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Cash on delivery is a big pain point from an economics and logistics perspective-Kunal Bahl, Snapdeal

21-November-2016
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Cash on delivery is a big pain point from an economics and logistics perspective-Kunal Bahl, Snapdeal

The recent demonetisation drive may have impacted the e-commerce sector given the fact that more than 60% of the transactions involved cash on delivery but despite the difficulties faced by the ecommerce players, the demonetisation move is seen as something that will help the sector in the long run.

Speaking exclusively to exchange4media, Kunal Bahl, CEO, Snapdeal articulated on how the government’s new move will impact the sector in the long run. Bahl pointed out that the demonetisation move has been seen as a welcome development from the investor community.

Speaking about how investors see this move as beneficial in the long term for the sector and the economy, Bahl said, “There is a homogenous positivity from the investor community because the investors are typically long-term oriented and their assessment of the policy change is always whether in the long term is this better or is this worse and homogeneously long term is the right thing to do so it (demonetisation) will have a positive impact on companies.”

 Deeming the move as groundbreaking, Bahl goes on to say, “This is absolutely groundbreaking what has happened, not only for our businesses, but for our nation. A lot of people prefer cash on delivery because they want the product to come to them before they actually pay for it. So that can still happen if deferring your payment to the point of receiving of the product was the main problem. We can still achieve that through card on delivery or through payment by wallets.”

Explaining how Snapdeal had already popularised the use of digital payments much before the demonetisation drive, Bahl added, “15% of our transactions were already using wallets on delivery and people want to now pay using digital instruments, the reason being that all the cash has been sucked out of the economy. So, overall it’s extremely encouraging. What we are witnessing is a surge in digital payments and I believe it will come down a little bit after the cash comes in but the equilibrium will settle at a higher level than what we first entered before this demonetisation phase. It is important also from an economics perspective as the cash on delivery is a big pain point from an economics and logistics perspective. I believe that will get significantly mitigated going forward as more and more payments move to digital.”

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