E-commerce also “electronic commerce”, in simple term is the buying and selling of goods or services via internet, and the transfer of money and data to complete the sales. E-commerce has emerged to be profitable business since the rise of internet. Many countries have adapted it and have seen its fortune. Nepal, too is not behind in this sector.
Overview:
Nepal Telecom Authority(N.T.A) reports that mobile phone penetration has reached 130 %, and 62 percent of the population is connected to the internet. The use of smartphones and different mobile apps is growing rapidly. The use of internet in Nepal has grown and is increasing. This truly emerges the chance for e-commerce sites to flourish. Currently, there are thousands of e-commerce sites running in Nepal. Slowly and slowly, many urban masses of youth have also adapted to online shopping over the years. As of August last year, there were already more than 40,000 registered commercial websites in Nepal. The popularity and the significance of the e-commerce sites sky-rocketed during the recent lockdown and tends to grow more and more, without any halt.
Currently in Nepal, the e-commerce market is rumored to be worth around $25 million and the market is growing double and triple fold every year. E-commerce involves multiple channels in the journey of the buying process. If understood and adopted this aspect well, this will not only help in customer acquisitions but will also keep those acquired customers for a longer period of time as loyal customers. The sustainable business strategy can always be successful if only kept even 20% of customers for a repeat purchase while other 80% will go around the virtual portals to check the reviews of products, prices and services. Marketplace platforms should be ready with ample product accessibility and proper logistic channels.
Why E-commerce?
The time demands change, the change to move ahead. And, in this era of information and technology where everything is online, we cannot satisfy ourselves by sitting behind and not being part of change. E-commerce is a change and that change which truly, in developing countries like Nepal, will turnover the country’s economy and most importantly, bring the shift in people’s perception of doing business of buying and selling in the modern era. No doubt about the employment opportunities that it creates. E- commerce is really a gem that provides opportunity to Nepal to be updated with modern technology (delivery drone) and way of living, not only just to few urban people but for the overall benefit and upliftment to every common citizens to address the flow of current of the way of doing business of buying and selling.
E-commerce has the potential to connect Nepali small and medium enterprises, rural women and youth entrepreneurs, traders and exporters with global value chains. Indeed, it gives power to support local products like handicrafts, pickles, garments, carpets, traditional clothes, art crafts of our country to promote globally that have national value and importance. Moreover, business that lack the capital to own a brick and mortar store can easily advertise their product/service via e-commerce, where everything is online.
Opportunities:
There are a handful of websites that offer eCommerce for consumers in the Kathmandu Valley, although most of these are traditional retailers that offer delivery services for their products ordered online. An online food delivery website (www.foodmandu.com) is popular with both expatriates and local residents. Sastodeal and Daraz are emerging online shopping portals (www.sastodeal.com, www.daraz.com). People weren’t comfortable with online shopping in the past. Lockdown and safety protocols, however forced them to try e-commerce.
The global pandemic of COVID-19 created a demand to change the way we do business, especially for small and medium scale business. People were afraid and weren’t comfortable to go outside their house and buy daily products. This created an urge to e-commerce sites to come into action. Covid-19 fueled the process and provided much needed boost. Certain categories such as healthy food, fitness and gadgets which are directly on the rise due to pandemic are more popular. Hamrobazzar, a popular online e-commerce site in Nepal has seen 40% increase in overall traffic since the pandemic. So, in Nepal, e-commerce is growing and has a good future. More and more people are adapting to the change.
Challenges:
Nepal is already behind in localizing e-commerce as a business tool compared to many Asian countries. Still, people don’t trust in online shopping as they cannot bargain. Most Nepali are reluctant to order something they cannot touch, feel or bargain. People of Nepal still prefer to see and feel the goods before buying them. They want to inspect the goods closely, bargain and then buy them. Though some business seem to understand the underlying opportunities in the online segment, their service/product delivery is still at premature stage and that doesn’t seem to satisfy the smart costumers. We clearly lack professional service. Still, there is no proper rules and regulations to control fraud and bad costumer experience. Due to unclear rule of authorities, many e-commerce companies in Nepal are facing difficulties. There is still no ease of operation of delivery of grocery and essential goods.
We still don’t have proper addressing system. People still lack trust and have traditional mindset. We see a lack, a missed opportunity to provide e-commerce more effectively. It seems perception of Nepali people is hard to transform and many are reluctant to go online, where there comes the matter of money for which they value deeply. E-commerce still hasn’t outreach every parts of the country but is operating inside valley only. Rural places are still away from the e-commerce services. People there themselves too are not aware about the services about e-commerce. Besides, many factors such as the conservational business mindset of vendors, the unwillingness to recruit skilled staff to handle online business segment, their own literacy and proper understanding of the whole business model paly role in delayed growth of e-commerce in Nepal. We can’t ignore the fact that there is no proper regulating body as well. This doesn’t provide the right environment for the business to run properly.
What’s Next?
For e-commerce to prosper, the basic requirement is internet so, massive investment is required in enhancing mobile data and making internet data affordable. To make delivery proper and systematic, Nepal needs the proper naming of streets and houses. Government need to focus on building a secure digital payment framework and endorse it to promote public trust. Nepal also needs quality control, data privacy, and protection of customer rights through a legal system. Digital literacy should be provided to marginalized communities. Most importantly, proper rules and regulations should be formed and better environment should be created for e-commerce to function effectively.
Overall, e-commerce is the emerging sector in Nepal which has a great potential to contribute in the country’s economy and employment. If provided right environment and support, e-commerce companies in Nepal too can prosper and add value to the society and to the nation as whole.
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