Reducing Order Return Rates through Optimized Payment Solutions: A Case Study on Daraz’s E-commerce Platform in Pakistan

Abstract

This project is based on the challenges that are faced by e-commerce companies in Pakistan because of high order return rates - directly associated with the Cash on Delivery as payment method. Focusing on Daraz a leading e-commerce platform of Pakistan. It faces many challenges managing ‘Cash on Delivery’ (COD) payment method. COD, when introduced, was the main target for getting hold of customer trust in Pakistan for small businesses. But with the increased operations cost, returns, fraud and scam risk it has become hard for companies like Daraz to rely on COD as a major payment method. This report shows how Daraz can cope up with reducing complete reliance on COD and encourages customers to opt for digital transactions. The aim of the study is to examine why people hesitate to adopt digital transactions. By studying the obstacles which includes security measures, data privacy and trust issues in Pakistan. After analysing the data from a survey conducted, customers behaviour and Daraz history, this report finds the issues faced by customers and companies using COD as a payment method. It also suggests how could we encourage people to adopt digital transactions methods such as improved trust through communication and enhanced security protocols to increase transparency and confidence among customers in digital transactions. Moreover, this research suggests the return management must be improved like including unboxing videos and in-person product assessments to stop the fake or scam returns. Hybrid payment is encouraged nowadays globally, because it enables the customers to make purchases in a split amount. We can also name it ‘partial prepayment’. This report also highlights the importance of continuing customers trust and collaboration with fintech companies to ensure financial stability in rural and backward communities. Lastly, the research includes strategies for Daraz, which includes real-time analysis and full-scale implementation of the solutions proposed. By adapting these strategies, Daraz could be able to reduce its reliance upon COD, improve customer satisfaction and increase operational effectiveness. By using digital transactions Daraz will become the most leading platform in Pakistan’s digital market. Daraz’s profitability will grow as it will move towards digital payments.