Fetise Ties Up With Gharpay For Cash Before Delivery, But Why?

One year old start-up Fetise Retail Pvt Ltd, which runs the e-commerce site Fetise.com specialising in men's apparel and accessory, has joined hands with Gharpay, a cash payment network company, to introduce 'cash before delivery' (CBD) model.

It is basically an advance payment option as against cash on delivery (COD) where people pay cash while taking delivery of a product. It works like this: if you buy something through Fetise, Gharpay will go to your house to collect the money and give invoice. Then, the order will be processed in the next 7-10 working days.

The point to note is that this CBD model is an alternate payment option and a Fetise customer can well go ahead with the more prevalent modes of paying for online purchases such as card payment or COD. So why CBD?

The idea is to incorporate another payment option for consumers, who hesitate to use a credit card, debit card or net banking facilities.

"This might just be the silver lining for the e-commerce sites to improve their cash flow and working capital that is needed to run the business and keep it afloat," said Siddharth Puri, marketing head, Fetise.

Fetise was co-founded by Chetan Bafna, Abhishek Shah, Somya Tambi and Subir Ghosh, who studied at Gurgaon's ICFAI Business School. Abhishek Shah had earlier founded group buying platform WanaMo.com with Sampad Swain in November 2009, which was acquired by Germany-based Group Buying Global AG and Smile Interactive group in June 2010 and relaunched as Dealsandyou.com. Fetise had last month secured $5 million in funding from Seedfund.

"We're happy to see Fetise's innovation of CBD as a method to get the best of both worlds - to allow those without plastic money to get the benefits of online shopping, as well as to reduce the overall cost to users by reducing the cost of returns or undelivered goods," said Mahesh Murthy, founding partner, SeedFund. Currently, this service is rolled out in 14 cities and will soon be scaled up to pan India within three months time. Puri added, "Tier 2, tier 3 cities will be facilitated the most through this facility who are not quite comfortable to use cards and net banking facilities."

But isn't it already there with COD? Our reading of this initiative is Fetise is trying to expand sales channels to smaller cities where it is not offering COD or finds it difficult to allow COD as a payment mode due to logistics issues (we tried placing an order for a perfume in Delhi and didn't see any CBD option). One would assume, if a person has the option of paying for the product later, he/she would ideally do so rather than pay and wait for the product to be delivered.

Fetise, however, offers free delivery only for 'pre paid' orders. So, another objective of the model could be to allow consumers to buy without paying shipping charges even while not paying online, a facility that would not be available for COD for obvious reasons.

This aside, we noticed Fetise has also gone open. According to the company, it is a 'by invitation only' club that offers its members a wide range of clothing, shoes and accessories from international brands. However, we managed to open an account without any invitation, directly on the site.