When we talk about the future of E-commerce business in Nepal, things have always been unpredictable from the very beginning. We, being a third world country citizens have always been a step backward when it comes to Internet & Technology.
But with the latest technology trends in Nepal, things have been changing over the past few years. Gone are those days when people had to go to Telephone shop to call a local number because very few of us carried mobile at that time. But, People now don’t make a call at all (Just kidding). In Fact, Many of youths these days prefer chatting on the internet these days, which is, of course, cheaper & convenient than traditional phone calls & messages.
When it comes to E-commerce business in Nepal, It’s not a new thing in Nepal. In fact, Online business in Nepal has been running for more than 7 years. There are more than 20 e-commerce portals in Nepal till date.
However, If you see data, None of them have been quite successful when it comes to ROI.
There are 4 main reasons behind this:
- Lack of proper street address (Delivery problem)
- Lack of awareness among people
- Lack of targeted marketing
- Not so good internet connection in the country
But things have changed in fast few years. With widely mobile phones available, good internet broadband and Telecommunications’ cheap Internet rate, people are widely using the internet these days in Nepal.
The Internet penetration in Nepal has crossed 50% in the last year, which literally means that More than half of the population of the country surf internet.
As far as E-commerce business is concerned, it needs two main things to operate:
– Device (Computer, Mobile, Tablet, etc) &
– Internet (To surf the web or app).
So As the above figure suggests, Nepalese people have now got both Internet & device widely. It is, therefore, a strong E-commerce business market and clever Investors and Businessmen knew this at the right time.
This is the result that two top online shopping portals have been acquired recently this year in 2018.
Alibaba Acquired Daraz
Daraz, which was a child company of Rocket Internet was acquired by Alibaba recently this year in May. Founded in 2012, Daraz operated its E-commerce business chain in south Asian countries like Pakistan, Sri Lanka, Nepal, Bangladesh & Myanmar.
However, it was operated in Nepal in January 2013 as Kaymu. Later, it rebranded as Daraz and sold various products under different categories online with free/paid delivery.
One of largest financial technology company of Nepal, F1Soft acquired BhatbhateniOnline in June 2018. BhatbhateniOnline has been operating its online business for past 6 years and managed to earn a decent trust & credibility in the Nepali market.
F1Soft, which is a tech giant in Nepal has stepped into E-commerce business in Nepal with this acquisition. They have rebranded BhatbhateniOnline as eSewapasal. However, Both the portals have different websites for now. It would be interesting to see if they combine them into one or just operate them separately..
Future Consequences Of E-commerce Business in Nepal
The E-commerce business in Nepal is definitely going to take its height after these two big acquisitions. Since these businesses are backed up by wealthy firms, they will not even think twice before investing large bucks for a good ROI, not to talk about Alibaba group.
We should not forget that there are already some existing E-commerce business in Nepal like Sastodeal, Foodmandu, Muncha, Nepbay, Foodmario & many more which are already well established and doing good in their niche.
It is therefore not going to be an easy game for anyone. And of course, small business owners will get a good platform for an additional sale.
Advantage to Customers
Market competition always yields some attractive deals and offers for customers like you & me.
With the increase in competition creates a safe, secure & transparent business environment
This will also increase in product quality and competitive pricing. As people have more choices, they tend to shop more and that ultimately brings in a favorable market condition.
This will be an added advantage of customers after a competitive eCommerce business environment in the country. While eSewanepal has already announced free 24 hrs delivery as soon as it launched, many of them are still in the process.
If you want to sustain in the industry, you can’t ignore your competitor. It is, therefore, going to be a tough game for e-commerce vendors in the coming years. When it comes to fast delivery, The lack of proper street address can be a headache though.
With all those advancements in the digital wallet in Nepal these days, the online payment system is likely to take a rise sooner or later. While people usually rely on cash on delivery (COD), things are certain to change in near future.
More Employment Opportunity
In long run, E-commerce business in Nepal has potential to create a lot of employment opportunity to Nepalese people in the near future.
Whether it comes to corporate people or middle and unskilled manpower, E-commerce needs them all. With increased competition in the market, it is probably going to create an impact on local people both in terms of customer experience and employment. It is going to be a win-win situation for the local people.
Challenge to Startups
If you are thinking about a startup in E-commerce industry in Nepal, you have to be ready for more struggles now. I am, in no way, demotivating the business owners & Entrepreneurs. However, you gotta choose your niche wisely and invest in the right marketing channel if you want to get success now.
Gone are those days when people used to earn large bucks just by spamming and drop shipping here and there. As E-commerce industry evolves with time, you need to build a good image & brand for a startup success. This doesn’t mean you have to have a strong financial backup or something. Money comes last when we talk about the digital world. You don’t shop from a website which is backed up by some millionaire or something. All you see is the product quality, price & delivery. And if the shopping experience is good, you visit the same website again. It is as simple as that.
So, For startups & small business owners, it is extremely important to focus on their branding and pursue a “Never give up” attitude.
Message to E-commerce Startups
After these latest acquisitions in the E-commerce market in Nepal, It is first important to take a chill and not to overestimate any brand all the time.
It is now time to upgrade yourself and build a brand because, At the end of the day, it is brand that matters.
Some of the points that Small Business owners & Startups can follow to compete for a large venture:
Focus On Quality & Pricing
Nobody is going to visit your business ever if you fool them with poor product quality. It is therefore always important to maintain a standard quality of the product if you’re based online.
Price is the first thing that people see with the product image. So, it is important to keep a competitive pricing with the market.
It is now time to prioritize digital marketing for your business. You can’t long last if your business is based on Internet and you don’t care of your Digital Presence. So, startups can focus on Digital marketing to grow their eCommerce business online.
Focus On Branding
Branding is now the most important thing than ever before. An average person is likely to see or hear about a brand at least 7 times before they make any purchasing decision. You can imagine how important Branding has been over the years. It is, therefore, recommended to work on your business branding from now for a long run.
Customer Relation Management
Your business can be ruined by negative reviews and you should not take them lightly. We live in an online world and everything happens within a blink of the eye. So, it is important to keep an eye on your customers. From good product and price you can make your customer happy but with a good Customer relation, you can make them satisfied and turn them into a loyal customer which is an asset to any organization.
E-commerce Business in Nepal has been taking a right turn in the recent past and one can imagine the future with these acquisitions. At one hand while Alibaba is trying to expand its reach in South Asia while F1Soft has already built a brand with software in Nepali market and definitely going to try to surprise with its E-commerce service.
Since Nepal is a good battleground for E-commerce vendors, one can go to any limit to earn customer trust and loyalty. This will not only create a good business environment but also be helpful for future startups & Entrepreneurs.
So, These were all about the latest acquisitions and the possible consequences in the E-commerce business in Nepal. What do you think about these points? let me know if you want to add anything. I would appreciate your thoughts in the comment below.