Last month I was interviewed for a small video feature that covered 3 booming economies India, Brazil and China. Here’s the link to the video feature.
COD or Cash on Delivery as we now know it wasn’t no where near its popularity today a few years back. Today quite a few people (who call us at dialabook and otherwise) know and talk about Cash upon Delivery as a concept (books milne ke baad paise de sakte hain?) if not the exact term. COD as we know has taken the entire e-commerce Industry(if we can call it) by a storm.
To give you some perspective, about 2 years back when we(@dialabook) started collecting payment for books on delivery, we had no idea about this term and no notable e-commerce site had this option. Fast forward it to today and almost all e-commerce sites(and a few others like the one below) accept(or rather promote) COD to lure more customers.
While COD as a concept has been there for ages under the name VPP (Value Payable Post) by India Post. Here’s how their website defines VPP
The value payable system is designed to meet the requirements of persons who wish to pay for articles sent to them at the time of receipt of the articles or of the bills or railway receipts relating to them, and also to meet the requirements of traders and others who wish to recover, through the agency of the Post Office the value of article supplied by them.
Govt VPP however seems to have an upper limit of Rs 5000/-, which means you can’t send goods worth more than 5k through them.
Not just VPP, some courier companies in India have been supporting COD since March 2009 at least. Though some startups like @dialabook might have been offering COD locally before, the big shift happened in April 2010 when country’s leading e-commerce player Flipkart introduced COD in April 2010 with a cash limit of Rs 2500/-, followed eight months later by Infibeam (FYI: Indiaplaza announced COD on 25th March 2010, a few days ahead of Flipkart ). It is also worth noting that some services like travelguru.com were offering COD option at least 2 years before e-commerce companies started adopting it. Seeing its success elsewhere, online travel portals yatra and Ezeego1 also launched COD in year 2011
As it turns out India isn’t the only breeding ground for COD. China,Russia etc have been a witness to the popularity of COD for long.
Going by the stats in India, as much as 60% customers of top 5 e-commerce sites in India use the option of paying by cash on delivery (COD) and many of these sites have credited COD for fueling their rapid growth. While COD for obvious reasons makes a lot of sense for Indian customers and definitely opens a new market (students etc) to e-commerce it isn’t exactly what the doc prescribed or should prescribe. Here are some of the things wrong with COD
- Cost: Nearly all courier companies charge extra for collecting cash. This cost is divided in two parts
Fixed Cost: Rs 20-150/- ; Variable Cost: 1-3% of the COD Amount. (This is mostly for high price items like mobile phones, laptops etc). If the item is priced low then the COD charges at times exceed one’s margin in the product and if the item is priced very high then the % COD charge turns out to be in hundreds or even thousands
- Delay in payment: Unlike credit card transactions, COD payment generally takes 1-2 weeks or more to be transferred to your account. This bites your cash flow especially as the COD amounts start becoming huge.
- Delay in deliveries: On an average COD deliveries are delayed by 12-36 hours when compared to normal deliveries. The reasons for the same are mostly non-availability of customer or cash and many a times both. Here unlike regular deliveries the parcel can’t be dropped to a neighbors place
- Higher Returns/Cancellations: Since the customer hasn’t paid in advance, they can always cancel/refuse to take the delivery and sight reasons like I found this phone cheaper locally and have bought it from there or I have changed my mind, will buy a new laptop later
- Overheads: Collecting the cash, collating the receipts and maintaining records et all is a nightmare
With increasingly every online business offering it despite its disadvantages(to retailers) the situation might just go out of hand and turn into a death spiral (at least for some non/less funded businesses that rely heavily on their internal cash flows). Small startups are the ones that should be really concerned about these issues instead of blindly aping others and starting COD.
With time as the e-commerce market in India matures, there *might* be more trust in established mechanisms of swiping cards for paying and some people will get over the liking for COD and prefer pre-payments. But, given the case in China, Russia etc it looks like unless the e-commerce majors deliberately start demoting COD and promoting other payment options we just might replicate what’s happening elsewhere i.e 60-85% people using e-commerce sites paying by COD.
