I’ve been shopping online since circa 1998 but, over the years, the following factors have taken the shine off my initial enthusiasm for ecommerce in India:
- Driven by VCs braying for profits, many ecommerce players in India have moved from the traditional inventory model to the asset-light marketplace alternative. Based on my exposure to this model on eBay India, I tend to believe that it poses an intrinsic
delivery risk (more in the post titled A Tale of Two Sites on my personal blog)
- Online credit card payments have become very painful as a result of overzealous security measures like two factor authentication and Mobile OTP.
As a result, I’ve become somewhat partial to brick-and-mortar stores during the past 2-3 years.
However, a combination of stock outs and store closures drove me back to ecommerce recently (See Retail Is Barking Up The Wrong Tree Against Ecommerce on my
company blog for more on that).
This coincided with the entry of Amazon to India. My consistently good experience with the ecommerce giant in Germany, UK and USA for over 10 years prompted me to check out Amazon India. I quickly noticed that, while Amazon stocks its own inventory in its
overseas operations, it adopted the marketplace model from Day One in India.
As I said earlier, I’ve been cagey about online marketplaces ever since my bad experience with eBay India.
But I found out that, while the items on Amazon India were listed under the name of third party sellers, Amazon handled the logistics by itself. This was reassuring since many of the ills of the marketplace model could be traced back to the sad state of
logistics in India (See Will The Sad State Of Logistics Hurt Indian eCommerce? on my company blog for more on this topic).
Then, I also found that Amazon India offered Cash on Delivery, a payment type not offered by Amazon in any other country where I’ve patronized it.
Accounting for over 60% of ecommerce volume in India, COD eliminates the friction of using credit cards online. Moreover, by letting me pay only upon receipt of goods, COD kept me insulated from disputes, if any, between the merchant and Amazon that came
in the way of fulfillment of my order. Even in the worst case, if I didn’t get my order, I didn’t pay.
So, despite its marketplace risk, I took shelter in COD and went ahead and placed three orders on Amazon India.
I’m not regretting my decision.
I got all my consignments on time or slightly earlier than the promised 4-6 business days. This is not surprising considering COD would put a natural pressure on merchants to deliver earlier so that they can collect their money faster.
COD has proved to be better equipped than card to solve a key problem arising from the shift in ecommerce from inventory to marketplace model.
Just another experience that reinforces my long-held belief that the move between cash and cashless methods of payments is not always unidirectional.