Ecommerce, Internet, News

Fetise brings Cash Before Delivery (CBD), ties up with Gharpay to introduce advance payment, a premium online retail store that has raised fund of $ 5 million from seedfund, introduces payment mode “Cash Before Delivery”. Fetise has collaborated with Gharpay, a doorstep cash payment network company to introduce CBD model. According to company statement, eCommerce Companies are looking at different ways and means to improve their working capital and cash flow which has given rise to “Cash before Delivery”. Although the concept of CBD is being practiced in the industry from past some years, however sees this so far not popular mode as a silver lining for the e-commerce sites to improve their cash flow and working capital that is needed to run the business and keep it afloat.

Expressing his view on this development, Mahesh Murthy, Founding Partner-SeedFund said “The team from Fetise has done a lot of research before coming up with the idea of “Cash Before Delivery” (CBD). It is an advance payment option that Fetise is offering its customers to pay for the goods bought online. “We’re happy to see Fetise’s innovation of Cash Before Delivery (CBD) as a method to get the best of both worlds – to allow those without plastic money to get the benefits of online shopping, as well as to reduce the overall cost to users by reducing the cost of returns or undelivered goods”.

The Mumbai based nine month old start up has been registering phenomenal growth and reportedly grew in triple digits. The CBD payment mode seems to be another in a long line of innovations that the industry needs to form a financially prudent set of practices that allow e-commerce ventures to be a profitable business proposition. At present service is rolled out in 14 cities and will be scaled up to pan India in three months.

 The ecommerce industry in India has seen unprecedented rise and evolution of Cash on Delivery (COD), which accounts around 40 to 50 percent of total orders invoiced by most of the e-tailers. “Meanwhile, COD mode is being preferred by consumers, however it is not really helping the e-commerce companies as some of the customers place an order online simply to test if the COD model really works and return the goods at the last minute” said Abhishekh Shah,CEO,

Iamwire Byte 

CBD may look only as a small innovation over COD (Cash on Delivery), but it is expected to have a much far fetching implications on ecommerce ordering and delivery management system. Iamwire has put its thought behind future potential of CBD and likely impact on everyday business operation and strongly believes that paying cash in advance can

  • create a last but one mile in place of the last-mile in the form of COD (as COD is only a last mile process)
  •  act as a guaranteed Advance payment to ensure the cash in hand before advancing the actual delivery of goods, hence minimizing the Returns on delivery which can lead to better inventory and cash management
  • help the online Company get very short term working capital in advance as the next day (Day T2) working capital requirements can be met with CBD collections done on Day T1
  •  act as a strong incentive for only serious online buyers, and at the same time reduces the “trials and test” customers from actually placing the order.

It’s in future whether CBD will find greater popularity among various payment options, as its success will depend upon multiple factors including business consumer strategy, risk of collecting / carrying cash in remote locations and faster time to market (simply put, sooner the product reaches in customer’s hands, better the rate of acceptance and lower the rate of Returns). Meanwhile, it sure looks to be an Indian innovation over COD.


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