About 2 million COD orders stuck with e-commerce companies after the government banned Rs 500 and 1000 notes
Bengaluru- Nov 10. 2016. Rednewswire/-
After the government took a drastic step by banning Rs 500 and 1000 currency notes, e-commerce firms are left with no option other than discontinuing cash on delivery (COD) orders. But this step has created a major trouble for the e-commerce retailers, over 1.6-2 million shipment are stuck in the shipment process according to sources.
Firms as well as customers majorly depended on cash on delivery for placing and fulfilling orders. E-commerce giant Amazon India has stopped accepting orders placed on cash on delivery whereas Flipkart has reduced the COD orders limit to Rs 1000. The latter is also urging its customers to make online payment. Indian e-commerce player, Snapdeal has limited COD orders to below Rs 2000. All the firms have stopped accepting Rs 500 and Rs 1000 notes.
“During peak festive sale, online retailers were clocking about 3 million shipments per day which have slowed down after Diwali. Estimates suggest 70%-80% of these orders were made through COD. Some players are trying to use mobile swipe machines to collect payments for COD orders but the conversion rate traditionally has been low,” says a source.
E-commerce companies are also predicting return of orders as customers are likely to save cash for other important purchases. According to the All India Vendors Association, Flipkart has stopped charging return shipping fee from sellers.
Ananth Narayan, CEO, Myntra says, “There might be a short term impact on e-commerce transactions given the dependence on cash on delivery as a preferred mode of payment, but in the longer term we don’t foresee any material change in consumer spending”. In India, over 60% of orders placed online are made using COD method of payment.
The story was originally published here