E-commerce is doing well despite the reopening of street markets
Nepalese consumers have been pushed into e-commerce by the Covid-19 crisis as they had no choice but to buy things online during the long months of lockdown.
During those depressing days, internet stores provided a vital service by making home deliveries, and people fell in love with the new style of shopping. The habit remained.
With the coronavirus subsiding, street markets are back to their usual bustle as restrictions on movement have been lifted, but online sellers are undeterred.
E-commerce entrepreneurs say online sales of household goods have declined, but demand for non-essential goods is high.
Since March 5, all Covid-19 related restrictions in the Kathmandu Valley have been lifted following a sharp drop in infections. On Wednesday, Nepal recorded 82 new cases of coronavirus, up from a high of more than 12,300 on January 20.
With nearly 64% of Nepalese fully immunized, shops and restaurants in the valley are filling up again like in the pre-pandemic era. But e-commerce companies say they aren’t worried about the slowdown in online shopping.
Ritik Shahi, head of marketing at online store Sastodeal.com, said they are seeing a 20% growth in demand month-on-month compared to the days of the pandemic.
“In fact, online shopping is improving compared to the pandemic,” Shahi said. “People have now become accustomed to buying goods online to save time and avoid hassle.”
The number of e-commerce users started to increase after the first lockdown imposed on March 24, 2020. The second lockdown which started on April 29, 2021 also brought more people online.
With the Covid situation dissipating, people are branching out into different segments besides grocery items — one of the segments showing the highest sales during the pandemic, online retailers said.
“The activity has not decreased with the improvement of the virus situation. The country is fully open, even then the number of online shoppers tends to increase,” said Nischal Niroula, co-founder from Doormeet.com.
“We received 60 to 70 orders daily with the same transaction of around Rs 100,000 per day. The volume of orders and transactions is, in fact, the same as during the pandemic,” he said.
“But there is a change,” Niroula said. “Sales of groceries that once sold quickly are down, but shoppers are turning to other segments.”
During the pandemic, orders for edible oil, pulses, rice and pulses were very high. “Now most of the orders we receive are for books, cosmetics, bakery items and home decorations,” Niroula said.
Online retailers say demand for groceries increases whenever there is a pandemic. For Sastodeal, its grocery items have helped attract more customers to the platform.
“People entered the online grocery segment due to the pandemic which helped create new customers. They have now started buying other products as well,” Shahi said.
Sastodeal sees an increase in the number of consumers buying electronic products. But Shahi added that rising prices for everything due to higher transport costs following a spike in fuel costs had hurt sales in recent weeks.
“Sales are not as expected lately compared to the same period last year,” Shahi said. “The shortage of liquidity in the market is being felt in sales. Inflation has hit consumers’ buying behavior, reducing the buying tendency.”
E-commerce entrepreneurs say demand for online sales was higher during the second lockdown than last year as people grew more confident in the service provided by online retailers.
Growing use of smartphones, increased internet access and government encouragement to use electronic payments have also boosted online shopping.
According to Nepal Rastra Bank, online payments worth Rs 349 million were made using cards on e-commerce platforms during the month-long period from mid-December to mid-January.
According to the State of Connectivity in Least Developed Countries Report 2021, Nepal’s performance in e-commerce is still very poor despite the country having made a giant leap forward in terms of online access .
A report by the Nepal Telecommunications Authority shows that internet penetration had reached 119.49% of the population by mid-December last year.
The report indicates that e-commerce is linked to a country’s level of development, which partly explains the poor performance of least developed countries (LDCs).
The survey found that even among countries with higher internet penetration, awareness of e-commerce platforms is low in LDCs like Nepal. One of the challenges they face in developing e-commerce is the lack of online stores.
E-commerce is one of the few sectors with the potential to add value, helping these countries diversify their economies and graduate from the LDC group.
According to the United Nations Conference on Trade and Development (UNCTAD) Business-for-Consumer E–trade index 2020Nepal ranked 113th with an efficiency of 72%, which refers to the country’s performance relative to its national resources.
The research findings imply that countries cannot be expected to perform better in e-commerce until their productive capacity improves, the report says.