Trend of e-commerce in Nepal

It is said that in the case of Nepal, the first online ecommerce site ever to be introduced by a Nepali business is by Muncha House, when Amrit Tuladhar started the Muncha Internet Venture in April 2000.  With digitization taking place at a rate faster than any time before, online portals have become a convenient method for businesses across the globe. While the pace might have been slower in case of Nepal, it has started picking up since the past few years, with the start of various online shopping portals, as well as virtual classrooms and seminars, encompassing varieties of goods and services. This trend has now started picking even more pace, as Nepal’s internet connection and access started increasing, and online businesses was also seen to soar as lockdown was imposed due to the ongoing COVID19 pandemic, limiting the mobility of people, and their exposure outside.

The popularization of e-commerce is ever-increasing at this time, where big corporations and new startups alike are making use of online portals for their businesses. From food industries, beverages, goods, clothing and fashion, cosmetics as well as online classes and seminars, online portals are being increasingly used. While some businesses operate entirely online with all orders and transactions happening online, few other businesses make use of online platforms only to advertise their products or place. Some of the major e-commerce companies in Nepal, such as Daraz, (previously Kaymu) uses Business-to-Consumer models, to connect various stores with customers. launched its operation in Nepal in 2014, and in July 2016 it started operating as Daraz. The company was acquired by Alibaba group in 2018 and since then operates as one of the biggest e-commerce company of Nepal. Similarly, Hamrobazar is another major actor in connecting buyers and sellers in a consumer to consumer model business. Another company, NepBay started its online directory of products and shops for buying and selling of second hand items with cash on delivery system in 2013 but is now an online company.

There are other notable businesses like Foodmandu, Sastodeal etc. that operate in an e-commerce or e-business model in Nepal and has been attracting attention. Similarly, there are various other and ever-emerging e-businesses in Nepal, providing their catered services. Facebook stores are also getting increasingly popular, where people showcase their products on their Facebook pages. Facebook even started the store feature later with increasing use of Facebook for business, and allows promotion features that helps small business attract/engage their customers. Its low startup costs, simple procedure and convenience is making e-commerce an attractive proposition for wantrepreneurs to pursue. Today, there are number of online portals to choose from with increasing participation, and e-commerce has become genuinely a business model that most new startups are considering.

However, some of the challenges still plaguing e-commerce in Nepal revolves around the constraints to taking the services out of city areas, as there are many places that still lacks a proper connection. Also, most of the complaints in e-commerce revolves around quality of the product being delivered as well as timing. There are cases of delivered products not meeting the expectation, or matching to its description, or in some cases being entirely different to what is shown in the online portal. These areas need rectification by the businesses themselves, for the trust in online commerce to grow considerably.

Another key challenge for the sector is to welcome proper participation and engagement of key stakeholder groups such as the government, policymakers, bank and financial institutions, IT professionals, Media, Investors, and entrepreneurs. In the recent times, with the growing interest and participation in the e-commerce sector, has led to these key stakeholders putting up their efforts to contribute to the rise of the sector. For years e-commerce in Nepal lacked proper policies, and to address this issue the government has put in place a national strategy for e-commerce in 2019, which was approved by the Cabinet in June of the same year, and it is now the responsibility of the Ministry of Industry, Commerce and Supplies to draft the guidelines and regulations for e-commerce industry in Nepal. Along with interventions from government to facilitate the reliability of the e-commerce sector in Nepal, the availability of investment in this area also remains a key issue. But with the rise of private equity firms, venture capitalists and interest from the banking sector to provide loans to entrepreneurs without collateral, access to funding is getting relatively comfortable. Similarly, other key actors from the banking and financial industry are now emerging to stand up to the call by initiatives of e-payment and online banking, which is the backbone for transactions in online businesses. Web developers, IT professionals, delivery companies are other key actors that play a crucial role in determining the feasibility of businesses in operating their online platforms effectively. But all in all, the primemost actors are the entrepreneurs and business people taking the initiative to understand e-commerce and venturing into the sector. While they are putting up their sincerest efforts in setting-up and running e-commerce businesses, their other key task would also be to convince the trustworthiness and consistency of the sector to fulfill the growing market of demands.

With these involvements, participation and activities, it can be noted that the sector is increasing its hold in Nepalese market progressively, with online business reaching out to far more people than ever before, and variety of businesses making use of the online platforms. The sector that started out as a catalog for products has now grown to include entire processes of business within its arena, from transaction to reviews to even marketing. As growing population makes use of online platform in one way or another, it is bound to improve its efficiency along with time, and for which entrepreneurs will need to step up their games to match with the progressive, adaptive, and creative avenue that online business is.