eCommerce
Cash on Delivery in Southeast Asia: Why 80% of Your Target Market Won't Pay Online
If you sell online and you are not offering cash on delivery in Southeast Asia, you are invisible to a large portion of the market. Not because your product is wrong or your ads are bad. Because your checkout does not accept the way most people in the region prefer to pay.
COD accounts for approximately 31% of all ecommerce transactions across Southeast Asia. In the Philippines, it is closer to 42%. In Indonesia, 38%. In Vietnam, 35%. These are not fringe numbers. In several of the region's largest markets, COD is the single most common way to buy something online.
This article explains why, which countries have the highest COD adoption, what payment methods couriers actually collect at the door, and how you can run COD fulfillment from a China warehouse without needing a local entity, local warehouse, or local bank account.
The numbers vary by source and methodology, but the pattern is consistent across all of them. COD is dominant in the Philippines, Indonesia, and Vietnam, significant in Thailand and Malaysia, and minimal only in Singapore (where credit card penetration is high).
| Country | COD Share of Ecommerce | Key Payment at Door | eCommerce Market Size (2025) |
|---|---|---|---|
| Philippines | ~42% | Cash, GCash | ~$18 billion |
| Indonesia | ~38% | Cash, GoPay, OVO | ~$95 billion |
| Vietnam | ~35% | Cash, MoMo, ZaloPay | ~$28 billion |
| Thailand | ~20-25% | Cash, PromptPay | ~$28 billion |
| Malaysia | ~15-20% | Cash, Touch 'n Go | ~$12 billion |
| Saudi Arabia | ~30% | Cash, STC Pay, mada | ~$20 billion |
| UAE | ~20% | Cash, Apple Pay | ~$10 billion |
The regional trend is moving toward digital payments. COD was 52% of all Southeast Asian ecommerce in 2019. It is now around 31%. Digital wallets like GCash, MoMo, and GoPay are growing fast. But the decline is gradual, not sudden. COD will remain a major payment method in the region for years, especially in tier-2 and tier-3 cities where digital wallet adoption lags behind urban centres.
Two reasons, and neither one is going away quickly.
Across much of Southeast Asia, fewer than 15-20% of adults hold a credit card. In the Philippines, it is around 6%. In Vietnam, under 5%. In Indonesia, roughly 6%. These are not populations that can prepay for an online order with a Visa or Mastercard. Digital wallets are closing the gap, but they require a bank account or cash loading step that still excludes a portion of the population. For many shoppers, handing cash to a courier at the door is the simplest and most familiar transaction they can make.
First-time online shoppers in these markets have heard stories about scams, wrong items, and packages that never arrived. Paying after seeing and inspecting the product removes the risk entirely. The shopper commits nothing until the courier stands in front of them with the box open. For new brands entering these markets, COD is not a compromise. It is a trust bridge that lets customers buy from you for the first time without any financial risk.
Adding COD as a checkout option in markets where it is dominant can increase your conversion rate by 1.5x to 3.5x compared to prepaid-only checkout. The shoppers who would have abandoned your cart because they could not or would not prepay now have a way to buy. That is not a marginal improvement. It changes the unit economics of your ad spend entirely.
COD does not mean cash only. In most Southeast Asian markets, the courier collecting payment at delivery offers multiple options. Which methods are available depends on the country and the courier partner.
| Country | Cash | Mobile Wallet | Card (POS) |
|---|---|---|---|
| Philippines | Yes | GCash | Limited |
| Vietnam | Yes | MoMo, ZaloPay | Limited |
| Thailand | Yes | PromptPay | Yes |
| Indonesia | Yes | GoPay, OVO, DANA | Limited |
| Malaysia | Yes | Touch 'n Go | Yes |
| Saudi Arabia | Yes | STC Pay | mada POS |
Offering mobile wallet payment at delivery (not just cash) reduces refusal rates because the customer does not need to have exact change. It also reduces the courier's cash handling risk and speeds up the settlement process. When setting up COD with a fulfillment partner, confirm which payment methods the local courier accepts in each country.
You do not need a warehouse in Vietnam, a company registration in the Philippines, or a bank account in Thailand. The entire COD fulfillment process can run from a single Shenzhen warehouse using local courier partners in each destination country.
Step 1: Your inventory sits in our Shenzhen warehouse, stored at $0.49 per CBM per day.
Step 2: A customer in the Philippines places an order on your website or ad landing page with COD selected as the payment method.
Step 3: We pick, pack (branded packaging available), and ship the order from Shenzhen to the Philippines via our local courier partner.
Step 4: The courier delivers to the customer's door. The customer inspects the product, pays in cash or via GCash, and the courier marks the delivery as completed.
Step 5: Collected funds are pooled and settled to your designated account on a weekly cycle, net of shipping and COD service fees.
If the customer refuses the package, it returns to origin. We track refusal rates per country, per product SKU, and per campaign so you can see which ads and which products are converting. That data is more valuable than most sellers realise.
