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India’s love of cash has created a tricky problem for Amazon

14 January 2016

From Quartz India:

Giant e-commerce companies are finding that cash is still king in India.

Roughly half of Amazon customers in India pay for delivered goods in cash, creating a tricky logistical situation for the Seattle-based e-commerce company.

In many cases, thousands of local shops across the country serve as pick-up locations for customers to retrieve their orders, according to Fortune. In exchange for that service, Amazon pays out small commissions per package to the shop owners.

Not only does the cash-for-delivery model require significant investment to manage, it also leads to a higher return rate, said Kartik Hosanagar of the Wharton School at the University of Pennsylvania. That’s because a person feels less committed to the product until they’ve paid for it. When you click a buy button and money instantly leaves your account, there’s a greater sense of finality than when you have an item shipped, wait, and then pay with cash.

. . . .

 And even if it isn’t the first company many Indian customers consider using, the next decade is expected to yield big growth for Amazon, said Deutsche Bank analyst Ross Sandler in a recent report. In an October financial release, Amazon reported third-quarter active customer numbers in India grew 230% year-over-year.

Link to the rest at Quartz India

PG wonders if there’s a cash payment option for Kindle ebooks in India.

Amazon, Non-US

6 Comments to “India’s love of cash has created a tricky problem for Amazon”

  1. PG wonders if there’s a cash payment option for Kindle ebooks in India.

    In an October financial release, Amazon reported third-quarter active customer numbers in India grew 230% year-over-year.

    Evidently there is or Amazon has found a workable substitute.

    • I expect you’re right, Antares.

      • I almost went to check if there was a cash payment option for Kindle ebooks in India! But no there isnt, its good old credit and debit cards and netbanking only 🙂
        The e-tailers in India including, or especially, Amazon, are growing because of demand from the smaller towns that dont have malls or the like in their vicinity. Also the cash option makes it a more attractive proposition for customers who either may not have accounts or are unwilling to transact online.

  2. The headline on this made me do a double take. Sometimes, it’s really peculiar having a geographical name. 😀

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