POSITIVE IMPACT: Good for unit economics as Cash on Delivery down and returns drop
NEGATIVE IMPACT: All companies hit; niche players worse off
NUMBERS GAME: Sales down 60-70%
60% of the 1 million of e-commerce transactions are based on cash-on-delivery. “These are not getting placed. Recently, online shopping has become the last number in the list of priorities” Sreedhar Prasad, partner, ecommerce and startups, KPMG India told media.
On other hand, sellers are complaining that their business has taken a drift down in the dumps and e-commerce companies are playing down the post-demonetisation impact.
“Customers are adopting electronic payments at delivery and this has seen 10X growth,” an Amazon India spokesperson revealed media.
While, Snapdeal stated that its digital wallet Freecharge helped it. Folloing the day of announcement to ban Rs 500 and Rs 1,000 notes, e-commerce companies capped CoD orders to below Rs 1,000 with all purchases above this amount to be carried out by digital wallets or cards.
However, the sellers have a different view. Deepak Chopra, founder of Softek Surya, a seller based in Nehru Place, Delhi, told the media sources that his daily shipments to portals are down to 700 from 4,000.
“I have 60 employees and monthly costs of Rs 20 lakh. My sales have dropped to less than Rs 5 lakh. How will I pay them?” Hyderabad based seller Redlily and Jaipur based jewellery brand Dhora have also faced the similar crisis in online sales.
Niche sellers of e-commerce companies got the worse hit as selling a single commodity like lingerie, eyewear, fashion has fallen by 60-70%.
“People are buying only essentials. Besides, the large companies are equipping their logistics staff with card readers to ease payments in delivery. Smaller companies can’t afford that,” says Prasad of KPMG.