India Post Turns Saviour of Ecommerce Industry In Rural Areas. Collects Rs 280 Cr For COD Orders

Ecommerce industry in India is going through an exciting phase of exponential growth from all quarters.

But there exists two major problems which are hindering it’s all out growth:

a) Delivery of orders from rural areas, as there is no effective last-mile delivery option in these areas. India is a huge country, and the next wave of ecommerce growth would be witnessed in 2-tier and 3-tier cities, rural areas and finally villages.

b) Payments: Customers from urban locations can easily make the payments via online banking or credit cards and get it delivered seamlessly. But those customers who doesn’t have net-banking or credit cards rely on Cash on Delivery mechanism to fulfil their orders.

India Post has suddenly emerged as the savior of ecommerce industry, as it can provide solutions to both of these problems, without any hassles. Infact, India Post has become the catalyst which Indian Ecommerce desperately needs now.

Last year in December, India Post had initiated a unique partnership with major Indian ecommerce portals such as Flipkart, Amazon, Snapdeal and more to collect cash from cash-on-deliveries. And the results are fabulous to start with. As per a Government official, in the last 12 months, India Post have collected Rs 280 crore via Cash on Delivery mechanism for ecommerce portals.

As per the statement given by Government Official, “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.”

How India Post Can Help Ecommerce Portals?

India Post is world’s most widely distributed postal system with 154,866 post offices all over the country and 466,903 employees. As of March, 2011, 90% of all post offices are in rural areas. On an average, a typical post office covers 21.23 square kms, and serves 7114 citizens. The whole nation-wide network of post offices is divided into 22 circles, thereby covering each and every nook and corner of the nation.

Although Rs 280 crore is a small chunk of the payments received by ecommerce portals, but a significant number. Orders worth $3.5 billion or Rs 21000 crore were made on various ecommerce portals in 2014, which is expected to rise to $6 billion or Rs 36000 crore by 2015. And as discussed earlier, the next wave of growth is coming from non-metro areas.

And, considering that 50-70% of all orders made on ecommerce portals constitute of COD medium, India Post can actually become one of the biggest platforms for ecommerce industry in the coming days.

Additionally, Amazon still uses US Post, which is America’s national postal service to deliver the goods. There is no reason, not to believe that the same model can be replicated in India as well.

India Post has certainly transformed itself, as critics had earlier declared that India Post will die a natural death as people no more use post cards and stamps to communicate, as emails and instant chat messengers are mainstream now.

By using their existing infrastructure all over the country, India Post has emerged as a feasible, economical and powerful medium for effective and efficient ecommerce deliveries.