How does Ola Foods (powered by ONDC) work?

4 min readSep 28, 2024

Ola has recently entered the Food and Grocery business in collaboration with ONDC, let’s see how!

What is ONDC?

ONDC (Open Network for Digital Commerce) is an Indian government-backed initiative aimed at promoting open, interoperable, and decentralized networks for e-commerce. It seeks to break the monopolistic hold of major e-commerce platforms by enabling small retailers and businesses to connect directly with consumers. The idea is to create a level playing field, ensuring that sellers of all sizes have access to digital commerce through a standardized, technology-driven approach, fostering growth in local and regional markets.

What are the different types of players on ONDC?

ONDC identifies 4 types of players — Buyer Network Participant, Seller Network Participant, Technology Service Provider and Gateway. In an unbundled network, there needs to be a seamless interaction between all participants to facilitate end-to-end e-commerce transactions. Each role is explained below.

1. Buyer Network Participant’s Role on ONDC

Connects buyers to the ONDC network via a buyer application and shoulders buyer-facing responsibilities such as customer support, ensuring a seamless shopping experience, and providing a single checkout experience across categories.

Any business with a strong customer base can join ONDC as a buyer network participant.
This can be through your existing application, a white-labelled app, voice assistant, chatbot, or any interface which can integrate with the network, and fulfil the feature requirements mentioned below.
Buyer network participants can also choose to partner with a technology provider to create a buyer-facing interface integrated with ONDC.

Eligible buyer applications must fulfil the following feature requirements on their platform:

Parse buyer search requests into relevant fields and search the network for qualifying products on the network that fully/partially meet the search request.
Display search results following the identifying criteria (closest store, product category, etc.).
Display data aggregated from the network, such as rating catalogue information (features, FAQ, specifications).
Allow the buyer to add to the cart from multiple sellers/seller apps.
Allow the buyer to select delivery options if more than one exists for the chosen seller/seller app.
Check out (and pay) to initiate a purchase.
Confirm the order with the seller app/seller and send confirmation to the buyer with the order ID.

2. Seller Network Participant’s Role on ONDC

A Seller Network Participant is responsible for connecting sellers to the ONDC network through a seller application. They are also responsible for digitizing the seller’s catalogue and dispersing payments. Additionally, they must train sellers on best practices in e-commerce to ensure quality fulfilment and provide a positive buying experience for customers.

A Marketplace Seller Node (MSN) does not produce or manufacture any inventory of its own. It acts as a marketplace to offer goods and services that are provided by sellers.
Inventory Seller Node (ISN) is any application operated by a seller who produces or manufactures and sells its own inventory. It doesn’t include products/services by other sellers.

3. Gateway’s Role on ONDC

Gateways are essential components in an open-network ecosystem, serving as technology providers to ensure that all sellers in the ONDC Network can be discovered. They facilitate multicasting by forwarding search requests from buyer applications to all seller applications and vice versa, as specified in the ONDC Network Policies. The Gateway service enables manual searches by end consumers by providing relevant product/service information from ONDC’s seller universe.

4. Technology Service Provider

Technology Service Providers (TSPs) are crucial in offering a range of software applications either as standalone solutions or via cloud-based services. As an outsourced software provider, TSPs enable seamless business operations on the network, empowering players to participate in e-commerce without requiring in-house technology capabilities. TSPs also serve as drivers for achieving ONDC goals and attracting businesses of various sizes to join the network.

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This lets you:

Streamline your business operations
Slash in-house tech hassles
Scale & succeed effectively

Now that you know about ONDC and the various roles the participants can play, let's dig deep into how Ola acts as a participant to power Ola Foods.

Breakdown of Ola Foods:

Buyer Network Participant: Ola

Ola is a Buyer Network participant and connects buyers to the ONDC network via the Ola app used by millions of customers.

Technology Service Provider: MagicPin

Ola chose to partner with MagicPin to create a buyer-facing interface integrated with ONDC. MagicPin provides an interface that allows buyers to search and order food on the platform.

Gateway Role: Beckn

The Beckn Protocol plays a foundational role in ONDC (Open Network for Digital Commerce) by enabling participants — such as buyers, sellers, and logistics providers — to interact effectively within a decentralized network.

Seller Network Participant: MagicPin

MagicPin is a marketplace seller node that integrates multiple sellers through a seller portal and brings them to the ONDC network.

Right now, ONDC allows logistics management by the seller network participant and hence MagicPin is responsible for the provision of food delivery logistics on Ola Foods.

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