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UPI is rising, but cash on delivery still drives India’s e-commerce beyond metros
Our read
India e-commerce will not kill CoD; it will turn it into a risk-priced service, with UPI winning repeat buyers while CoD remains the acquisition engine beyond metros.
For operators
Treat cash on delivery as a conversion engine beyond metros, using AI risk scoring, address validation, partial CoD and prepaid incentives to reduce return-to-origin losses without suppressing demand.
Watch
UPI’s share of e-commerce checkout value versus its share of completed orders, especially outside the top metros.
The report,
Cash on delivery remains dominant in Indian e-commerce, particularly beyond metros, despite UPI adoption. Brands including Miraggio and Sirona are using AI risk scoring, address verification, partial CoD, BNPL and UPI mandates to reduce return-to-origin losses and working-capital pressure.
Channel facts
From the report. Source details below
| Miraggio: | CoD is 44% of orders and 42% of revenue |
|---|---|
| Sirona Hygiene: | CoD is more than 20% of shipped orders |
| Meesho: | CoD estimated at 72-75% |
| Amazon: | CoD estimated at 35-40% |
| Fashion e-commerce: | CoD estimated at 20-50% |
| CoD RTO rates typically range from | 20-30% |
| AI interventions reduced RTO rates by | 5-7% |
| Sirona cut CoD share from over 50% to | about 20% |
Also in the report
- CoD accounts for around 60% of e-commerce orders
- CoD reaches 75% in Tier-II and smaller markets
- CoD is less than 5% of quick-commerce orders
What it means for online and offline
Prioritise partnerships or acquisitions in fraud scoring, address intelligence, logistics orchestration and prepaid-conversion tools that help merchants optimise—not eliminate—CoD.
Signals to track
- RTO rate changes after OTP, partial-CoD and prepaid-incentive experiments; monitor conversion loss alongside RTO reduction.
- Carrier-level first-attempt delivery success, fake-address incidence and delivery refusal rates by pin code.
- Whether marketplaces introduce broader CoD fees, customer-side deposits or seller penalties for avoidable RTO.
- Growth in repeat-purchase prepaid adoption after a customer’s first successful CoD delivery.
- Category-specific CoD restrictions in fashion, beauty, electronics, bulky goods and low-ticket impulse products.
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- Regulatory or platform changes affecting UPI autopay, refund speed, digital identity verification or cash-handling costs.
Likely next moves
Our read of what comes next — analysis, not reported by the source.
- Build a pin-code, customer-cohort and SKU-level CoD profitability model that includes RTO freight, reverse logistics, inventory ageing, support costs and lost conversion from payment restrictions.
- Deploy graduated payment rules: unrestricted CoD for trusted cohorts, OTP confirmation for medium-risk orders, and partial advance payment or prepaid incentives for high-risk combinations.
- Make prepaid benefits concrete: guaranteed faster dispatch, instant UPI discount, priority support, frictionless refunds and loyalty rewards rather than generic couponing.
- Use address intelligence before fulfillment, including geocoding, landmark validation, prior delivery success, duplicate identity checks and local carrier serviceability scores.
- Route high-RTO CoD orders to the carrier or local delivery partner with the strongest attempt-success rate, not simply the lowest forward-shipping rate.
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- Create win-back journeys after successful CoD deliveries to convert verified customers to UPI on their second and third orders.
- Adjust inventory allocation so high-CoD, high-RTO pin codes are served from closer fulfillment nodes where reverse-logistics exposure is lower.
The counter-case
The case against this reading — not reported by the source.
The signal may overstate CoD’s durability by treating a transitional trust and access problem as a structural endpoint. UPI adoption, improving delivery reliability, consumer familiarity with refunds and stronger prepaid rewards could shift payment behavior faster than current order-share figures imply. Optimising CoD also has diminishing returns: fraud scoring, address verification and partial advances add checkout friction, operational cost and potential false declines that can suppress the very conversion CoD protects.
The source
Published
First seen