In Nepal, the e-commerce scene has seen significant growth, especially in recent years following the pandemic. Social media platforms like TikTok have become channels for retailers and e-commerce sellers to showcase and sell their products, increasing transparency and accessibility for consumers. Additionally, the increase of digital payment gateways like eSewa, Khalti, and Fonepay has enabled seamless online transactions which removes barriers to online shopping. The rise of e-commerce has also led to an increased need for delivering goods. This has caused more logistics companies to appear in the market.
The increase in logistics companies has made online shopping and product delivery better everywhere in the country. In response to the increasing use of e-commerce, the government of Nepal had introduced an e-commerce bill to regulate and tax businesses operating in this sector on june 17 2023.
In this article, we will provide a brief overview of the changes and fluctuations in e-commerce and businesses in Nepal during the past year, 2080.
E-commerce ecosystem in Nepal
Till today’s date, e-commerce has become a very big market in Nepal. In recent years the e-commerce ecosystem has shown significant growth in Nepal due to increase in usage of internet and smartphones among the public. According to the Nepal Rastra Bank (NRB), there were 11.2 million online transactions made in 2023, totaling 30 billion rupees. The rise in e-commerce activities has really boosted platforms like Daraz, Hamrobazar, and Sastodeal. Those platforms have enabled doors to vendors and retailers to sell their product directly from their shop. This has changed the way of purchasing products online and consumer behavior and their preferences. Getting back to last year, there are lots of things that have changed in the e-commerce sector of Nepal.
Here is the insight from 2080 towards the Nepalese e-commerce:
I. Rapid growth of Digital payment in Nepal
In recent years, there’s been a significant rise in digital payments. This is mainly because cashless payments are easy, reliable, and safe. Plus, you don’t have to worry about carrying cash anymore. After covid epidemic, people started to adopt digital platforms more for everything and this also affected the e-commerce market in Nepal. People started to prefer online shopping rather than physical stores , online transactions rather than signing the cheque. Talking about digital payment in Nepal, there was already a giant platform like esewa fonepay and khalti which were providing services for digital payment .
According to payment oversight report published by NRB In the fiscal year 2022/23, digital wallet transactions in Nepal totaled 213,367,144 transactions, equivalent to NPR 219,807 million. Additionally, QR-based payments accounted for 78,029,200 transactions, totaling NPR 245,412 million in Nepalese currency. Other methods of transaction, such as mobile banking, Connect IPS, debit and credit card , were also utilized during this period which also encourage the digital payment in Nepal.
II. Regulatory Changes: The E-commerce Bill:
Recent years ecommerce in Nepal has grown in a steady process and is making its own tracks step by step.Every vendor and retailer was changing the way of selling products by stepping into the ecommerce platform, especially as the TikTok craze had been on the rise, encourage everyone to dive into it. People even started selling products directly from their homes by importing them from China. Later gradually it turned into a fierce form.
The Nepal government released an e-commerce bill on June 17, 2023. This bill aims to ensure that businesses adhere to ethical standards and comply with the country’s business guidelines.
- Introduction of E-commerce Bill:
In response to the growing e-commerce market in Nepal, the government introduced an E-commerce bill to regulate online transactions, with the market growing by 12.4% annually.
- Prohibition of Unregistered Goods:
The bill prohibits the sale of unregistered goods and services on social media platforms like Facebook, TikTok, and Instagram, where approximately 923,027 businesses operate, with 90% being MSMEs.
- Impact on Small Businesses:
Small businesses, which make up 90% of Nepal’s businesses and provide 45% of jobs, could encounter difficulties because of the new bill’s registration requirements and costs ranging from Rs. 1,00,000 to Rs. 5,00,000.
- Consumer Protection Concerns:
Concerns arise regarding the bill’s effectiveness in protecting consumers, as it lacks clear guidelines for trust indicators and online transactions, despite changes to existing laws such as the Consumer Protection Act 2075. Such as the Electronic Transaction Act 2063 and Evidence Act 2031, could remove the need for additional oversight.
- Implementation Challenges and Fairness:
Implementing the bill brings challenges, as it includes fines from Rs 10,000 to Rs. 50,000 for not following the rules, which alsoraises questions about fairness in different provinces and how practical it will be to enforce, especially for businesses earning higher amount and minimum amount with same kind resources because of regions.
III. TikTok’s Influence on Nepali E-commerce: Rise and fall
Tiktok is a short video sharing platform which allows users to make their video and post it online . Primarily it is used as an entertainment platform but later by the increasing audience in tiktok retailers and vendors adopt it as a platform to sell products online with the help of videos.
- Why do people adopt tik tok as a selling platform?
Because it is a video sharing platform it helps vendors and retailers to increase their brand awareness through the video. With good content strategies even small vendors and retailers can deal with a big range audience which can lead to an increase in revenue and brand value. People also find it easy to use tik tok as an e-commerce because of the transparency of product reviews or also direct contact to the vendors which increase the trust and reliability in business. Not only business, many people used to serve health advice, travel advice ,law tech through the tiktok.
- TikTok Ban: Understanding the Impact
Going back to 2023/24 tiktok’s influence in nepali market has massively increased and every retailer and vendors start to sell products using tiktok’s platform. According to the Onlinekhabar there were a about 2.2 million active users of tiktok in Nepal. Which is a big amount of audience for any purpose.During this time ecommerce sales and online transactions were massively increased which increased the sales and profit. Additionally, the e-commerce market is growing by 12.4% every year in Nepal.
Every business was running smoothly at that time. But later on 13 november 2023 Nepal government decided to ban the tiktok in the name of disrupting social harmony and bad effect in social culture after that every business ran into problems due to dependencies in platforms like tiktok.
IV. Adapting Change for the Future
In the phase of rapid change, Every business must adopt the changes to succeed in future. With advancements in technology and changing consumer preferences, companies need to be flexible and show initiative. This means keeping an eye on market trends, investing in innovation, and promoting a culture of adaptability within the organization. By staying proactive and viewing change as a chance for growth, businesses can set themselves up for success in the ever-changing future landscape. so businesses need to learn something from this:
- Build a business as a brand so no need for dependencies on a particular platform.
- Developing own site as a e-commerce platform
- For a small business they still have a choice of platforms like daraz and hamrobazar.
- Ready to face and adopt new changes & government policies.
V. The Role of Logistics Companies
In the growth of e-commerce businesses logistics plays a very crucial role or we can say they can’t survive without each other. During the year of 2080 B.S even e-commerce fluctuated, logistics companies had adapted rapidly to meet the evolving demands of online retailers and customers alike.
NCM has played a pivotal role in ensuring timely deliveries and efficient order fulfillment, contributing significantly to customer satisfaction and operational efficiency. By optimizing delivery networks and enhancing last-mile delivery capabilities, NCM has overcome logistical difficulty, particularly during times of transition. Collaborations between NCM and e-commerce businesses have streamlined operations, facilitating seamless order processing and quick delivery to customers. These strategic partnerships have enabled NCM to meet changing consumer demands effectively. They provide a reliable and efficient logistics solution for businesses across various industries. With a focus on continuous improvement and innovation, Nepal can move continues to set the benchmark for excellence in logistics services. This ensures that businesses can succeed in the dynamic e-commerce landscape. Contact Nepal Can Move for any courier, cargo, logistics and delivery related services in Kathmandu Nepal.
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