Jayon Express: 30% of Indonesian E-Commerce Consumers Prefer COD
Adjie Priambada - 14 November 2014
It seems that Indonesians are still accustomed to Cash-on-Delivery (COD) payment method a lot. Jayon Express delivery service provider claimed that 1 of 3 customers using its services prefer the payment to be done via COD. The ratio is even higher than last year, when 1 out of 5 customers prefer the COD payment system.
According to the data published by Singapore-based Jayon Express, the most popular category is “Book & Magazines” which got increased up to 400% in less than a year. The next categories in line are “Infant & Children”, “Fashion & Accessories”, and “Health & Beauty”, indicating that it is women who actually always look for COD payment system rather than any other payment methods.
The citizens of South Jakarta became the ones who desire COD the most, as they dominate one third of total deliveries. The number then followed by the ones living in Central Jakarta, East Jakarta, and West Jakarta. Citizens of Tangerang, Bekasi, and Depok contribute much less to this figure.
Eddy Yusof, Jayon Express Indonesia’s General Manager stated in his press release, “Consumers change the way they pay orders from e-commerce websites. This becomes a suggestion for e-commerce providers to include COD as one of their alternative payment methods.”
“Considering that the price of fuel is on the verge of increasing, more people will prefer shopping online as it may reduce the fare they have to spend,” he added.
The increase of number of users who shop via e-commerce is apparently not in line with the trend of people’s trust towards e-commerce. As a matter of fact, even though the number of transactions in the third quarter of 2014 almost doubled the number in the fourth quarter of 2013, which reached 7451 deliveries, the ratio of users choosing COD method inreased from 1:5 to 1:3. This means that out of 3 customers, one of them has slight or even no trust toward the e-commerce, thus he prefers paying on the spot.
Actually, Lazada had already seen this trend coming, as the company stated that the customers’ satisfaction level towards e-commerce websites only reaches 75-80%, which means that Indonesians’ trust toward e-commerce is not that high. Therefore, they prefer COD method more, as their money won’t go anywhere before their orders are on their own hand.
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Another point that can be concluded from the data is that the average price of items being paid through COD gets lower, from Rp 462 thousand in the third quarter of 2013 to Rp 408 thousand in the fourth quarter of 2014.
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