Within a year of joining the
e-commerce bandwagon as a distribution channel, government entity India
Post has transacted business worth Rs 280 crore in the Cash-on-Delivery
(CoD) segment alone for firms like Flipkart, Snapdeal and Amazon.
While the amount of revenue generated for itself could not be
ascertained, government officials said India Post is very keen on
developing its e-commerce related services as a major revenue model
going ahead.
"India Post collected over Rs 280 crore from consumers and gave it to
e-commerce firms, since CoD facility was started in December 2013. The
department with its huge network can serve as the best agency for not
just delivering products, but also collecting money," a government
official said.
However, this is a small chunk of the overall market size for e-commerce
in India, which runs into billions of dollars already and is growing at
a fast pace every year.
CoD has emerged as one of the most sought after services for e-commerce
entities and 50-75 per cent of orders are placed with various online
retailers with this payment option, while the remaining opt for credit
card or bank payments.
In India, customers tend to prefer CoD as the online payment modes are
yet to catch up in many parts of the country while many people are not
comfortable with advance payments for products purchased online.
India Post's cash handling services like core banking solutions, money
transfer and a robust account system can further help e-commerce firms
in collecting cash from users in urban as well as rural areas, the
official said.
India Post has about 1.55 lakh post offices, making it the world's
largest postal network. On an average, a post office serves 21.21 sq km
area and about 7,175 people.
Another official said various e-commerce firms have been using India
Posts CoD facility since it was introduced. Firms like Flipkart,
Snapdeal, Amazon, Shopclues, Naaptol, Telebrands and Homeshop18 are some
of them.
India Post has set up booking counters in the premises of some customers
like Amazon and Naaptol, while for Snapdeal it is exploring setting up
of e-commerce booking kiosks in post office locations.
Communications and IT Minister Ravi Shankar Prasad has also said
previously that India Post is best suited to offer delivery services to
e-commerce players, given its wide reach across rural, urban and
semi-urban areas.
The Minister has directed officials from the Department of Posts to focus on opportunities in e-commerce sector.
India Post is also ramping up its infrastructure to grab a major chunk
of the distribution, delivery or logistics, which will touch about $9
billion by 2021. According to market experts, e-commerce business in
India was about $6 billion in value in 2012 and is expected to touch $76
billion by 2021 of which distribution, delivery and logistics
constitutes around 12 per cent.
Source : The Economic Times