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E-commerce in Nepal heats up

Sasto Deal. Daraz Nepal. UG Bazaar. Muncha. Now eSewaPasal. There’s more ecommerce companies in Nepal and I’ve only mentioned the ones that I regularly hear of.

It’s exciting to witness the growth of ecommerce in Nepal in the last 5-7 years. Alibaba Group acquired the entire share capital of Daraz, the Pakistan-based e-commerce company that has been running online marketplace services in a number of South Asian countries including Nepal (May 2018). Dolma Impact Fund, the first international private equity fund dedicated to Nepal made investment in SastoDeal (June 2018). Dolma was impressed with SastoDeal’s 233% growth just in the last quarter.

Although ecommerce is probably not the first option for many consumers in Nepal, it is certainly becoming much popular and a very good alternative shopping option. Why is ecommerce heating up in Nepal or specifically Kathmandu, the capital? Here’s a few reasons I can surmise:

  1. Many Internet Service Providers are offering higher bandwidth at cheaper prices.
  2. Internet penetration and mobile penetration is increasing.
  3. Cash on delivery is still the most used mode of payment so it’s easier for consumers to try the service.
  4. A growing number of consumers are preferring the convenience and choices available in ecommerce sites.
  5. A young and tech savvy population is growing up shopping online.

What’s next for ecommerce in Nepal? What would happen in the next 3-5 years in Nepal’s ecommerce scene?

My assumptions:

  1. Ecommerce will continue to see rapid growth fueled by increased consumer connectivity, easier/better online payment gateways and overall competition.
  2. Retailers will have to offer much better customer service/experience, prices and faster delivery turnaround to match or beat increased online competition.
  3. A replication of Amazon Prime membership model can come into play and the first ecommerce company to leverage this opportunity will win consumers, higher margins and platform loyalty.
  4. More investment will come in domestically/internationally to take the ecommerce platforms outside of Kathmandu and build a nation wide network. Acquisitions are likely as competition increases.
  5. Government will take more interest in ecommerce due to the growing ecommerce market, inflow of investment and as more transactions happen over the web/internet.

What do you think? Looking forward to hearing from you whether you are an online shopper, retailer or someone working at an ecommerce company. Please comment below.