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E-commerce companies are facing a problem when it comes to entering the Indian market. COD, or cash-on-delivery, is the preferred system of payment for Indian consumers who shop online. <a href="http://www.businessinsider.com/cash-on-delivery-remains-the-preferred-method-of-payment-in-india-2016-6">83% of Indian consumers said they prefer cash-on-delivery to credit or debit card purchases</a>. The reason why so many Indians prefer a cash-on-delivery system is due to the fact that infrastructure and delivery within the country are not exactly the most reliable and credit card systems aren’t as trustworthy as those in other countries, and in fact many Indians do not even make use of credit or debit cards at all, as <a href="https://brandalyzer.blog/2017/06/11/credit-card-penetration-in-india/">credit card penetration in the country, while rising, is still low</a>. This COD problem is one that is absolutely worth solving. The digital economy in India, including e-commerce, is expected to grow into a <a href="https://www2.deloitte.com/content/dam/Deloitte/in/Documents/technology-media-telecommunications/in-tmt-e-commerce-in-india-noexp.pdf">$1 trillion market by 2022, according to a recent joint report by the Confederation of Indian Industry and Deloitte</a>. E-commerce companies that are looking to get a slice of this pie are experiencing some growing pains. One of the biggest pains is the COD problem. <a href="http://www.livemint.com/Companies/7uHnnB7jS7aUk4i4V2adSO/Amazons-loss-jump-to-936-million-in-September-quarter-on-I.html">Amazon reported losses of $936 million dollars in September</a>, and you could attribute some of those losses to the fact that Indians prefer cash-on-delivery. But why is COD such a problem for e-commerce companies like <keyword id="18635" type="ORGANIZATION" weightage="20" keywordseo="Amazon">Amazon</keyword>? Part of the reason is restricted cash flow. It could take months for payments to reach the seller, and as <a href="http://articles.economictimes.indiatimes.com/2013-11-04/news/43658867_1_indiatimes-shopping-flipkart-courier-companies">Sachin Bansal, co-founder of Flipkart said</a>, “I would not like to have cash transactions. The non-immediacy of payments and higher returns are the problems we face with cash-on-delivery.” Not only could cash take longer to reach sellers, there remains a possibility that it might not get to them at all. While cash-on-delivery transactions cost e-commerce companies an additional 3% to process it could be more when returns are factored in. <a href="https://economictimes.indiatimes.com/industry/services/retail/cash-on-delivery-hurts-bottom-line-of-cos-like-flipkart-snapdeal-due-to-extra-associated-costs/articleshow/25192740.cms?intenttarget=no">As Ashish Jhalani of eTailing India claims</a>, “the bottom line is impacted due to such orders. This number goes up by about 30% when returns happen.” The increased losses are not only due to returns but also because companies incur courier and shipping costs regardless of whether or not the customer purchases the product. <a href="https://hackernoon.com/how-cash-on-delivery-fuelled-e-commerce-growth-in-india-8ae66bea6cfe">So while impulse purchases may increase due to the fact that payment is not due at the time of ordering</a>, returns are commonplace, and there’s no assurance that a company will receive payment. So as India enters the digital age and online retail shopping rises, how do companies get around the COD problem? <a href="http://quantifiedcommerce.com">Quantified Commerce</a>, a company focused on building e-commerce brands mainly in India has found creative and practical answers to the problem of cash-on-delivery. We spoke to <keyword id="6504806" type="PERSON" weightage="100" keywordseo="Agam-Berry">Agam Berry</keyword>, co-founder of <a href="https://www.linkedin.com/company/quantifiedcommerce/">Quantified Commerce</a> to find out what his company is doing right now to avoid the COD problem. “The best way to lower returns and shipping cost in cod orders is by having local inventory in every city,” said <keyword id="41529" type="PERSON" weightage="20" keywordseo="Berry">Berry</keyword>, “we have warehouses in four cities and have plans to add forty cities by the end of the year.” This solution not only solves the cost problem but the return problem as well, “most of the time returns happen because a customer changes their mind in the time it takes for a product to get to them, but when you have inventory in every city lowering shipping times that problem is greatly reduced,” Berry said Berry also talked about how vertical integration is part of the solution to COD, “we’re looking into purchasing our own trucks, which would allow us to move our product between warehouses faster. Trucking and logistics in India are very fragmented and it takes as much as seven days to move a product from one part of the country to another, which puts further pressure on the liquidity of the companies in this space.” The decreased delivery time would be able to loosen the restricted cash flow as an added benefit, the faster a customer gets the product into their hands the faster a company can get the cash thus helping the cash flow cycle. While India is making strides towards the use of credit and debit cards, the COD problem is still one that is relevant to companies entering the Indian market. It’s a tough problem to solve, but with companies like <a href="https://twitter.com/QuantifiedC">Quantified Commerce </a>leading the charge, the solution may come sooner than we think.

