Online platforms see 30 pc fall in CoD orders

Press trust of India

New Delhi, Nov 16: The discontinuation of old Rs 500 and Rs 1,000 notes led to up to 30 per cent fall in cash-on-delivery (CoD) orders from e-commerce platforms such as Snapdeal, Flipkart and Shopclues in the aftermath of the surprise announcement.

However, top leaders of these e-commerce companies welcomed the government’s decision saying this would have a positive impact on their businesses and the overall economy in the long-term.

“There was a drop in sales when the announcement was made. There were cancellations of CoD orders but it’s recovering now,” Flipkart co-founder Sachin Bansal said.

The company is now seeing more people opting for digital payments routes to pay for their orders, he said at the Digital India Foundation event.

Echoing the sentiment, Snapdeal co-founder Kunal Bahl said CoD orders on its platform have come down to 30 per cent of the overall sales.

“At some point in time, it was at 70 per cent and then it came down to 50 per cent. After the announcement, it is now at about 30 per cent. While it might go up a bit, we expect the ratio to hover around the current level,” he said.

Snapdeal, which also runs mobile wallet company Freecharge, said it has seen a strong growth in transactions through digital payments.

Volumes have grown significantly for Freecharge too, Bahl said adding that higher adoption of digital payments will also help improve unit economics for e-commerce companies in the long run.

“What is important is that we (industry) will have to make digital payments more convenient, secure and rewarding for consumers,” he said.

Mobile wallet companies like Paytm, Freecharge and Mobikwik expect to see a strong pick up in userbase as well as transaction sizes in the coming months.

Following the announcement November 8, firms like Amazon and Paytm temporarily halted CoD facility for customers. Others like Flipkart and Snapdeal set limits to the value of orders that can be delivered through the service.

While Amazon has already resumed the service, Flipkart re-started the service today.

The company said it has witnessed strong movement towards electronic transactions and to encourage customers to adopt these payment modes, it is introducing wallet cashbacks, which are being actively used by multiple sellers and brands.

According to industry estimates, about 70 per cent of the shoppers were earlier opting for cash while buying a product.

While the industry has been pushing for digital payments, many customers opted for CoD for reasons ranging from not being comfortable using digital payments like credit/debit cards to wanting to see the product before paying for the same.

The cost is also higher for CoD returns at about Rs 20 in urban areas and about Rs 75 for non-urban locations.














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