PhonePe’s E-commerce App Pincode Discontinuing Services in Fashion, Grocery, and Electronics on ONDC

Pincode ONDC

Three points you will get to know in this article:

  • PhonePe’s E-commerce App Pincode Discontinuing Services in Fashion, Grocery, and Electronics on ONDC
  • Pincode offers food delivery on government network; PhonePe app offers ticket booking on ONDC.
  • Pincode app’s inferior customer experience compared to other delivery apps prompted the company’s decision.

Phonepe's Shift in ONDC Strategy

A year after fintech leader Phonepe introduced Pincode on the Open Network for Digital Commerce (ONDC), the popular ecommerce app is making some changes. It’s stepping back from various sections like fashion, grocery, and electronics on the network.

Starting this Tuesday (April 23), Pincode will solely focus on food delivery services within the government-supported network. Meanwhile, the PhonePe app will handle only ticket bookings through ONDC, according to The Economic Times.

Pincode's Restructured Focus

Quoting an internal ONDC note, the publication mentions, “PhonePe Payment Technology Services Private Limited (Pincode) has decided to stick to Food and Unreserved ticket booking domains on the ONDC registry for now, with plans to explore other domains in the future after some internal adjustments.” “As of April 23, 2024, Pincode will be removed from all domains except Food and Unreserved ticket booking,” the statement read.

It’s worth mentioning that PhonePe introduced the Pincode app in Bengaluru back in April 2023, aiming to offer locally made groceries, pharmaceuticals, clothing, food, and tech products through the ONDC platform.

Fast forward to July of the same year, Pincode expanded its reach to 10 major Indian cities, including Mumbai, Delhi, Noida, Gurugram, Chennai, Hyderabad, Ahmedabad, Pune, and Kolkata.

PhonePe's E-commerce Strategy Shift

The decision by PhonePe to limit its offerings on ONDC indicates a shift in its e-commerce strategy. According to sources cited by ET, the move stems from the company’s desire to address subpar customer experiences on Pincode in comparison to other delivery apps.

The incorporation of pin codes stands as a crucial element in PhonePe’s strategic blueprint for broadening its array of services. Bolstered by ample resources, the company has rolled out several new services in recent times with the ambition of evolving into an all-encompassing super app.

Diversification and Expansion

Today, reports surfaced of the Walmart-owned enterprise injecting over INR 800 Cr into its subsidiaries, which encompass PhonePe Insurance Broking Service and PhonePe Wealth Broking, within the past year.

Simultaneously, Indus Appstore, the Android app marketplace under its umbrella, introduced a voice search feature powered by AI in 10 Indian languages, marking yet another step to enrich its user experience.

PhonePe’s strategic shift entails focusing Pincode solely on food delivery and unreserved ticket booking within the ONDC network while stepping back from other sections. This decision reflects the company’s inclination to address customer experience concerns and the ambition to explore other domains after internal adjustments. The evolution of Pincode, from its inception in Bengaluru to expansion in 10 major Indian cities, underscores its rapid growth in digital commerce. Furthermore, PhonePe’s substantial investments in subsidiaries and the introduction of new features in its Android app marketplace display a broader strategy of diversification and an enhanced user experience.

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