In a world rampantly evolving through integration, communication and engagement, aided by SMART technologies and the internet of things (IoT), Nepal finds itself in a confused state of affairs between two schools of thoughts. One suggesting integration of systems into a comprehensive and 'connected' ecosystem of business, fascinated by the successes in neighbouring China and India. The other suggesting islanded systems of hyperlocal business models, a successful one in modern day Nepal.

The question is: Which is more sustainable? We see small businesses flourishing in the social media. But are we encouraging an unhealthy consumer behaviour for the future to come? If we do not train our masses on systematic transactional processes, will we be able to handle a realistic near future where blockchain and IoT are the norm? Will the future generations feel the notion of time-travel when they return home from a vacation abroad? Hyperlocal business models do have their advantages, but they are short-lived. What it does is provide a fail-proof environment.

Conversely, quality becomes a function of relationship, monetary transactions security- a function of trust and sales.

One cannot guarantee success of such models in scale-ups because: they do not encourage persistent exploration of unidentified consumer need; business processes will not evolve and reach deeper realms of consumer behaviourism; hence, the superficial behaviour of commerce, thus, established hinders the pace of transition into more cognitive behavior-based business operations aided by SMART technologies.

To understand the global status quo, let us peek into what China is doing.

A huge shopping revolution is happening right now there. It is building an integrated ecosystem of commerce guided by the social behaviour of consumers, radically changing the face of e-commerce through social shopping.

Social shopping is a linear process. In Nepal, you see something on social media, say A, search for the vendor on the internet and get to their portal, say B, then you move to C (payment gateway). In China, when friends chat on a platform and one shares a link with a product, others access it and land on a beautiful product page designed to lure consumers.

Then, a shop assistant comes online and asks if there is anything he can do.

The consumer and the assistant chat to help book the product for the consumer.

The product reaches the consumer the very next morning.

Back to the chat room, the friends are still talking.

It is like an amusement park experience. Shopping is evolving into multi-dimensional experiences. In a social media environment they are like your neighbourhood friends.

This kind of ecosystem redefines the relationship between a consumer, a retailer and a brand.

With such ecosystems, businesses today can control what consumers want to buy, how they want to buy and how they want to socialise with elements of the ecosystem. Such an evolution eventually brings about economic upheaval, resulting in the development of a profound society, which we are lagging today.

But what are the roadblocks? Infrastructure is being built but its affordability is an issue. Nepal has the second highest proportion of active social media in south Asia at 30 per cent. Every 1 in 2 Nepalis has access to the internet today (versus every 1 in 3 Indians). And more than 95 per cent of total internet users use 2G or 3G technologies. However, only 15 per cent of e-commerce transactions take place through digital payments.

Only 2.2 per cent of the total population makes online purchases and payments.

This is due to unreasonable service tariffs on internet-based services.

Hyperlocal models are overpowering and hindering integration. With successes seen in small businesses set up with hyperlocal and locally operating models and many failures observed in the e-commerce industry, the public has shown fears to scale up their businesses. With the trends observed in Nepal, businesses have found a way to improve the margin over time. However, we do not see a futuristic thought process in expanding the scope and scale of these businesses.

Despite consumer readiness, electronic commerce has failed to gain consumer confidence at service-levels.

Nepal's e-commerce is still rudimentary with respect to product and service quality. Unable to recognise the importance of vendor-consumer relationship, the firms repel people from doing online shopping.

Government intervention can relax tariffs on internet and internet-based services. Rewarding vertical and horizontal business integration efforts can help establish a connected ecosystem.

Developing socially integrated commerce platforms built around relationships between a vendor and a consumer can do wonders. Value chain integrations and a social commerce setup can drive Nepali e-commerce industry into a desired state of affairs.

Public Private Partnership (PPP) initiatives along with exercises to improve telecommunications capabilities and affordability could be an overall sustainable option.

So, with many e-commerce and social commerce applications coming in the Nepali market, the prospects for commerce looks pretty good, provided a focussed approach in integration is taken. Many new promising apps intend to create a connected business ecosystem of sort, combining elements of social media and e-commerce to have Nepali youth go on a buying spree. Anticipating more aggressive competition in the near future, we hope to see many more of such smart apps to improve service offerings in the Nepali market. With a 40 per cent projected annual growth in e-commerce in the next five years, one cannot simply brush aside the possibility of a sustainable digitally integrated Nepal.