New Delhi: Despite India’s digital boom, about one-third of cash-on-delivery (COD) orders from the e-commerce websites in India are not delivered, which ends up adding to cost for the e-tailers, according to the data from Narvar, a San Francisco-headquartered company. It partners with major global retailers to automate the deliveries, as per the news report in the national publication.
Currently, COD accounts for 65 per cent of all orders from online marketplaces in India. “Depending on the size of the parcel, a single return could cost the e-tailer Rs 50-150,” said Pushkar Singh, founder & CEO of last-mile delivery logistics company LetsTransport cited by the publication.
Narvar’s chief technology officer (CTO) Ram Ravichandran, told the publication that in India many e-commerce companies are piloting projects using machine learning (ML) and artificial intelligence (AI) that may enable them to cut losses by several means, including not offering COD to certain shoppers based on their shopping behaviour. “Being a very high COD market, non-deliveries and returns are major problems for Indian retailers. It is a massive challenge and loss of income for retailers. The idea is to incentivise people to move beyond COD,” he said.
Major e-commerce companies, including Amazon India, did not respond to the questionnaires sent to them on non-deliveries and returns via email. However, a senior industry executive said the Flipkart Group, along with other e-tailers, are experimenting with quite a few initiatives to help them reduce losses from returned items.
“Providing lucrative benefits by partnering with financial institutions on prepaid orders is one such step. Other than that, Myntra is running several such pilots because apparel and footwear are some of the most returned items due to sizing issues. On Myntra, for instance, one can now upload a picture of the foot to get the correct size of the shoe,” he said.
It may be noted that COD orders are returned due to several issues. A non-delivery process starts with the carrier being unable to deliver the customer’s order due to his or her unavailability. According to an executive, as quoted in the national daily, “At the end of the day, carrier shares a list of all non-delivered orders with the retailer portal. Retailer’s customer support team then tries calling these customers to take their delivery preferences. These responses are shared with the carrier the next day. On the basis of this, run orders are prepared. The carrier, then, tries to deliver and often ends in the same loop. This whole process takes more than three to four days, leading to irk customers, reduced operational efficiencies and product returns.