Quantified Commerce’s Agam Berry on India’s love of cash on delivery

BANGALORE|NEW DELHI: Even a decade ago, the name "Bansal" would have brought in images of coaching classes in Rajasthan's Kota, but today it is the common factor binding the who's who of India's fledgling e-commerce sector. 
 Five young men who answer to that name have emerged as trailblazers of Indian e-commerce, taking on global biggies like <keyword id="18635" type="CITY" weightage="60" keywordseo="Amazon">Amazon</keyword> and eBay for top honours in the country's exploding market for online retail. 
 Online marketplaces <keyword id="6354742" type="COMPANY" weightage="80" keywordseo="Flipkart">Flipkart</keyword> and Snapdeal, apparel retailer <keyword id="319719" type="COMPANY" weightage="80" keywordseo="Myntra">Myntra</keyword> and eyewear retailer <keyword id="1518229" type="PERSON" weightage="80" keywordseo="Lenskart">LensKart</keyword> all have Bansals at the helm. Such is their clout that they account for nearly Rs 10,000 crore of the total online retail pie of about $2 billion. 
 
But their adeptness at trade and commerce is not a state secret. As a sub-sect of the Aggarwal community, the Bansals are known for running a tight ship when it comes to business and entrepreneurship. 
 "We (Bansals) have the math, <keyword id="25455" type="ORGANIZATION" weightage="40" keywordseo="finance">finance</keyword> and data skills that are extremely important for e-commerce," said Rohit Bansal who teamed up with schoolmate and Wharton alumnus Kunal Bahl to set up online marketplace Snapdeal in 2010. 
 
 
 
The Bansals of the new economy also sport degrees from IIT and IIMs. The five Bansals with their four companies - Flipkart, Myntra, Snapdeal and LensKart - set up shop within the last seven years and control about 85% of India's entire e-tailing industry. 
 
But they have to contend with the might of $75-billion (Rs 4.5 lakh crore) Amazon, which entered India last year and is investing heavily. Heading the fightback are <keyword id="225032" type="PERSON" weightage="40" keywordseo="Sachin-Bansal">Sachin Bansal</keyword>, 32, and Binny Bansal, 31- founders of Bangalore-based Flipkart - who met each other while studying at IIT-Delhi. Their company today generates about Rs 6,100 crore in sales, half the industry total.Flipkart is also the biggest challenge for Amazon, a company where both the Bansals honed their skills before setting up on their own in 2007. Coming second is Snapdeal, whose Rohit Bansal, 31, graduated ahead of Sachin and Binny from IIT Delhi. <div style="page-break-after: always;">
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 "My ancestors from my paternal and maternal sides have all been <keyword id="80597" type="POSITION" weightage="40" keywordseo="Businessmen">businessmen</keyword>," said Rohit Bansal, who is from Malout, a small town in Punjab, just four hours from Chandigarh where the Bansals from Flipkart grew up. 
 
Snapdeal’s turnover is now half of Flipkart, and it is expected to cross the $1 billion mark next year. The Bansals are making a mark not just in horizontal marketplaces, but also single-category retail. Bangalore-based Myntra Designs, founded by another IITian Mukesh Bansal, is giving stiff competition to Flipkart in apparel, one of the highest-margin categories, where profits range from 30% to 50%. 
 “It has come full circle with me getting in fashion retail online,” said Mukesh Bansal, <keyword id="5645" type="POSITION" weightage="40" keywordseo="CEO">CEO</keyword> at Myntra, who hails from Haridwar. His father had opted for a public sector job over joining the family business — ironically, clothes trading. “No family influence made me think of entrepreneurship. But the startup bug bit me in Silicon Valley,” said Myntra’s Bansal, 38, who moved to India to start Myntra in 2007. His venture is targeting sales of Rs 1,500 crore next fiscal from apparel sales, the largest in its category. 
 
LensKart, founded by another Peyush Bansal, 30, is considering selling his other portals such as WatchKart, BagsKart and JewelKart to a horizontal player at the ‘right price’ to focus on the eyewear market. “My parents didn’t understand while I was starting up. But they came around later. You have to understand that they are products of their generation,” said Bansal, who is targeting revenue of Rs 100 crore from LensKart next fiscal. 
 
RBI Chair Professor for Economics &amp; Social Sciences at IIM Bangalore Charan Singh says that a community’s dominance over a certain trade is a factor of its social interactions. “It can be likened to the Jewish community in the US which continues to hold top posts in US banking and technology industry.” Ashish Jhalani, head of retail advisory firm eTailing India, agrees. “Certain communities in India do encourage entrepreneurship. The Bansals and Aggarwals have definitely dominated businesses in India, particularly retail trading, for centuries.”

Flipkart, Lenskart, Myntra & Snapdeal, Led By Bansals, Account For 10k Crore Of 12k-Crore E-Commerce Market

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Quantified Commerce’s Agam Berry on India’s love of cash on delivery

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Flipkart, Lenskart, Myntra & Snapdeal, Led By Bansals, Account For 10k Crore Of 12k-Crore E-Commerce Market

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