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Cash on Delivery in India's E-Commerce

In: Business and Management

Submitted By Rindurk
Words 3764
Pages 16
Cash-on-Delivery in India’s E-commerce

Abstract – The online retail service is growing in the emerging market such as India. The online retail companies launched Cashon-Delivery (COD) to create trust of e-commerce in India. This helped many companies to penetrate in Indian Market. However, to the online retail company COD service has added additional burden such as direct and indirect cost of the transaction, high working capital requirement, efficiency management of COD ecosystem and payment hassles. According to Ernst & Young (E&Y), COD accounts for 50 to 60 per cent of online transactions in India. To reduce the contribution of COD in the online transactions without affecting the number of sales the online retail service providers need to understand why does the customer use COD as a mode of payment. The purpose of this research is to understand the factors influencing the customers to use COD as a mode of payment. Keywords – E-commerce in India, Cash on Delivery, Challenges in cash on delivery, COD

users, but is still below world averages. This shows the immense potential that the retail category holds in India with online retail filling the distribution and convenience gap. The e-Commerce and allied companies have also turbocharged the e-Commerce growth engine by introducing innovative business models, by introducing technological innovations and by offering convenient payment options most popular being the COD. Cash-on-delivery has been one of the key growth drivers and is touted to have accounted for 50% to 80% of online retail sales. Players have adopted new business models including stock-and-sell, consignment and group buying; however, concerns surrounding inventory management, location of warehouses and in-house logistics capabilities are posing teething issues in COD. The other major rationale behind leveraging COD is high dropout rates (25-30...

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