COD is still how a large share of Indian ecommerce is paid for. It also carries almost all of the risk.
The trade-off
COD gives you a wider addressable market, higher conversion in tier 2 and tier 3 cities, and trust from first-time buyers.
COD costs you a per-order COD fee, a delayed remittance cycle, and an RTO rate that is typically several times higher than prepaid.
Shifting the mix without losing orders
- Make prepaid the default at checkout, with COD available rather than pre-selected.
- Offer a small prepaid incentive. A 3-5% discount is usually cheaper than the blended cost of a COD order.
- Cap COD above a value threshold, or on SKUs with a history of returns.
- Add UPI intent at checkout. For many buyers the friction, not the intent, is the blocker.
- Confirm high-value COD orders over WhatsApp before you ship.
What to measure
Track contribution margin per delivered order for prepaid and COD separately. Most brands discover COD looks fine on revenue and much worse on margin once RTO freight is included.
RoutikQ reports RTO and delivery performance split by payment mode, so the comparison is based on your own data rather than an industry average.