India’s much-hyped Open Network for Digital Commerce (ONDC), designed to be the UPI of e-commerce, is showing signs of promise—but also fatigue. Despite efforts to broaden participation and deepen reach, cracks are becoming visible.
A new LocalCircles survey reveals a mixed reality: only 15% of e-commerce users used ONDC to place an order in FY25 so far. While that’s a 20% jump from the previous year, the scale is still modest for a network that aims to democratise Indian e-retail.
More worryingly, 54% of those who tried ONDC found it cumbersome to use, up from 44% the previous year. That’s a rising dissatisfaction curve in a space where user experience is everything. 35% flagged poor customer service, a critical gap when compared with incumbents like Amazon and Flipkart, who invest heavily in post-sale experience.
To its credit, ONDC is making strides: 62% of users now say they get better value on ONDC than on other platforms, up from just 31% a year ago. And the dissatisfaction with customer service has dropped from 44% to 35%, indicating improvement. But the numbers still point to a half-built bridge.
Behind the scenes, incentives have dried up. ONDC’s monthly payout cap to partners has dropped from ₹3 crore to just ₹30 lakh, weakening the discount-led momentum it initially relied on. The exit of players like PhonePe’s Pincode and Paytm pulling back ONDC visibility on its app have not helped sentiment either.
From a peak of 6.5 million orders in October 2024, retail volumes dropped to 4.6 million by February 2025. Clearly, the network’s early growth curve was subsidy-led—and what we’re now seeing is the platform’s true product-market fit under test.
