Amid a boom in online sales in India over the past few years, cash on delivery is still the most preferred payment option for buyers who shop online, a recent survey has indicated. Among other payment methods, cash on delivery, or COD has topped the preference list a staggering difference of nearly 30 per cent between itself and and UPI orders, e-commerce enablement company GoKwik said on Thursday.
However, the number of transactions through the Unified Payments Interface (UPI) has seen a steady increase over the past one year on GoKwik’s platform, the e-commerce enabler revealed on Wednesday.
Data from GoKwik shows that 64 per cent of all orders were placed via COD in Q2 2022, although preference for UPI has also increased by nearly 20 per cent in the last one year.
The average order value (AOV) for both COD & UPI payment modes have increased on the GoKwik network in the last one year, partly driven by inflation, said the company in a press release.
“However, the AOVs for COD have been higher than the AOVs on UPI in the last two quarters of 2022 which could arguably indicate that there is still a lack of trust in ecommerce websites which deters customers from buying high valued commodities through prepaid payment modes,” it added.
Indian e-commerce merchants, compared to their global counterparts, have always had to deal with low trust challenges in Indian consumers and the data on the GoKwik network supports that, GoKwik said further.
Meanwhile, desktop users have shown the highest preference for UPI compared to mobile users. Mobile users had the lowest preference for UPI in Q2 2021 at 15.6 per cent which improved by more than double to 36.7 per cent by Q2 2022, but was still lower than desktop users at 42 per cent.
While Android users had the highest COD preference in Q2 2021 at 85 per cent compared to Apple Macbook users, this trend subsided to 64 per cent by Q2 2022. Unlike other desktop users, Mac users have shown an upward trend for COD preference from 55 per cent in Q2 2021 to 75 per cent in Q2 2022, while iOS users have shown a declining trend for COD preference in the same time period, said GoKwik.
The preference for COD reduced significantly in High GDP regions from 82 per cent in Q2 2021 to 56 per cent in Q2 2022, however, the preference for COD still remains very high for medium and low GDP regions (above 65 per cent) in Q2 2022, as would be expected, it added.
Commenting on the results, Chirag Taneja, CEO and co-founder of GoKwik said, ““Transactions made on our network over the last one year clearly show that COD isn’t going away anytime soon but customers are also growing comfortable to use pre-paid options. With increased penetration of mobile phones and faster Internet connectivity, customers’ preference to make payments on D2C websites via UPI is increasing year on year. The trend can also be attributed to the several interventions rolled out on our checkout to improve prepaid conversions.”
GoKwik helps D2C brands increase their conversion rates, reduce the return to origin (RTO) and improve gross merchandise value (GMV) realisation. The company’s clients include big names like Shoppers Stop, MyGlamm, Boat, The Souled Store, Superdry, GAS, and Mamaearth among others.
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