RTO (return-to-origin) rates are the biggest operational difference between COD and prepaid orders. With prepaid, the customer has already committed money. Refusal rates are 3-5%. With COD, the customer can change their mind at the door with no consequence. RTO rates in Southeast Asia typically range from 8% to 15%.
In the Philippines and Vietnam, where COD adoption is highest, the failed delivery rate sits near 15% according to McKinsey research on the region. This is not a flaw in the system. It is the cost of accessing a market where 35-42% of shoppers will only buy via COD. The maths still works: if COD doubles your conversion rate but increases your refusal rate by 10 percentage points, you come out ahead on delivered orders.
The key is tracking. We record RTO rates by country, by courier, and by product SKU. If one product has a 25% refusal rate in Vietnam but 8% in Thailand, that tells you something about your ad targeting or product-market fit in Vietnam, not about COD as a payment method. The data turns RTO from a cost into a diagnostic tool.
You do not need to commit to a full-scale COD operation to find out if it works for your product. A small test campaign will tell you what you need to know in 2-4 weeks.
Pick one country. Vietnam and the Philippines are the strongest starting points because COD adoption is highest and the markets are large enough to generate meaningful data from a small ad budget.
Pick one product. Start with your best-performing product from other markets. Something with a clear value proposition, a sale price between $15 and $40, and low enough weight to keep shipping costs manageable.
Ship 50-100 units to our Shenzhen warehouse. Your supplier can deliver them directly. Zero receiving fees.
Run targeted ads. Facebook and TikTok are the dominant social platforms in SE Asia. Point ads to a simple landing page with COD as the checkout option. Budget $500-$1,000 for the test.
Track everything for 2-4 weeks. Delivered orders, refused orders, cost per delivered order, settlement amount, and net margin per unit after all fees. If the unit economics work at 50 orders, they will work at 500.
Vietnam has the fastest-growing ecommerce market in Southeast Asia (25%+ annual growth). The Philippines has the highest COD adoption rate (~42%). Both markets are accessible from a Shenzhen warehouse with 5-10 day delivery. If COD works for your product in either of these markets, it will likely work across the region.
We currently offer COD fulfillment to Malaysia, Thailand, Indonesia, Vietnam, the Philippines, Hong Kong, and Taiwan in Southeast Asia, plus Saudi Arabia and the UAE in the Middle East. See our full COD service page for country coverage, or contact us to discuss a test campaign for your specific product and target market.
COD fulfillment from Shenzhen to 9 countries. Weekly settlement. RTO tracking by country, courier, and product. Start with a 50-unit test campaign.
See COD Service →COD accounts for approximately 31% of all ecommerce transactions across Southeast Asia. The rate varies by country: the Philippines leads at around 42%, Indonesia at 38%, and Vietnam at 35%. These figures have declined from 52% in 2019 as digital wallets grow, but COD remains the preferred payment method for a large portion of the population.
Low credit card penetration is the primary driver. Across much of Southeast Asia, fewer than 15-20% of adults hold a credit card. Consumers are accustomed to paying with cash or mobile wallets at the point of delivery. Trust is the secondary factor: first-time online shoppers prefer to inspect the product before handing over money, especially when buying from unfamiliar brands.
Depending on the country, couriers accept cash, POS card payments, and mobile wallet payments. Key wallets include GCash in the Philippines, MoMo in Vietnam, PromptPay in Thailand, GoPay and OVO in Indonesia, and STC Pay in Saudi Arabia. Offering multiple payment options at delivery reduces refusal rates.
Return-to-origin (RTO) rates for COD orders in Southeast Asia typically range from 8% to 15% depending on the country and product category. The Philippines and Vietnam tend to have higher RTO rates (near 15%) while Malaysia and Thailand are lower. RTO is higher than prepaid orders (3-5%) because customers can refuse at the door without financial consequence.
Your inventory is stored in a Shenzhen warehouse. When a customer orders, the warehouse picks, packs, and ships the product to the destination country. A local courier partner delivers to the customer's door and collects payment (cash or mobile wallet). Collected funds are pooled and settled to your account on a weekly cycle, net of shipping and COD service fees.
Delivery from Shenzhen to Southeast Asian countries typically takes 5-10 days depending on the destination. Vietnam and Malaysia are faster (5-7 days). The Philippines and Indonesia can take 7-10 days due to island logistics. Express options are available for faster delivery at higher cost.
No. You can run COD fulfillment entirely from a China warehouse. The warehouse handles storage, packing, and dispatch. Local courier partners in each destination country handle last-mile delivery and cash collection. You do not need a local entity, local warehouse, or local bank account in the destination country.
Start with a small test campaign: 50-100 units of a proven product, targeted Facebook or TikTok ads to one country (Vietnam or the Philippines are good starting points), and a COD checkout option. Track your RTO rate, cost per delivered order, and settlement cycle over 2-4 weeks. If unit economics work at that scale, increase volume gradually.