As the pandemic spreads, e-commerce thrives.


During the second wave of the coronavirus pandemic 2021, the global economy was completely decimated. Industries throughout the entire sector were realigning their strategy and putting up efforts to resurrect their businesses. Even amid this melancholy, the online retail business had a considerable increase in demand during the first and second waves of the epidemic, according to data from the National Retail Federation.



With the world becoming accustomed to virtual meetings, social distancing, and face masks, as well as the widespread immunization campaign against Covid-19, the year 2021 will be remembered as a watershed moment the history of the online marketplace and consumers.

Following the first shutdown, which was implemented on March 24, 2020, the number of Nepali e-commerce consumers began to increase. As individuals were forced to stay at home during the second lockdown, which began on April 29, 2021 and lasted for four months, an increasing number of consumers turned to the internet to do their shopping. The markets opened after the stay-at-home orders were removed September, but e-retailers were successful in keeping their consumers and their business did not suffer as a result of the withdrawal.

According to e-commerce businesses, demand for online services was high during the second lockdown compared to the previous year because customers had gained more confidence the service given by e-retailers over the course of the previous year.

While the country was closed down, “demand for online services reached an all-time high,” according to Lino Ahlering, managing director of Daraz Nepal, a recent interview. “More and more people are beginning to trust e-commerce platforms,” he added.

Multiple causes, such as the increasing acceptance of social commerce, faster and more timely deliveries, and the increasing usage of digital payment, all of which are aided by increased internet access, are contributing to the expansion.

When comparing mid-October and mid-November of this year to the same period last year, digital payments more than doubled, primarily as a result of an increase the number of people who have become accustomed to online payment.

Online transactions reached Rs4.93 trillion between mid-October and mid-November 2021, according to the Nepal Rastra Bank, compared to Rs2 trillion during the same period last year, according to the bank. The number of transactions increased as well, hitting 48.66 million during the review period, an increase over the previous year’s figure of 34 million transactions.

According to digital payment entrepreneurs, the most significant difficulties facing the business are digital literacy, digital divide, and trust. The issue of trust is one of behavioural change, as people still place their trust cash transactions,” says the author. However, it is a steady process, and online payments will continue to increase in the coming years,” said Amit Agrawal, director and co-founder of the digital wallet service Khalti, in an interview earlier this year. “Online payments will continue to rise in the coming years,” he said.

Since the initial lockdown March 2020, electronic payments have gained traction, with online banking, mobile banking, e-wallets, and QR-based payments all rising in favor among users and merchants.

Banks are believed to be supporting digital payment because it boosts efficiency, lowers transaction costs, and encourages transparency, among other benefits. The cost of interbank fund transfers is decreasing. It also saves money by eliminating the need for printing paper. Because of its transparency, the central bank believes it will also assist bringing transactions under the jurisdiction of the tax system.

As of mid-November this year, internet penetration had increased to 116.91 percent, compared to 80 percent at the same time in 2020, according to the World Bank.

e-commerce growth is being driven by segments such as fast moving consumer goods, personal care, and supermarket products. These segments are being followed by consumer electronic goods, fashion and accessories, and wellness.

Businesses such as Daraz and Sastodeal, which operate in the e-commerce sector, will have experienced 100 percent growth in terms of volume and value in the year 2021.

Daraz 11.11 sales campaign made financial transactions worth Rs360 million in the 24 hours it was open this year, thanks to the efforts of 12,000 dealers participating. “This demonstrates that e-commerce is now extremely popular,” Ahlering added.

Nepal’s largest e-commerce companies, such as Daraz and Sastodeal, have noticed an increase in demand from different parts of the nation, indicating that online buying is not limited to the Kathmandu Valley.

“New clients from new cities like as Pokhara, Biratnagar, Butwal, Itahari, Janakpur, and Chitwan, among others, increased demand by 40 percent from 30 percent before the pandemic,” Thapa explained. “Demand climbed by 40 percent from 30 percent before the pandemic.” In addition, “the number of orders quantity has climbed by around 5 percent from approximately 3 percent, which demonstrates an increase in people’s confidence in online purchasing,” he explained.

