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Current Situation of Ecommerce in Nepal

The number of Nepalese ecommerce users started increasingly after the first lockdown that was imposed on March 24,2020. As people were sitting at home, a rising number of consumers started shopping online during the second lockdown which started on April, 2021 and lasted for four months.

Though the markets opened after the stay home orders were withdrawn in September, e-retailer were very successful in retaining their customers and their business did not decline.

Ecommerce entrepreneurs said that demand for online service was high during second lockdown compared to last year because people had become more confidence about the service provided by the retailers. Daraz and Sastodeal are the emerging ecommerce not only in Kathmandu valley but also outside in more than five cities.

The growth of ecommerce is supported by multiple factors like the rising adoption of social commerce, faster and timely delivery and rising adoption of digital payment coupled with greater internet penetration.

According to Nepal Rastra Bank, online transactions in mid-October and mid-November 2021 reached to Rs 4.93 trillion in the same time period last year. The number of transactions also expanded reaching Rs 48.66million during the review period up from Rs 34million transactions previously.

 Digital payment entrepreneurs say that digital literacy, digital divide and trust are the major challenges for the industry. “when it comes to trust, it is about behavioural change, as people still believe in cash transactions. But it is a gradual process, and online payments will be growing in the upcoming days”, said Amit Agrawal, director and co-founder of digital wallet service Khalti in an interview this year.

 Banks are seen promoting digital payment as it increases efficiency, reduces transaction cost and promote transparency. The inter-bank fund transfer cost decreases. It also saves expenses of printing paper money. It will also help bring transactions under tax system due to transparency, said the central bank.

Internet penetration had reached 116.91% as of mid-November , 2021, up from 80% during the same time in 2020. Fastmoving consumer goods, personal care and grocery items are the key segments driving ecommerce growth, followed by consumers electronic goods, fashion and accessories and wellness.

Though the year 2021 was a growth year from business point of view, it was quite tough time with challenges that the sector faced in many areas.

In the absence of law governing e-commerce, customers have been complaining of being cheated in terms of getting damaged products, getting a product other than they had ordered, price differentials and lack of return and refund policy of sellers.

Maintaining the supply chain and logistics remained major challenges for e-commerce companies. Supply chains were disrupted globally, creating shortages of goods and a hike in prices which affected the market.

E-commerce entrepreneurs says that logistics is one of the biggest challenges for e-commerce, and a huge budget is needed to manage the logistical infrastructure.

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