Amazon India is launching a pilot project to test India Post’s Cash-On-Delivery service. The company has also announced its Guaranteed ‘One-Day Delivery’ to customers in India.
Talking of its COD project, an India Post official, who declined to be named, reported The Economic Times “We are trying to add capabilities like cash on delivery and reverse logistics. Consumers don’t want to make an upfront payment. We are developing software to start the cash-on-delivery service with Amazon.” The report also mentions that the move will escalate the competition in the “still-nascent but burgeoning eCommerce industry” if the project turns out to be a good success.
With over 150 years of service, India Post has one the largest distribution networks in the country. It has more than 155,000 post offices across India, out of which 89 percent are located in rural areas.
Amazon announced that both of the services will only be available for items fulfilled by Amazon, as it currently operates in India through an online marketplace, where third-party merchants sell their products. According to Amazon’s FAQ page, the COD service however will only be available on items tagged “Fulfilled by Amazon” and with the message “Eligible for Cash on Delivery” on the product details page.
The ‘One-Day Delivery’ service is limited to selected pin codes across several Indian cities including Bangalore, Mumbai, New Delhi, Ahmedabad, Hyderabad and Pune. Customers in eligible pin codes can now choose ‘One-Day Delivery’ at the time of checkout.
The company also announced that the consumers opting for COD wouldn’t have to pay extra charges as of now, however a “convenience fee” of INR 39 will be charged at a later stage.
COD plays a significant role in the Indian eCommerce market, and is here to stay. Owing to its convenience and its cultural affinity this will be a major part of payment mechanisms for atleast for a few more years. With Amazon trying to integrate COD among its delivery options, chances are that this will provide Amazon an advantage over its local rivals in India and help boost its sales.
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