It has been roughly twenty days since PM Modi announced the scrapping of Rs. 500 and Rs. 1,000 notes. The move naturally affected all citizens, particularly businesses. This brought down cash on delivery (CoD) transactions significantly. Leading companies like Flipkart and Amazon discontinued their CoD transactions or limited their value. This hits the industry hard, as nearly 70% of online sales happen through CoD, says RedSeer Management.
Going back to discounts to net buyers
It looks like the desperate times are upon ecommerce again. While most companies have expressed happiness that this move will push cashless prepaid transactions, it looks like everyone is worried. Leading online marketplaces are planning sale events in the coming days.
Flipkart announced that it will be holding sales to encourage cashless sale,
“We will have multiple sale events coming up ahead of the holiday season. Besides, in reference to the demonetization drive, we have a bunch of incentives on prepaid orders such as instant wallet cashbacks. We have seen a 50% spike in prepaid orders post the demonetization drive. We significantly ramped up our card-on-delivery facility by deploying more PoS machines. We have also been running various offers on multiple payment instruments like wallets and debit cards.”
Rival Amazon, on the other hand is not planning any sale as it is witnessing good response to its cashless sales,
“We have already seen tremendous customer response in adopting electronic payment methods at delivery with 10x growth in electronic payments at the doorstep. Additionally, we saw exciting response to our launch of an offer for customers to go cashless where customer can top up their Amazon Gift Card balance and enjoy an instant incentive of 15%. We have also reintroduced cash on delivery starting 11 November.”
Yay or nay?
The jury is divided on whether the demonetisation is for the better or worse for Indian ecommerce. While everyone admits that the immediate reaction was a drop in sales, they do agree that it helps push non-cash transactions, which is something that the industry is pushing towards. Paytm use has gone up significantly. The full impact of the move can only be deduced in the next few months.