Kaymu Nepal organised a panel discussion on ‘Solving E-commerce Together’ on July 3. This initiative by Kaymu was to gather all stakeholders of the e-commerce fraternity like payment gateway companies, delivery companies, IT entrepreneurs, and other e-commerce ventures under one roof for a better understanding of the opportunities and challenges of the industry. Despite being a relatively new concept, e-commerce industry has shown immense possibilities in Nepal in the last couple of years.
Highlighting the fact that offline purchasing in Nepal still dominating the market, Rajeev Amatya, MD of Kaymu Nepal said, “The majority of online shoppers are young, who have the will but not the capacity to make huge online purchases.” According to him, the average age of customers buying online is 21 years and the business is mainly Kathmandu centric. The market size of e-commerce in Nepal is USD 75.4 million and is multiplying three times every year. As for the orders, 40 per cent of them are made through mobile alone, as it is easier and faster. According to him the market is fragmented and involves a lot of small players.
“One of the common challenges of service providers is the longer payment cycle where small sellers suffer the most,” stated Amatya. Cash on delivery becomes the other problem with a lot of cases of goods being returned. Likewise, there is no department to take responsibility for damage or theft in the process of delivery. “This is the reason, we are compelled to keep around five per cent of margin to make up for the loss that might occur,” he added.
“Online markets in Nepal are not competing with each other but trying to make a secured place for themselves,” said Manish Shrestha, MD at Aramex Courier. According to him, well developed infrastructure, investment from various players and logistic providers should be there in order to increase the number of buyers and the business on the whole.
“With the increase in the number of the customers and the purchase, the cost of delivery will automatically minimise,” he opined. Bal Krishna Joshi, Co-founder of Thamel.com believes that online business is seasonal in Nepal and is not being able to scale up as it should due to the lack of local supply chain. Likewise, Harsh Sanghai, Director of Triveni Group opined that like the offline business chain, the online business should also build their own network which helps in the growth of sales. Stating that e-payment is still not easy in Nepal, Bijendra Suwal, DGM at Nepal Investment Bank said, “Considering Nepal to be a high risk zone, Nepali cards were not allowed to be used in e-commerce in other countries until a couple of years ago.”
According to him, very few banks in Nepal have a proper system of online payment. Less than five per cent of Nepali buyers as of today use online payments. “A lot of work has been going on to connect all the banks so that interbank transfer across the border will be easier,” he informed. According to Amatya, interbank transfer should be made easier and that customers should be encouraged to make online payments. Likewise building up the easy ways to return the goods could help both buyers and sellers. As far as trust issue is concerned, he believed that it can be solved together by increasing awareness and ensuring quality of products.