Post demonetization COD orders drop 30% on ecommerce platforms

By

Maverick Martins

Published
Nov 17, 2016

The government’s move to demonetize Rs 500 and Rs 1,000 notes in the country has resulted in up to 30 per cent fall in cash- on-delivery (COD) orders from leading etailers like Snapdeal, Flipkart and Shopclues.

All the big players in the e-commerce market, however, have hailed the government’s decision and stated that it would be beneficial to the country 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 told reporters over a video call.

Echoing 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, said Bahl, 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.
 
Following the announcement on 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.