The Indian ecommerce industry witnessed nearly 30% drop in sales after the government banned Rs 500 & Rs 1000 currency notes. The demonetisation drive affected cash-on-delivery orders, in spite of enabling alternate payment options such as card/e-wallet payment after delivery and resuming COD service after a brief halt.
But as customers gradually adapt to cash-less existence and digital payments, ecommerce biggies and other digital start-ups are finding ways to make the most of the situation.
Etailers Flipkart, Snapdeal speak about the positive impact of demonetisation
At a recent event, top managers of Flipkart, Snapdeal, Shopclues, and Ola praised the government’s decision to ban high-denomination notes. While they accepted that there was a drop in sales, but etailers also stated that the transactions through digital payments have gone up.
“There was a drop in sales and cancellations of CoD orders but it’s recovering now. At some point in time, it (COD) was at 70 per cent and then it came down to 50 per cent. It is now at 30 percent. While it might go up a bit, we expect the ratio to hover around the current level,” revealed Flipkart’s co-founder Sachin Bansal.
Snapdeal’s co-founder Kunal Bahl shared that his firm would push digital payments but they have no plans to discontinue COD. Bahl also believes that the COD trend will reduce gradually. And Shopclues co-founder Sanjay Sethi shared that, contrary to popular belief, buyers from tier-II and tier-III (largely) place prepaid orders, whereas the percentage of COD orders is high in metropolitan cities.
Online grocery companies and hypermarkets rolling in money
Thanks to the wafer-thin margins, logistical challenges and other inherent issues, online grocery start-ups have been struggling for a long time. Many had to either shut shop or change their business model, in order to survive.
But demonetisation is turning out to be a boon for these companies. Cash-strapped consumers are turning to e-grocers like BigBasket and supermarket stores like Reliance Fresh, Hypercity, More and Spencer’s to buy daily necessities. Buyers who went to such stores once or twice in a month are now shopping daily from online & offline hyper-stores since they can pay through cards and e-wallets.
“In the past four days, stores in Kolkata have recorded a 25% surge in sales. We were never the primary providers of fresh and top-up products like cereals and staples. That is changing fast. Since Saturday, the fresh category has growing by 30-50% over the corresponding period previous week,” said Mohit Kampani, CEO of More.
The surge in demand is so high that the delivery lead time has increased considerably. Grofers too witnessed a drop (from 50% to 20%) in COD orders. According to Big Basket’s founder Hari Menon,
“Adding people and delivery vans take 45-60 days and is done according to projections. The demonetization announcement has sent calculations haywire.”
Paytm launches multilingual interface
Digital wallet leader Paytm is on a roll ever since demonetization announcement was made. In the past few days, we have seen people from all walks of life using Paytm due to liquid cash-crunch. To continue this positive growth trajectory, the company recently launched its multilingual user interface. A big advocate of financial inclusion, Paytm’s Android app interface will now be available in these regional languages – Bengali, Gujarati, Hindi, Kannada, Marathi, Malayalam, Oriya, Punjabi, Tamil, and Telugu besides English.
“At Paytm, our team spends hours designing each new feature and obsesses about the smallest of details. With this new move, we are looking to push our share of customers from tier II and tier III cities from 50 percent to 70 percent. Our goal is to make payments and commerce more inclusive, and this new feature will help us expand the market to include those users who would prefer to engage online in their native languages,” said Senior VP Paytm, Deepak Abbot.