India Cash on Delivery: What affiliates need to know

Cash on Delivery (COD) is a popular payment method in India’s burgeoning e-commerce market, even though we’re seeing digital wallets and UPI transactions on the rise. For affiliates working in the space, understanding how India’s COD market works can make a big difference to your affiliate business and overall success.

In this article, we’ll explore the differences between the European COD e-commerce marketplace and India Cash On Delivery structure, highlighting new trends emerging in this market and explain why faster payments through India via COD is a game-changer for affiliates to be investing in early.

COD in India vs. Europe: Key Differences for Affiliates

While Cash on Delivery as a payment mechanism is available in Europe, it doesn’t have the same cultural importance as it does in India. In Europe, digital payments have largely replaced COD for most customers and clients are more easily accessing bank accounts and debit and credit cards are widely available too.

As such many European consumers tend to trust online payment systems more and are often more familiar with various forms of buyer protection, which makes them less dependent on paying cash at the time of delivery.

India, however, is a different story.

In India, COD remains one of the most preferred payment methods, especially in tier 2 and 3 cities. This preference is due to a combination of factors such as lower trust in online payments, a large unbanked population who predominantly prefer to still purchase on a cash basis, and issues around access to digital payment methods.

For many Indian consumers, paying cash when a product arrives feels more secure.

For affiliates, this difference means a few things:

1. Higher Conversion Rates for COD Offers:Affiliates promoting COD offers in India are more likely to see higher conversion rates compared to European markets. The payment barrier is lower in India, as many consumers won’t complete a purchase if COD is not available. It’s essential for affiliates to promote COD-friendly offers in their campaigns to tap into this behaviour.
2. Different Affiliate Models:In Europe, affiliate marketing often focuses on promoting high-value products, with digital payments leading to instant conversions. However, in India, the average order value might be lower due to COD restrictions. Some brands may limit COD offers to less expensive items because they are riskier in terms of non-delivery or returns. Affiliates need to adjust their strategies to promote products that are popular in COD transactions.
3. Return Rates: Return rates for COD purchases are higher in India compared to Europe. European consumers tend to keep their purchases more often because they’ve already paid. In India, though, many customers refuse delivery, leading to higher return rates. Affiliates should be aware that returns can impact their commissions and work closely with advertisers who have efficient COD handling processes.

Diwali 2024: Seasonal Trends for India’s COD Market

As Diwali approaches, the e-commerce market in India heats up. It’s the biggest shopping season of the year, and customers are looking for deals across all sectors, from fashion to electronics.

For affiliates, this presents a golden opportunity, but it also comes with some unique challenges in 2024.

One of the major trends we’re seeing this Diwali is a cap on big branded offers. While large brands are offering discounts, many of them have set strict budget limits for their offers.

This is due to a mix of inflation, increased production costs, and a more cautious approach to marketing spend. What does this mean for affiliates?

1. Opportunity for New Brands:Smaller, lesser-known brands are taking advantage of these capped budgets by offering deeper discounts and more flexible COD options. Affiliates can seize this chance by promoting these brands, which are more willing to push aggressive campaigns during the festive season.
2. Hyperlocal Targeting: Many advertisers are focusing on regional markets and offering COD for specific cities or regions. For affiliates, this means tailoring campaigns to target customers in certain areas where COD is popular. Using location-based promotions can drive higher conversions, especially in non-metro areas.
3. Limited Stock and Time-Limited Offers:Because some big brands have capped budgets, there will be more focus on limited stock and flash sales. Affiliates can tap into this urgency by promoting limited-time COD offers, which are bound to attract customers looking for Diwali deals.

Faster Payments Through India COD Offers

One of the biggest pain points for affiliates in the Indian market has traditionally been slow commission payouts. When promoting COD offers, the affiliate’s commission often gets delayed because the payment cycle only begins once the customer pays the courier. For years, this lag has been a downside to promoting COD.

Our CEO also detailed this on a recent podcast with Josh Sebo from OfferVault. You can listen to the full episode and the numbers that were shared here

However, 2024 has brought some improvements.

Many e-commerce platforms and advertisers have introduced faster payment solutions for COD transactions, which benefit both affiliates and advertisers.

1. Shorter Payment Cycles:Traditionally, it could take weeks for a COD transaction to be completed, leading to delays in affiliate payments. Now, thanks to technology and better logistical support, payment cycles have shortened. Affiliates promoting COD offers can now receive payments much faster, sometimes within days after a successful transaction.
2. Advanced Payment Systems:Some platforms are offering advanced payment options to affiliates, which allow them to get a percentage of their commission upfront, even before the COD is collected from the customer. This is a major win for affiliates who need better cash flow to fund their campaigns.
3. Secure COD Payments:With improved logistics and courier partnerships, the risk of non-payment or refusal at the door is being reduced. Affiliates working with brands that offer these secure COD payment options can expect fewer returns and a smoother commission process.

Why investigate COD in India as an Affiliate?

For affiliates working in and outside of India, COD remains a key driver of e-commerce success in this locality. If you are expanding your affiliate business globally you should be looking at advertisers who can run their offers with COD payments. It offers higher conversion rates for your traffic and you could be tapping into a huge audience that still prefers cash over digital payments and is largely being ignored as a growing affiliate marketing trend. The Indian market, especially during festive periods like Diwali, offers a wealth of opportunities, but it’s essential to understand how COD functions differently from European markets.

By leveraging new trends, promoting emerging brands, and taking advantage of faster payment cycles, affiliates can maximize their earnings from India’s COD market this Diwali and beyond.

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