Welcome! Thursday - Mar 30, 2017

Building Trust with Chinese Consumers via Cash-on-Delivery


This issue is the 3rd post of our “Online Payment in China Blog-post Series“.
In the last issue, we highlighted third-party payment in China. In this issue we will explain why you need to offer “Cash on Delivery” in China.

Key Takeaways:

Providing “Cash on Delivery” is an effective way to build a trustworthy image among Chinese consumers. Sometimes it can be a determinant factor for Chinese consumers to shop with you instead of other brands especially for new customers and those who are just beginning to learn about shopping online.

Building Trust with Chinese Consumers via Cash-on-Delivery

Chinese online shoppers pay via Cash-on-Delivery

“Cash on Delivery”(COD) is not a commonly adopted payment method among online consumers in Western markets, yet it is a popular payment method in China. Even though the popularity of COD is decreasing, nearly one third of Chinese online consumers chose COD as one of their online shopping payment methods at the end of 2012.  It is a “must-have” payment option provided by most of China’s mainstream B2C e-tailers such as JD, Amazon China and Dangdang.

Similar with third-party online payment, COD is another effective solution which lets online consumers feel more secure and comfortable – making their purchase decision-making easier and faster. Many consumers who are new to online shopping usually have the following concerns:

1. Descriptions online do not accurately reflect the actual products they receive
2. Online payment safety
3. Do not know how to use online banking
4. Do not feel comfortable paying without seeing the actual products or knowing a brand.

In these cases, providing the payment option of COD is an effective way to increase online store credibility for new customers and improve customer experience for those who are not experts in using online payment methods. Therefore, it can be a determinant factor in online consumers purchasing decisions.
Next week’s post will offer examples of best practice for payment processing in China.

 

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