Nepalis are passionate internet users, yet they are lagging behind in the world of e-commerce.

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Approximately a decade ago, only ten percent of Nepalis had access to the internet. In fact, according to the Nepal Telecommunications Authority, practically the whole population now has access to the network at some point. Although the Himalayan republic has made significant strides in terms of internet access, its performance in e-commerce has remained somewhat underwhelming.

 

 

 

Connectivity in the Least Developed Countries Status Report 2021 indicates that e-commerce is tied to the level of development of a country, which may explain in part why the least developed countries have performed so poorly in recent years (LDCs).

According to the survey, even in nations with higher internet penetration, awareness of e-commerce platforms is poor in least developed countries (LDCs) such as Nepal.

For example, in Nepal, Bangladesh, and Cambodia, less than a third of internet users were aware of e-commerce sites such as Amazon, Alibaba, and eBay, according to a recent survey.

There are also variances between countries, with users in Nepal being significantly less aware of the various e-commerce platforms available than users in the other two countries. In some cases, the availability of such services in different nations may have an impact on this decision.

According to the survey, one of the challenges that LDCs such as Nepal confront in the development of e-commerce is a lack of online businesses.

“Buyers miss out on the convenience of online shopping, merchants miss out on the opportunity to sell their goods on an online marketplace, and lower-skilled people miss out on opportunities to work in delivery services, which can be a route out of poverty,” the report stated.

 

E-commerce is one of the few areas that has the ability to contribute value, assisting these countries in their efforts to diversify their economy and move out of the LDC category.

In LDCs in Asia and Pacific, agriculture and service sectors are the most important sources of employment. However, the research states that these sectors provide limited formal employment prospects and have not developed significant value-added activities.

The article states that Meituan, China’s largest meal delivery company, discovered that 257,000 of their passengers were from low-income families in 2019.

Ninety-eight percent of those surveyed had increased their incomes to the point where they were no longer in poverty.

Nepal is still in the early stages of development. It is trailing behind in terms of capitalizing on the opportunities presented by e-commerce.

“When we grow, of our business partners grow with us. Their products and services are sold by vendors as well as logistics and payment systems, and this eventually assists in the of jobs,” said Lino Ahlering, general of Daraz, an online marketplace launched by Ahlering in 2012 that in five South Asian nations.

By the end of 2022, we want to have helped enable 100,000 jobs related to Daraz, which we set as a goal in 2019.” “Based on the present trajectory, we are optimistic in our ability to meet this goal,” Ahlering added.

 

Daraz stated that the e-commerce sector had a positive impact on the economy since it provided firms with an alternative means of generating revenue during the Covid-19 quota limits. According to the business, small and medium-sized enterprises (SMEs) accounted for 23 percent of 11.11 (November 11) sales in 2020, for example.

As reported by Nepal Rastra Bank, electronic payment transactions increased to Rs753.30 billion in the first two months of the current fiscal year, which ended in mid-September, from Rs374.45 billion in the same period of the previous fiscal year, according to statistics released by the country’s central bank.

However, e-commerce transactions involving “payment cards” decreased to Rs841 million in the first two months of the current fiscal year from Rs1.76 billion in the same period the previous year, according to the data.

The number of transactions made through the wallet system, on the other hand, has increased.

The value of transactions done through digital wallets has more than doubled in the last two months, hitting Rs28.47 billion. In the same time of the previous fiscal year, the figure was Rs14.91 billion.

During the Covid-19 pandemic in 2020, e-commerce exploded in the country, primarily as a result of shopping limitations imposed by the government since people were forced to stay at home.

Amun Thapa, the CEO and creator of Sastodeal, stated that the e-commerce sector has had a significant impact on the economy. “It is directly contributing to the of new jobs and the support of small and medium-sized businesses.”

 

“We work with a large number of vendors,” Thapa explained. Vendors who used to make transactions in the range of Rs100,000 to Rs200,000 per month now have monthly turnovers in the range of Rs500,000-600,000. Additionally, vendors have begun hiring one or two persons to work in their establishments,” says the author.

Sastodeal has more than 5,000 merchants, with small and medium-sized businesses accounting for 60% of vendors.

Initially, the Nepalese government expressed opposition to the introduction of ride-hailing services. However, it has shown to be a significant contributor to the of new jobs. Tootle and Pathao, two popular ride-hailing services, employ an estimated 150,000 bike riders, according to industry estimates.

Kaymu was the name under which Daraz entered the Nepali market in 2014. Earlier this year, Chinese e-commerce behemoth Alibaba acquired the company.

Similar to the global campaign launched by Chinese online retailing behemoth Alibaba, it launched a single-day bumper sales drive in Nepal. The 11.11 sale is the most popular shopping day in the world.

The campaign is becoming increasingly popular. For the one-day sales promotion, Daraz claims to have the widest selection ever, with 1.1 million things to choose from.

There are incredible price reductions, and the company is giving away 11 bicycles, according to the statement.

 

“On top of the 700 normal staff, we have employed around 1,400 individuals just for the month of November,” says the CEO. The first 1,000 will be mobilized for delivery, and the remainder will be assigned to the operation facility,” Alhering explained.

“Sales campaigns like 11.11 attract more new buyers by providing them with appealing bargains that they would never find on other e-commerce platforms or even in traditional offline markets.” So a massive sales drive like this benefits the economy as a whole, rather than just us,” he explained.

Currently, 12,000 vendors are affiliated with Daraz, with small and medium-sized businesses accounting for 50% of vendors.

In addition, Thapa stated that “since it is difficult to obtain a loan from banks, especially for small and medium-sized businesses to advertise their products, e-commerce is the ideal platform because they can sell their items online and excel themselves.” “Small and medium-sized businesses may now be established quickly and easily on the internet,” he said.

Sastodeal directly employs approximately 200 individuals, and the company has also hired temporary staff to assist with sales efforts in the past. During its Dashain sales drive, the company hired 600 temporary employees.

During Dashain, Sastodeal organized a Big Sale event, and according to Thapa, sales of fast moving consumer items fared very well, with a 10-fold increase, followed by furniture, cosmetics, and electronics, among other categories.

Having sold 3 million grocery products at last year’s festival, the company has boosted its inventory by 40 million items in preparation for this year’s event.

 

Chhath will be promoted for the first time on November 10th, according to Thapa, who anticipates a successful launch.

“This year, digital payment option accounted for about 85 percent of payments made throughout the sales campaign, an increase from 40 percent the previous year,” he continued.

During the campaign, banks and financial institutions that offered promotions on digital payments saw an increase in online payments.

Daraz has 17 payment partners, which include banks and e-wallets, among other options.

However, despite the rapid rise of e-commerce, the online marketplace has been unable to acquire the trust of its customers.

According to the Connectivity in the Least Developed Nations Status Report 2021, internationally recognized e-commerce firms can assist in reducing the trust limitation, but only a small number of them have made investments in the least developed countries so far.

In the report’s words, “this limits the number of possibilities for merchants to sell online, as well as employment opportunities in logistics and other e-commerce-related fields.”

 

According to the survey, there are just four global e-commerce companies that have a physical presence in least developed countries (LDCs): Grab, Daraz, Jumia, and Foodpanda.

With 72 percent efficiency, Nepal ranked 113th in the United Nations Conference on Trade and Development’s business-to-consumer (B2C) e-commerce index 2020, according to the United Nations Conference on Trade and Development. The efficiency index measures a country’s performance in relation to its national resources.

According to the findings of the research, countries cannot be expected to enhance their performance in e-commerce unless their productive capability increases, according to the report.

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