Arun Bhandary

Kathmandu

Today, information on anything is just a click away. The challenge hence is not simply to use and disseminate information but to create new business. Thus, innovation evolves from the minds and imagination of people when they are inspired to create value through their products and services.

E-commerce is nothing but such value added act of buying and selling of goods and services through electronic channels, especially by using the Internet. The scope of e-commerce today is such that, 8.6 per cent of the total sales in the world will be electronically processed this year as projected by Forrester Research Inc, and Nepal cannot afford to sit back and watch this opportunity go by. However, development of e-commerce rests on the e-readiness.

E-readiness refers to a country’s ability to take advantage of Internet as an engine of economic growth and human development. It also takes account of how prevalent e-business practices is in each country and assesses the extent to which a country is ready to automate its traditional business practices through the Internet.

According to the Global Reach research, 11.64 per cent of the world’s population

has access to the Internet and this is expected to rise by another 3.52 per cent this year. But not even one per cent of the total population of Nepal is online and most Internet businesses are confined to Kathmandu valley.

Nepal’s Information Communications and Technologies (ICT) status to some

extent stands at the tele density of about

1.5 per cent and 1,00,000 computers, out

of which 45 per cent are used by the business sector.

Almost 1,50,000 people visited CAN Info-Tech 2003 organised by Computer Association of Nepal. Recent government decision to provide license to private entrepreneurs in this sector to increase competitiveness, will help provide wireless connectivity such as WLL or even cellular mobiles to people in remote areas.

Nonetheless, the country’s present

sluggish business environment, bleak

socio-cultural status and poor e-literacy have not contributed much to the e-readiness of the country. This affects Internet business, which depends on the technical skill of the workforce. Notable practices

of e-business has increased by 15 fold in

the last three years at 4,500 plus in Nepal today, of which 70 per cent are registered by commercial houses with the introduction of .np domains.

The new practice of “e-gifting” and “e-remittance” are the latest in e-business.

The Association of Crafts Producers promotes Nepali crafts to the European and American market through the Internet. Such practices of business to consumer e-commerce illustrate growing comfort among consumers.

However, the e-market size is still very limited. International Trade Center (ITC) estimates not more than $10 million in trade as of March 2003 with 15 to 20 per cent e-trade growth expected by 2008.

The banking industry, which is booming every year, is looking forward to implementing e-banking to provide swift services. Despite such interests, the biggest constraint for a full-fledged e-commerce operation is lack of cyber law.

Though it is already in shape based on the Electronics Transaction Acts, the act is yet to be passed by the house of parliament. Nevertheless, the preparation of the act itself is a landmark of its kind and opens the door for wider e-commerce activities to take off officially in the near future.

Whether the act reflects the framework of “Model Law on E-Commerce Adopted by the UN Commission on International Trade Law” will also determine future e-commerce growth, as we want to explore e-market internationally without complications. For e-commerce to contribute to the country’s economy, it must also comply international interests as it involves local and international monetary transactions via net.

The threat of cyber crime is another immediate and imminent concern though quite a few cases in Nepal. The repercussion of this will be noticed while dealing with digital signatures involving cryptography for which we need to carry out homework before we jump into e-commerce.

Finally, e-commerce and e-readiness compliment each other in the development process of a country’s e-economy. Despite Nepal’s e-readiness being 1.73 at the scale of 0-9 according to ITC, the enthusiasm and willingness to use ICT as a tool to explore business as a whole will prove to be a significant step towards modernisation of economic reforms in the country.

The challenge today is how best we optimise the sub-standard, yet promising e-readiness of the country to a prosperous e-commerce market in future.