COD Mode Of Payment Accounted for Nearly 55.5% of the Total Purchases Made for Online Consumer Electronics Products

Online consumer electronics refers to buying and selling of consumer electronics products over the internet. These business transactions can be mainly classified into business-to-business (B2B) and business-to-consumer (B2C). The rise in demand for convenience shopping as well as the penetration of internet among the population has led to the growth of consumer electronics market at a fast pace. The market has also flourished as it has been able to offer steep discounts on the prices of the products offered and attract customers away from the brick and mortar shops.

According to the Research Analyst, Ken Research Marketplace model is the most commonly implemented business model in India online retail market. An online marketplace model involves facilitating transactions between buyers and third party sellers who can interact with each other directly. Under a hybrid model, an electronics store operates in twin ways, through online as well as physical stores. There tends to be no usage of dedicated warehouse for online or offline orders exclusively under this model as both the markets are served by the same store itself. This model requires heavy investments in infrastructural facilities, since it is suitable to a chain of stores and is not recommended for a single store as they can cover a larger area.

India’s online consumer electronics market has been broadly classified into product categories namely mobile phones & accessories, home & kitchen appliances, computers, peripherals & accessories and photographic equipment & accessories. Amongst all the product categories, mobile phones and accessories have contributed the maximum revenue towards the India online consumer electronics market during the period FY’2012-FY’2015. The second largest product category in the India online consumer electronics market has been home and kitchen appliances. The most popular products in this category were irons, microwaves, coffee makers, food processors, electric kettles and toasters among others.

India online consumer electronics market can be segmented on the basis of sales contribution from different cities. Initially, the demand for online consumer electronics was derived majorly from Tier I cities, mainly Delhi, Bangalore, Mumbai and Pune. On the other hand those in the tier II and tier III make online purchases due to non-availability of products. Bigger electronics brands do not find it viable to open showrooms and outlets in small towns and therefore e-commerce has been regarded as the perfect means to deliver their products to those who can afford from tier II and tier III cities.

E-commerce companies introduced the concept of COD in the Indian market to acquire the trust of first-time users. According to the Indian mindset, consumers prefer to look and physically feel the product and make decision of whether to purchase the product or not. Debit Cards have been observed to be the second most popular mode of payment while purchasing consumer electronics online in FY’2015. . Net banking is a similar method to debit cards through which payment is made from money existing in the user’s saving or current account. However, to complete the transaction the buyer is required to enter net banking id and pin, which makes it complex than card based payment methodsl, according to the Research Analyst, Ken Research.