Demonetisation Effect: Amazon Suspends COD, Flipkart And Snapdeal Restrict Limits

In what can be said as a reactionary move to India’s decision of demonetisation and digitisation, ecommerce giants like Flipkart, Snapdeal, Amazon India, and Shopclues have revised their customer policies.

As per a report by ET, online marketplace Amazon India has currently disabled the cash-on-delivery payment option for all its orders. Whereas its rival Flipkart has restricted the COD option for orders above INR 1000, and Snapdeal for orders above INR 2000.

When contacted via email by Inc42, an official spokesperson from Flipkart stated, “We welcome this bold and historic initiative by the Government of India.  This will enable India to move faster towards digital payments and will be a game changer for Flipkart and for the ecommerce industry. Meanwhile, we urge our customers to opt for alternative payment modes such as card on delivery, internet banking, credit and debit cards, gift cards, and our easy and convenient PhonePe wallet. We are also working on a slew of measures to help customers easily transition from cash to digital payments.”

In a nation like India, where people are still comparatively apprehensive about switching to digital modes of transactions and around 60% of the purchases are made via the COD mode, this move might bring an initial slow down in sales via these platforms.

Commenting on the development, an official spokesperson from Snapdeal said, “All Snapdeal users who have already placed Cash on Delivery orders can pay for their deliveries using any currency notes except the INR 500 & INR 1000 notes discontinued by RBI. Users also have the option to defer the delivery by a few days till new currency notes become easily available. As an interim measure, we have restricted new COD orders to INR 2000 to make it convenient for the buyers and the delivery personnel. The COD limits will get increased gradually over the next few days.”

With this major shift in the economic model of the country, these ecommerce sites may face a slow down in the near future, but the move will ultimately be beneficial for the companies, since it will ultimately lead to the reduction in number of cash on delivery orders, thereby improving the unit economics in the longer run.