November 30, 2014
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
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