I. Overview
COD (Cash on Delivery) is a common payment method used by Chinese cross-border e-commerce in the Southeast Asian market, especially suitable for regions with low credit card penetration but rapid e-commerce growth. This guide will introduce the full process of COD from China to Southeast Asia in detail.
- Order processing process
- Order reception and confirmation
Platform connection: Receive orders through Southeast Asian e-commerce platforms such as Shopee and Lazada or self-built websites
Order review: Check the integrity of the delivery address and the validity of the contact information
Risk screening: Identify high-risk orders (such as large orders from newly registered users and orders in remote areas)
- Warehousing and packaging
Local warehouse stocking: It is recommended to set up overseas warehouses in major markets such as Malaysia and Thailand
Standardized packaging:
Use waterproof and shockproof materials
Include bilingual instructions in Chinese/local language
Attach return policy and customer service contact information
Meeting order requirements: Clearly mark the order number, consignee information, COD amount
- Logistics selection
Main logistics partners:
J&T Express
Ninja Van
DHL eCommerce
SF Express International
Timeliness requirements: Ensure delivery within 3-7 days to reduce the rejection rate
- Tariff processing process
- Tariff policies of major Southeast Asian countries
Country Tariff threshold Common product tax rate
Malaysia ≤500MYR tax-free Electronics 10-30%
Thailand ≤1500THB tax-free Clothing 20%
Vietnam ≤1,000,000VND tax-free Electronics 15%
Philippines ≤10,000PHP tax-free Household goods 15-30%
Singapore ≤400SGD tax-free Most goods 7%GST - Tariff processing method
Delivery Duty (DDP): The price of the goods includes the tariff, and the customer does not need to pay extra
Delivery Duty (DDU): The customer pays the tariff when receiving the goods (increases the risk of rejection)
Recommendation: Use DDP for small-value goods, and clearly inform customers of the possible tariffs for high-value goods
- Preparation of customs declaration documents
Commercial invoice (marking “Sample” or “Gift” may be inspected)
Packing list
HS code confirmation
Certificate of origin (such as FORM E can enjoy preferential tax rates)
IV. COD settlement process
- Payment recovery process
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Customer signature → Logistics company collects payment → Weekly/monthly settlement cycle → After deducting the service fee, remit the money to the seller’s account - Main cost composition
Logistics cost: first weight + additional weight, about 15-30 yuan/ticket
COD handling fee: usually 2-4% of the amount received
Exchange rate loss: about 1-3%
Rejection return fee: about 50-80% of the original freight
- Settlement cycle and method
Settlement cycle: T+7 to T+30 (J&T usually settles weekly)
Settlement currency: local currency settlement or RMB settlement (poor exchange rate)
Repayment method: cross-border wire transfer or third-party payment platform (such as Lianlian, PingPong)
V. Risk management and optimization
- Measures to reduce rejection rate
Pre-delivery SMS/telephone confirmation (including product value and amount to be paid)
Establish a customer credit scoring system
Provide online payment discounts
Settle minimum order amount in remote areas
- Return processing
Establish a local return processing center
Secondary sale or disassembly processing
Purchase return insurance
- Data analysis
Monitor the acceptance rate of each region/logistics channel
Analyze the characteristics of high rejection customers
Optimize pricing strategy (including some rejection costs)
Six, special requirements of each country
Malaysia:
Requires SIRIM certification (electronic and electrical products)
Muslim products require Halal certification
Thailand:
Food requires FDA certification
High-value goods may require the consignee to provide a copy of the ID card
Indonesia:
Many types of restricted import goods (local warehouses are recommended)
Customs clearance time is long (average 3-5 days)
Seven, practical suggestions
When negotiating with local logistics companies, focus on negotiating COD handling fee rates and settlement cycles
Clearly mark “COD available” and “COD additional handling fee” on the product page
Establish a multilingual customer service team to handle COD inquiries
Confirm capacity guarantees with logistics companies before peak season
Use ERP system to integrate multi-platform COD order management
By optimizing the full process management of COD, the acceptance rate in the Southeast Asian market can usually reach 70-85%, which is much higher than other emerging markets. The key is to balance growth and risk and establish localized operational capabilities.