ONDC Retail Fell 30%. Here’s What Your 2026 Budget Should Do

The order you’re still fulfilling was never the normal case

Between October 2024 and February 2025, ONDC’s retail orders fell from roughly 6.5 million a month to about 4.6 million — a decline of nearly 30% in four months. If you onboarded a seller app in 2023 or 2024 and watched your ONDC order count climb through that same window, you weren’t reading demand. You were reading a subsidy.

What actually changed, and when

ONDC didn’t announce a retreat. It quietly turned down the tap. Here’s the sequence that took a growth channel and made it a fee-based side listing in under a year.

PhonePe’s own leadership called the Pincode shutdown a matter of “distraction from core focus,” not an admission that ONDC retail failed — the company is preparing for a mid-2026 IPO and wanted the team on B2B tools instead. That’s their framing, and it’s a reasonable one. What’s harder to dismiss is the timing: a flagship consumer retail partner walked away from ONDC-powered shopping in the same year the underlying order volume it depended on had already been cut nearly in half.

The number that’s easy to misread

Here’s where most sellers doing 2026 channel planning get tripped up. ONDC’s headline transaction count looks enormous and still growing. It is. It’s also mostly not shopping.

Read the “500 million transactions” stat without the retail-versus-mobility split and you’ll walk into your 2026 budget meeting assuming ONDC retail is booming. It isn’t shrinking to zero either — 200,000+ merchants are still active. It’s smaller, fee-based, and no longer the mass-onboarding growth story it was pitched as in 2023–24.

What this costs you if you don’t correct for it

The cost isn’t abstract. It’s the photography, catalog formatting, and listing-optimisation hours you allocate to a channel based on a growth rate that already stopped.

Run your own numbers before you approve next quarter’s ONDC-specific photography budget. A shoot planned around 800 orders a month that turns out to be worth 360 doesn’t just look wasteful in hindsight — it’s a specific, avoidable rupee figure sitting in your Q1 spend.

The framework: don’t get burned by the next one either

ONDC won’t be the last “next big cheap channel” pitch you hear in 2026 — quick-commerce marketplaces and social-commerce plays make the same case every year. Before committing creative or catalog budget to any of them, run this checklist.

1. 1 Is the order volume subsidy-funded or organic? Ask the seller app directly what share of current orders involve a buyer-side discount or delivery credit. If they won’t answer clearly, treat the whole number as subsidy-driven until proven otherwise.
2. 2 What percentage of the platform’s total activity is actually the vertical you sell into? ONDC’s total transactions are ~500 million; retail’s share by early 2025 was closer to a third and falling. A platform’s headline scale means nothing if your category is the small slice.
3. 3 Has a major backed player already tested and exited this exact vertical? PhonePe — Walmart-backed, well-capitalised, no reason to quit early — shut its Pincode consumer app after 2.5 years. If a player with more data than you already left, ask what they saw.
4. 4 Is the fee structure stable, or still being set? ONDC introduced its ₹1.5 service fee only after the discounts were cut. A channel that changes its cost basis right after removing its incentive layer is telling you its unit economics for sellers are still being figured out — not proven.
5. 5 Would this channel survive your catalog budget without the discount? If the honest answer is no, list on it for free reach, but don’t commission dedicated photography or storefront design until the answer changes.

Before and after: what changed in the seller’s ledger

The channel didn’t disappear between these two columns. It got smaller, more expensive per order, and less suited to being anyone’s primary listing strategy. That’s a fine channel to stay on. It’s a bad one to build a dedicated creative budget around.

What still makes sense in 2026

None of this means quit ONDC. 200,000+ merchants and 50+ brands are still active across 150+ cities as of 2026 reporting — that’s real, ongoing retail activity, not a wind-down. What it means is proportional investment: keep your ONDC listing live using the same core assets you use on Amazon, Flipkart, and your own site, and reserve dedicated photography, storefront design, or catalog-refresh budget for channels where your order data shows durable, non-subsidised demand.

Amazon and Flipkart still run stable, publicly known referral-fee structures you can plan a full year of creative spend around — that predictability is worth more to a small team than a channel whose economics changed twice in twelve months.