics, mobility, and transport while adopting a more targeted approach to retail. According to three people familiar with the strategy, the network's primary objective is now to aggregate farmers' produce online and promote made-in-India products through its DigiHaat initiative.

This marks a change from ONDC's earlier push, which heavily emphasized driving consumer orders in categories like food and grocery. Two sources said that approach risked making the open network resemble just another consumer marketplace. "Over the past four years, the fear was that ONDC was trying to become another e-commerce platform," the first of the three people told Mint. "The opportunity is to use interoperability to solve problems that individual platforms cannot solve efficiently."

Strategic shift and leadership

The strategic pivot follows a year of significant change at ONDC. Vibhor Jain took over as managing director and chief executive from T. Koshy in April 2025. Manoj Thakur joined as chief technology officer in February of the same year. The network has also raised ₹430 crore from strategic investors including Zoho, Uber, Paytm, National Stock Exchange, BSE Technologies, Amul, State Bank of India, and Punjab National Bank.

In a statement to Mint, ONDC said it now has "sharper conviction" about where it can create the most value, identifying retail, logistics, and mobility as key areas. The network, launched in April 2022, is focusing on using its interoperability to address structural gaps, such as digitizing fragmented retail supply chains and connecting merchants to multiple logistics providers.

The 'ONDC 2.0' retail playbook

ONDC's refined retail strategy, internally called "ONDC 2.0," is built on three key initiatives: DigiDukaan, DigiHaat, and DigiBazaar. Data accessed by Mint shows the network's Amazing India programme works with eight aggregators covering 1,500 farmer-producer organisations (FPOs) and over 50,000 farmers. DigiDukaan has expanded to more than 18,000 retailers across Hyderabad, Jaipur, and Mumbai.

These figures remain modest compared to ONDC's targets. The network's own estimates indicate India has over 14 million kirana stores, with procurement in much of the sector still manual. Instead of pushing local retailers to build standalone online shops, ONDC aims to make their existing inventory discoverable to nearby consumers. Its initial focus for this is electronics.

The other major retail bet is on the supply side. ONDC says farmers, artisans, and rural producers saw an 11-fold increase in order volumes during 2025-26 through network-based models. Its direct-to-consumer strategy seeks to give Indian brands access to multiple buyer apps without dependency on a single marketplace. DigiHaat's Swadeshi marketplace for made-in-India products aligns with this, connecting consumers with artisans, farmer groups, and Indian brands.

Food remains a part of ONDC's strategy, but in a more targeted way. Two sources said Flipkart has begun accepting food orders on the network, currently testing the service with a closed user group. A wider rollout is expected ahead of Flipkart's Big Billion Days sale.

Logistics and mobility scaling

The same interoperability approach is being applied to logistics. ONDC has more than 30 small and micro fleet operators on its FleetConnect platform, contributing over 22% of network orders. More than 80,000 merchants use ONDC logistics, with the network acting as a digital layer between merchants and multiple delivery providers.

However, the third source cited by Mint expressed a concern among industry executives: whether the new approach can generate sufficient volumes and sustainable economics for smaller operators at scale.

Mobility and ticketing present a different test. ONDC's FY26 annual report states the network help over 500,000 metro and bus journeys daily, handling around 30% of online public-transport transactions. More than 40 consumer applications carry public-transport ticketing via ONDC.

Here, the value proposition is less about creating another consumer destination and more about reducing the integration burden on transport authorities. "The opportunity is in fragmented supply, by bringing together operators that individually don't have the scale or technology to access digital demand," the third person said. Yet, inconsistent business models pose a challenge. The same source added that some operators "have capacity but no technology, so they cannot access consistent demand or demonstrate the reliability needed to grow."