Here's how scrapping the Rs 500 and Rs 1000 currency notes has affected the e-commerce sector.
Two days after one of the boldest decisions taken by the Centre, the e-commerce sector is struggling with the impact of demonetisation on its sales. Not entirely counting their losses, many online shopping portals have registered a dip in cash on delivery (COD) sales, with the flip side being an upsurge in prepaid orders.
COD being a more preferred mode of payment for e-shoppers, the business has taken a hit, albeit temporarily. With around 60-70% of orders being COD, retailers are complaining that the sales have come down by almost 20% in this category. While bigwigs like Snapdeal, Flipkart put a cap of Rs 1000 on CODs, Ajio and Amazon have suspended the service till the market streamlines. The companies also alerted customers about not accepting Rs 500 and Rs 1000, urging them to either make electronic payments or keep valid currency in hand. “60% of our sales is from COD orders but after the recent move, we are not offering cash on delivery, hence the number of orders have gone down. But at the same time, we are also encouraging customers to use credit cards and are offering a discount of 12% as an incentive too,” said Ritika Nangia, founder, Funcart.in
Some online commerce companies have also registered an increase in prepaid orders, signalling that the brunt of demonetisation may not be that harsh to bear. Further trying to minimise their loss, companies are also delaying deliveries or rescheduling them. “We have noticed an overall increase of 7% in prepaid orders even though the COD sales, which are the biggest revenue generators, have plummeted by 12%. We have also delayed and rescheduled delivery of many orders as the courier company associated with us has denied accepting the COD payments,” Varinder Singh Jawanda, founder, TrendyBharat told DNA.
Unable to comprehend the exact time till the cash inflow becomes normal, e-commerce companies are also mulling starting the COD facility within a week, hoping business will bounce back once the new currency is rolled out. In an effort to provide a seamless shopping experience in times of demonetisation, some retailers like Amazon and Flipkart have also facilitated Point of Sale machines to their delivery executives for customers to swipe their credit and debit cards.
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