Chirag Taneja’s GoKwik: Taming the “Necessary Devil” of Cash on Delivery in Ecommerce

Chirag Taneja, a former chief revenue officer of Bombay Shaving Company and an engineer by training, understands the complexities of the ecommerce landscape in India. He likens one aspect of online shopping, Cash on Delivery (CoD), to a “necessary devil” that both consumers and retailers grapple with. CoD allows customers to order products online but pay in cash upon delivery, but it comes with challenges, including high rates of failed deliveries and returns. Taneja’s entrepreneurial journey began with the founding of Ketchupp, an online food discovery platform. While Ketchupp gained traction and scaled impressively, Taneja faced the challenge of relying heavily on advertising revenue. This ad-driven business model was not his initial vision, so he decided to sell the company to CarToq in 2018.

Fast forward to November 2022, and Taneja is the co-founder of GoKwik, an ecommerce enablement start-up. Here, he is once again dealing with CoD, but this time, he aims to transform it using technology and data science capabilities. With CoD accounting for 47 percent of orders during the first phase of the online festive sale in 2022, Taneja recognized the need to address the challenges associated with this payment method. GoKwik’s mission is to increase checkout-conversion rates, improve efficiency, and reduce CoD-related fraud. The start-up uses AI and data science to predict consumer intent accurately, making it possible to cover the costs of failed deliveries. By offering to refund the entire reverse logistics cost to merchants if predictions go wrong, GoKwik provides a risk-mitigation solution.

In its early days, GoKwik faced challenges and reported a loss of ₹76 lakh against an operating revenue of ₹35.6 lakh. However, Taneja remained confident that the magic would come at scale. Over time, the startup improved its prediction accuracy from 90 percent for 1 percent of users to 90 percent for 5 percent of users. Operating revenue soared from ₹35.6 lakh to ₹15 crore, but losses also increased to ₹11 crore in FY22. Despite this, Taneja predicts that GoKwik will achieve profitability by FY24, with a projected revenue run rate of ₹70 crore for FY23. GoKwik has garnered support from investors and has raised $55 million in funding. Sequoia India led the Series A round in November 2021, and other backers include Matrix Partners India, RTP Global, and Think Investments. Ashish Agarwal, Managing Director at Sequoia India, is impressed with GoKwik’s ability to tackle a long-standing challenge in ecommerce.

The CoD problem is significant in India, with about 70 percent of all ecommerce orders still using this payment method, leading to high rates of returns. GoKwik’s solution includes a return risk score combined with an insurance offering. It helps brands identify high-risk orders and limit payment options to prepaid for medium-risk customers, reducing CoD-related losses. While GoKwik has enjoyed rapid growth, it faces several challenges, including managing a remote team of over 150 employees across 47 cities. Reducing losses is another hurdle, but Taneja believes the bottom line will improve as the business scales. Looking ahead, GoKwik has ambitions to expand globally, targeting regions with similar customer behavior and CoD-related issues. Taneja believes the opportunity is truly global, and as the venture continues to build and evolve, its potential for a significant impact on the ecommerce landscape remains promising.

For Taneja and his team, the focus is on the big picture and the possibility of achieving remarkable outcomes. While they acknowledge the challenges, they are excited about the journey ahead, believing that they are still at “Day Zero” and have a long way to go in transforming the CoD landscape in ecommerce.