Shopping on Credit almost doubles this Diwali for eCommerce Consumers, COD dips significantly: GoKwik

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Credit has almost doubled this festive season largely led by Credit Cards and Buy Now, Pay Later (BNPL) options for D2C brands on GoKwik’s network. The preference for credit surged from 3.49% to 6.9% this year thus indicating healthy economic performance and increased consumer sentiment.

This Diwali sale period shoppers showcased a higher preference for prepaid payment modes with a 13% surge in prepaid orders compared to last year. On the contrary, cash on delivery (COD) orders saw an 8% dip in the same period, reveals GoKwik, India’s leading eCommerce enabler that helps brands improve profits and efficiency by reducing COD orders.

COD (Cash on Delivery) is a payment method where customers pay upon receiving their goods. This can build trust with buyers wary of online payments, especially in areas with fraud concerns. While COD enables businesses to access a wider customer base in Tier 2 and Tier 3 regions, it can also cause cash flow delays, higher return rates, and increased logistical costs, potentially impacting profitability.
However, COD in India still continues to be dominant at 46% followed by UPI at 44%.

“Affordability has always been a key driver for eCommerce growth in India, with shoppers opting for more flexible payment choices. We’ve been focused on building an ecosystem that supports this innate need among Indian shoppers. By offering multiple prepaid options on our checkout, we have not only provided more affordable payment choices to shoppers, but also provided greater control to merchants over their growth. Having a higher prepaid share of orders helps brands mitigate the impact of return to origin (RTO) and enables profitable growth for them. Our efforts in this direction have started to show the much needed shift in consumer preference,” said Chirag Taneja, Co-Founder and CEO, GoKwik.

Categories such as footwear and fashion have seen the highest preference for credit-based prepaid payments while certain other categories like beauty and personal care continued to show high preference for COD.

Another interesting trend during this festive period is the shift in consumer preference from COD to credit payment options such as credit cards and BNPL in tier 3 cities.

Rohit Prasad, MD & CEO, Easebuzz, added, “We are happy to support GoKwik during this festive sale period. With an exceptional 99.9% uptime, Easebuzz platform empowered D2C brands manage millions of transactions without any downtimes, a crucial advantage during peak shopping periods. Our extensive payment acceptance methods, affordability suite with BNPL & EMI options, coupons and rewards during checkout helped these brands deliver a superior shopping experience for their customers.”

While overall Average Order Value (AOV) rose by a nominal 3% during this period, categories like fashion and jewellery saw particularly strong growth at 15% and 13% respectively. Categories with high AOV products like electronics saw a 36% increase in credit card payments and a 27% increase in BNPL, showing that shoppers prefer these payment methods for high-value purchases.

GoKwik houses over 10000 brands in its network including Lenskart, Neemans, Man Matters, Shoppers Stop, etc, ranging from fashion, beauty, health and nutrition, electronics and other key categories of the online shopping space. The eCommerce enabler houses over 120Mn shoppers in its network of D2C brands.