Some ways around COD
- Multiple Payment Options (at least 5-6)
- Pre-payment methods (like wallets, cards)
- Mobile banking and SMS payments
- Card on Delivery
- Giving incentives to users for choosing online payment against COD
- Alternative payment methods such as paypal etc
While COD is a good option to have in some cases its double edged sword which should be used with a lot of caution and foresight. What do you think?
When we change the way we communicate, we change society – Clay Shirky
Amongst the things that’ve changed since the advent of social software/social media is Activism. The ease with which new groups can be formed and action coordinated among its members, has changed the face of Activism completely to Activism 2.0 as we call it. Except for starting and end points everything has changed and changed drastically. Here’s a really old news item about online protest. Consider these examples of Activism 2.0
Second Life Strike Against IBM: One month after a virtual protest staged in Second Life with almost 2’000 avatars demonstrating on IBM islands, a new contract with IBM Italy has been signed.The new agreement, which still needs to be approved by the IBM Italy workforce, reinstates the performance bonus that was cut unilaterally by IBM Italy management.
Facebook Group Spawns Protests in 185 Cities: A Facebook group mobilizes millions in anti-FARC march.
Mass Virtual Suicide in China to Protest Game Limitations: A group of World of Warcraft players in China committed mass suicide. They wanted to draw attention to the latest restriction on their liberty: The same government agency that censors newspapers and bans books had just mandated a system of disincentives to limit the number of hours per day they spent playing online games. In the aftermath of the public outcry (and virtual die-ins), the Chinese government announced that adults could play MMORPGs for as long as they like.
These are some of the cases of Activism 2.0 but they give you a sense of the scope of this sort of activism and the possibilities that it has. A few years who would have thought a virtual mass suicide would have got even noticed, let alone letting a goverment to change it’s policy ? or who would have thought you could arrange a real protest involving millions of people withouth ever meeting them in real life before ?
The activism isn’t just limited to serious/political stuff, a quick search of facebook or social network of your choice will lead you to lots of things like petition to get McDonalds to do deliveries, or petition to get K.F.C to do door deliveries.
The possibilities with social software are immense and the pace at which their usage is spreading, further increases their scope, but what is it about the tools that really puts Activism 2.0 way ahead of its predecessor ?
Ease of group formation: Getting people together hasn’t been easier. Thanks to social software people can get together a lot easily and faster. Unlike in real life where a lot of effort, time and resources are needed to spread the word and get people together, with web the cost(time, effort and resources) is minimal.
Critical Mass: Due to the popularity of social software(Flickr,Wikipedia,Blogs etc) the available audience is hugh. You just have to start doing the right things and in no time you can reach out to people who can relate to your cause.
Sans Frontiers: Not limited by geography is another positive aspect of Activism 2.0 which makes it highly likely to spread to other areas where it would haven’t reached or took long to reach had it being an offline initiave.
Ease of coordination and collaboration: Because of really low transaction costs and real time updates it’s a lot easier to coordinate a large group of people. Since most of the popular tools are free and have inbuilt feature that support group activites, it’s really easy to share real time updates and collaborate.
Visibility: Unlike in it’s early days the disconnect between online and offline worlds is a lot less so a purely web phenomenon isn’t restricted to web only and starts spreading in offline world. The huge possibility of transition to real life is also an incentive to start with virtual protest.
Here are some the commonly used tools for Activism 2.0
List of online activism(of sorts)
1. Support The Monks’ Protest In Burma
2. Facebook layout protest
4. Online Protest over 2012 logo
7. G20 summit protesters use Twitter, Facebook and Social Media tools to organise demonstrations
8. SF Activists use Twitter to coordinate war protest
9. Inside Moldova’s Revolution
11. Cyber Demos Protest Online Censorship
12. The New Zealand Internet Blackout
13. Facebook protest forces interest rate climbdown
14. Nude art clothed in protest against China’s Internet crackdown
15. Petition to LinkedIn
So what do feel Activism 2.0, how do you see it changing in times to come ?