Daraz that 50 percent of its orders come from customers outside the region.

With the introduction of e-commerce into the market, the pandemic and lockdowns ushered in the trend of direct to consumer marketing, with various brands opening their own websites.

Within weeks of the outbreak’s outbreak’s second wave, e-commerce enterprises such as Doormeet began operating.

In an interview with Business Insider, Nischal Niroula, co-founder of Doormeet, explained that the company began operations during the flu pandemic this year after noticing that clients requested speedier delivery at a lesser cost.

According to Niroula, “we were motivated to enter the industry after noticing poor star ratings from dissatisfied customers on well-known e-commerce platforms.” “We began operations in order to provide cheaper and faster delivery, which were previously unavailable from other e-commerce companies,” he explained.

In Niroula’s estimation, the company delivers goods within 48 hours after receiving an order and charges Rs80 for the service. Within three months of operation, the company has received over 70 orders and has generated a daily revenue of approximately Rs250,000.

Because of the low profit margins in e-commerce and the growing expectation of customers for faster delivery times, it is critical for businesses to have a reliable supply chain.

Despite the fact that the year 2021 was a prosperous one from a commercial standpoint, it was a difficult one due to the numerous obstacles that the sector encountered in a variety of areas.

Despite beginning efforts earlier this year, the government has been unable to pass legislation governing e-commerce transactions. This bill was produced in early January by the Ministry of Industry, Commerce, and Supply and has since been forwarded to the Ministry of Law, Justice, and Parliamentary Affairs for inputs as well as final approval before to being implemented.

Customers have complained of being cheated in the absence of a law governing e-commerce, with complaints ranging from receiving damaged products to receiving a product other than the one they had ordered, to price differentials and the lack of a return and refund policy on the part of sellers, according to consumer advocacy organizations.

According to Thapa, “we anticipate that the bill will take effect in 2022.” “However, there is also uncertainty as a result of the political turmoil that the country is currently experiencing,” he continued.

According to Thapa, “e-commerce enterprises were rendered immobile during the second lockdown as a result of the new government’s failure to recognize the importance of online distribution and its failure to prioritize it.”

“For example, when the government issued the first prohibitory order, which went into effect on April 29, it did not specify what kinds of goods online stores would be allowed to deliver, when they would be allowed to deliver them, or what kind of vehicle or commuter permit their employees would be required to have,” according to industry sources.

A lack of clear regulatory guidelines on e-commerce caused online stores to be perplexed when it came to offering customer support to them. They were only permitted to make deliveries to a very limited number of locations and only at specific times of the day. This made it difficult for both dealers and purchasers to complete their transactions.

Even the police administration halted automobiles that were on their way to deliver packages.

When the government prioritized e-commerce during the first lockdown in 2020, Thapa stated that e-commerce businesses believed they were no longer prioritized during the second lockdown in 2021, when the administration changed.

‘The recently imposed limits on the import of various items in order to save foreign exchange reserves will have a detrimental influence on supply and on what can be sold when there is a lack of supply of goods,’ Thapa speculated. As an import-dependent company with minimal domestic output, a halt in imports is the most serious threat to platforms like ours.

Customers were looking for online businesses to ensure that they could purchase daily essentials on time and in a safe manner during the second wave of the pandemic this year because the number of infections was high during the second wave of the pandemic this year.

Maintaining the supply chain and logistics have remained significant problems for e-commerce businesses. Throughout the world, supply chains were disrupted, resulting in shortages of items and a rise in prices that had an impact on the market.

There is a good likelihood that the new strain of Omicron will make its way into Nepal, given that the virus has already begun spreading in neighboring countries India and China. Entrepreneurs in the e-commerce sector believe they have learned from their previous mistakes and are prepared in the event of a third wave hitting the country.

“Managing the supply chain and logistics are two critical variables for which we are equipped,” says the company. “Companies like ours will have an easier time this year compared to previous years,” Thapa stated.

E-commerce Companies argue that logistics is one of the most difficult difficulties in e-commerce, and that managing logistical infrastructure requires a significant investment of resources.

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