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One Out of Three Cash-On-Delivery Orders in India Remain Undelivered: Report

A single return could cost an e-retail company Rs 50-150 depending on the size of the parcel.

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Updated:November 11, 2019, 4:39 PM IST
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One Out of Three Cash-On-Delivery Orders in India Remain Undelivered: Report
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Nearly one-third of the cash-on-delivery (COD) orders placed on leading e-commerce websites in India stay undelivered, according to a study by San Francisco-based Narvar, accessed by the Times of India. Narvar is an e-commerce start-up that works with e-retailers mainly to automate deliveries and improve post-purchase experience for customers.

The study says that a massive 65% of all orders received by e-retail platforms in India, like Flipkart and Amazon India, are COD orders despite the ongoing push for digital payments in the country. Of these COD orders, nearly 33% of them are not delivered, which adds immensely to the cost of these e-retailers.

A single return could cost an e-retail company Rs 50-150 depending on the size of the parcel, Pushkar Singh, founder and CEO of last-mile delivery logistics company LetsTransport, told Times of India.

“Being a very high COD market, non-deliveries and returns are major problems for Indian retailers. It is a massive challenge and loss of income for retailers. The idea is to incentivise people to move beyond COD,” the report quoted Narvar’s chief technology officer (CTO) Ram Ravichandran as saying.

The report noted that though there are several reasons for returns of COD orders, the non-delivery process typically starts with the carrier being unable to deliver the customer’s order due to his/her unavailability.

The carrier then usually shares a list of all such non-delivered orders with the retailer portal at the end of the day. Then, the retailer’s customer support team tries calling these customers to take their delivery preferences. These responses are then again shared with the carrier the next day. On the basis of this, run orders are prepared. The carrier, then, again tries to deliver and often ends in the same loop.

According to the report, e-retailers like Flipkart Group are now experimenting with some initiatives to help them reduce losses from returned items. Narvar’s CTO Ravichandran also said that e-commerce companies are piloting new projects using machine learning and artificial intelligence that may enable them to cut losses by several means. One of these may include not offering COD to certain shoppers based on their shopping behaviour.

“Providing lucrative benefits by partnering with financial institutions on prepaid orders is one such step. Other than that, Myntra is running several such pilots because apparel and footwear are some of the most returned items due to sizing issues. On Myntra, for instance, one can now upload a picture of the foot to get the correct size of the shoe,” Ravichandran added.

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