Snapdeal Gold helps company reduce cash on delivery

By Karan Choudhury , Business Standard, New Delhi | In Digital | October 05, 2016
The company, which recently undertook a rebranding exercise, played a masterstroke by starting a service to effectively reduce COD.

Gurgaon-based online marketplace giant Snapdeal has managed to bring down the cash on delivery (COD) component to 50 per cent, on the back of its free service upgrade Snapdeal Gold, which is available on orders paid for at time of buying.

The company said offers from banks led to a record increase in users selecting prepaid options. "In the first two days of the Snapdeal Unbox Diwali Sale, more than 50 per cent of users opted to pay by credit and debit cards, net banking and FreeCharge wallet to avail attractive bank offers, interest-free EMIs and free shipping," the company said.

COD is a major pain point for online marketplaces, as the percentage of return is higher. Also the logistics required for the cash to reach the company make it an expensive proposition. According to sources, the COD component before the firm launched Snapdeal Gold was around 70 per cent. The company believes by end of this year it would be able to bring down COD even further. "We are excited to see an overwhelming response to our newly-launched Snapdeal Gold service."

We are confident that customers will have the best experience with Snapdeal this Diwali," Jayant Sood, chief customer experience officer at Snapdeal, said.

The company, which recently undertook a rebranding exercise, played a masterstroke by starting a service to effectively reduce COD. However, unlike Amazon Prime and Flipkart First, Snapdeal is not charging for this service.

Snapdeal Gold is a free service upgrade available anytime a user makes payment at the time of booking the order.

"Users have welcomed the launch by consistently upgrading to SD Gold, as it offers them a meaningful benefit at no extra cost," said a Snapdeal spokesperson.

"SD Gold is a simple scheme that changes current consumer behaviour to make it win-win. Consumers get shipping for free and Snapdeal gets to save the costs associated with COD orders. Consumers don't like to pay first to save later, hence the SD scheme is suited to Indian sensibilities," said a senior analyst from an international consultancy firm.

Snapdeal shipped a whopping 400,000 packets in a day from its biggest logistics facility in Delhi, even as its warehouses across the country shipped thousands more, as orders poured in from more than 16,000 pin codes across India. Fast shipping was made possible by having a majority of fast moving products quality checked and ready for dispatch in advance, based on an accurate assessment of demand using predictive data analysis.


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