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Savitar Jagtiani, Head of retail major Landmark Group’s e-commerce unit LandmarkShops.com.
Cash on delivery payment method is increasingly getting popular in the UAE for the e-commerce players because residents feel more comfortable with this mode of payment.
Savitar Jagtiani, Head of retail major Landmark Group’s e-commerce unit LandmarkShops.com, said the first financial year saw average sale growth through cash on delivery (COD) was 54 per cent which has grown to nearly 65 per cent as the e-commerce platform nears completion of the second year of operation.
“We read research reports that in Middle East and India, cash on delivery can account from 50 up to 80 per cent of online retailers’ transactions. So the data is in sync with the research kind of data here as well. And we have also seen increase in this segment,” he said.
“It’s general kind of preference, people feel more comfortable with this kind of mode of payment. It might be more natural. Traditionally and historically cash is more natural way of dealing in retail. It’s preference. We know the economics of it all; we know cash on delivery returns are higher, the cost can be higher. From an online ecommerce point of view, we have to be very watchful of these kinds of things,” he added.
Nearly 60 per cent of online transactions in the UAE and Middle East are done by cash on delivery and this has also led to the growth of courier companies offering a COD service.
Asif Keshodia, CFO of Souq.com, recently said COD currently accounts for over 70 per cent of payments on the website.
Landmarks’ Jagtiani aims to substantially increase group’s online sales with the addition of the remaining nine retail brands to its portfolio. Currently, LandmarkShops.com is home to Splash, Babyshop, Emax , Lifestyle and Max.
The group recently partnered with Standard Chartered Bank and MasterCard in the UAE to launch two co-branded credit cards as part of its Shukran retail loyalty programme, hence helping the group to give fillip to its e-commerce segment.
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