Cash on Delivery (COD) is the dominant e-commerce payment model in India, accounting for over 60% of all D2C apparel purchases. Consumers select COD at checkout to eliminate financial risk against online scams and verify physical package arrival before releasing funds. While offering COD dramatically boosts storefront conversion rates by 2.5x to 4x, it introduces operational risks including higher Return to Origin (RTO) rates and courier remittance delays.
The Dual-Edged Sword of COD for Indian Clothing Brands
In Tier-2 and Tier-3 Indian cities, consumer trust in unknown digital brands is fragile. If a new streetwear brand only offers prepaid payments, checkout abandonment can exceed 85%. Offering Cash on Delivery acts as an instant trust badge, unlocking millions of eager shoppers.
However, COD requires sophisticated financial management: couriers charge an additional ₹30 to ₹50 COD handling fee, cash remittance takes 3 to 7 days to settle, and impulse buyers frequently reject parcels at the doorstep, triggering RTO losses.
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