Demonetization In E-Commerce
Demonetization is the hottest new topic in the country. Financial experts are talking about what the long-term effects could be while several businesses and people are caught up in the exceptional cash crunch that has been caused. With the retail business achieving all new dimension, thanks to the growth of internet, the business models and the payment methods have all changed. And this difficult model is now further complicated by the introduction of demonetization. Though it is true that this can lead to a more positive effect in the long term, talking about the short term consequences, it has been primarily adverse for the customers and businesses. On November 8th, 2016 eve, Prime Minister Narendra Modi, in his televised address to the nation, …show more content…
Flipkart, Amazon, Snapdeal and many other online shopping sites are ruling the retail segment. These e-commerce sites, however, took an unexpected shock in their revenue soon after the announcement of the ban on the higher denomination currency …show more content…
All the overheads and the costs incurred in shipping the orders go a waste in case of undelivered orders. This is indeed a significant loss for the e-commerce players.
Reduction in a Number of Orders:
As a major chunk of orders placed on the online sites is paid with cash on delivery, demonetization had a detrimental effect on the number of orders placed. People only had to wait to get their old currencies to be exchanged and few of the customers are skeptical about online payments. This lead to a notable surge in the number of orders placed on the online shopping sites.
Short-term Impact on E-commerce Partners:
Stagnant goods, returned undelivered orders, reduction in the cash flow, all together came as a severe blow for the e-commerce partners. But economists, as well as the e-commerce business sectors, believe that this effect is a temporary one and that the long-term impact is going to make things better for them.
Patching up the
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