THE IMPACT OF DEMONETISATION ON E-COMMERCE PLATFORMS
The unanticipated demonetization of rs 500 and also rs 1000 in India was a big blow which no one saw coming. The country is still in the process of recovering and businesses, including the eCommerce sector has been affected greatly. Some people were happy about it and saw it as a step in the right direction against counterfeiting currency, black money, and even terrorism. Others yet were not so excited about it. Trade, as well as demand, have both been affected seriously by this change.
This change has affected eCommerce businesses as a result of orders not being delivered. Many customers after choosing the cash on delivery system, still offer old notes for payment. Of course, the cashless services are now being patronized more due to the economic change, but still, the orders that have already been made, are now hard to complete because of the cash on delivery system that was already chosen.
Online payments have gone up greatly in the light of the change, but so has the number of online orders that have not been delivered. Owing to this, these platforms have seen a lot of returns because the customers who made the order and requested the cash on delivery system, insist on paying with the old currency and if not, they request for the order to be returned.
The issue of demonetization has led to the stoppage of the cash on delivery option, which is a problem because up to 60% of online orders in the country were made using this means. The cash on delivery means of payment is the most used means in the whole of India because many customers would rather have their items delivered first before they pay for them.
As a means of making up for this considerable drawback, a credit card on delivery payment method has been introduced and included for many transactions, in order to cater to those customers who may be running out of cash.
Reputable sites now offer discounts on payments online and also equated monthly installment (EMI) schemes, at no cost.
An Amazon spokesperson revealed that this credit card on delivery payment has helped the company grow as much as ten times what it was before the system was introduced. However, according to many sellers, the system has still not been able to make up for the incredible loss that was incurred by the failure of the cash on delivery mode as a result of the economic change.
Of course one cannot expect everything to go over smoothly, especially in the initial stage, but as time goes on, one can only hope for more growth, reduced usage of the Cash on Delivery (COD) means of payment and also steady and hasty investment returns.