New Delhi: Domino’s Pizza is preparing to join the Open Network for Digital Commerce (ONDC) and is currently working on integrating its technology to enable orders through the interoperable commerce network. Sameer Batra, President and Chief Business Officer of Jubilant FoodWorks, announced this during an earnings call on May 17, stating their intention to serve customers with Domino’s pizza wherever they are located. The company’s teams are currently focused on technology scoping and integration, and they are committed to launching on ONDC once the preparations are complete.
The ONDC, backed by the government, is seen as a potential threat to the duopoly of food delivery giants Swiggy and Zomato in the Indian market. While Swiggy and Zomato charge restaurant commissions ranging from 20 to 30 percent, ONDC’s commission currently stands at a lower 8-9 percent. ONDC aims to pass on the benefits of lower commissions to consumers by offering more affordable prices from participating sellers, including restaurants, grocery shops, and electronics brands. Earlier this month, when food prices listed on the ONDC network appeared to be substantially lower than those on Zomato and Swiggy, many viewed it as a positive development.
However, analysts and industry experts have raised concerns about the sustainability of the lower prices on ONDC. They argue that the recent price reductions may have been driven by large discounts offered by network participants such as seller-side apps, buyer-side apps, and ONDC itself. These discounts may not be viable in the long term.
It is well-known that Jubilant prefers to handle a larger portion of its orders through its own app in order to save on costs. Nonetheless, the company’s management has expressed its willingness to serve pizzas through any channel. Last year, Jubilant introduced a loyalty program called Domino’s Cheesy Rewards, which offers a free pizza to customers after they place six orders through the app. According to the company’s earnings report, enrollment in the loyalty program grew by 28.3 percent compared to the previous quarter, reaching 13.6 million, and loyalty program orders accounted for 45 percent of total orders in March 2023.
Jubilant, as the owner of the Domino’s franchise, has been distinguishing itself from competitors like Zomato and Swiggy by focusing on faster food delivery. Even when orders are placed through food aggregators, Domino’s has always handled its own pizza deliveries to ensure quality and meet the promised delivery time of 30 minutes. Now, the company is piloting 20-minute pizza deliveries in Bengaluru, leveraging its dense network of 175 physical stores. The plan is to gradually expand this quick service to 6-7 other major metro cities. Batra emphasized that faster deliveries would not only benefit customers but also result in higher earnings for delivery executives. By optimizing delivery routes, Domino’s aims to increase the number of orders each rider can handle per hour, leading to improved earnings.
Batra explained that Domino’s has set a guaranteed 20-minute delivery time, considering the average time of 7-8 minutes for delivery from the store to the customer’s location. This allows for approximately four deliveries per hour. While the company is currently not achieving that level of efficiency, there is significant potential for improvement. Domino’s pays its delivery workforce per delivery, and faster deliveries have been shown to significantly enhance the Net Promoter Score, resulting in increased customer satisfaction and loyalty. This has provided the company with confidence in pursuing its plans to optimize delivery times.
