This new e-commerce platform has been successful in defying the odds posed by the Covid-19 pandemic.
While many startups are struggling for their existence on the wake of Covid-19 crisis, Gyapu Marketplace, an e-commerce platform, is on the opposite spectrum of the current trend. Launched three days after the lockdown imposed by the government on March 24, the company claims to have earned more than Rs 10.5 million in three months. They have been selling products worth Rs 500,000 to Rs 1 million every day now and employ 35 people at the moment.
The company was founded by two entrepreneurs Gyanendra Khadka and Bigyan Shrestha. Khadka has number of business interest in and outside the country ranging from travel, fintech and e-commerce. Similarly, Shrestha, who is the chairman of Softwarica College, has also business interest in travel sector. A self-funded business, they have already invested more than 10 million in Gyapu Marketplace. The duo plans to not take any public investment for at least three years.
Khadka went to Singapore for his higher studies whereby he also started doing some businesses. Later, he invested in an energy drink company in the United States. While doing business in the US, he observed different opportunities there. So, he started working on different ideas and began funding IT startups.
The concept of Gyapu was designed in 2016. “Initially, I had planned to launch Gyapu from US. But we had just launched another venture XcelTrip at that time. So, we had postponed this venture for the time being,” said Gyanendra. In 2019, they reached an agreement with Nepal Tourism Board to promote tourism in the country via XcelTrip Nepal. Due to this, Khadka had to come to Nepal often. “I thought if I have to come to Nepal, why not start the business that we had planned four years ago,” he expressed. Hence, they started working on establishing the e-commerce platform from August 2019.
As they started Gyapu abruptly as soon as the lockdown started, there was difficulty finding vehicles for delivery. So they used their personal vehicles initially. Later the company got some vehicles, but the rent was too costly. So now, to minimise cost, the company is planning to own vehicles. At present, it has one private and six rented vehicles. Likewise, they also have two motorbikes for delivery of orders. “The company will gradually own its vehicles,” said Gyanendra.
Finding Opportunity in Crisis
Khadka believes everyone can do business in an easy environment, but one must be able to find opportunities in times of crisis. During the lockdown, people could not go outside their house to buy daily essentials. The only source, Khadka says, during such times, was online delivery. “So, we decided to create an opportunity from the risk,” he mentioned.
Khadka and Shrestha were planning to launch the Gyapu Marketplace after some time, but due to the lockdown, they decided to start the company’s operation early. Now it has been 90 days since the company’s inception. As markets were closed, people mostly ordered groceries, vegetables and fruits from the platform. Khadka claims that the company has delivered up to 1,000 kg vegetables in a day.
Realising that people may not have cash in hand during the lockdown; they contacted The Himalayan Bank and brought five ATM POS machine enabling customers to pay directly using their bank cards during delivery of orders. Currently, Gyapu accepts all types of online payment such as E-Sewa, Khalti, IME, Cell Pay and bank cards.
To fulfil the need during the time, the company sold sanitizers only at Rs 10 during the lockdown. “Even though we had faced a loss by selling masks and sanitizers then, we sold them to fulfil our social responsibility and convey the message that they are necessary for all,” said Khadka.
At present, Gyapu has collaborated with 94 vendors such as Sagar Group, Vishal Group and brands like KTM City, Kilometer, Patanjali, Eva, and Mum Needs, among others. It has 6,263 available products including groceries, fruits and vegetables, men and women’s clothes, drink and beverages, electronics, etc. Recently, it partnered with the department store chain Salesberry to deliver grocery items; the e-commerce platform hosts around 1,400 Salesberry products.
After the easing of lockdown, Khadka says that the company’s sales have decreased. While they used to do around 900 to 1000 deliveries in a day, they have around 500 deliveries the restrictions eased. As the market has opened, people have started coming out of their house and buying daily essentials in their nearest shops. “In order to increase our sales, the market needs to be completely open,” he said, adding, “Even though the market is opening, people are not ready to buy non-essential products at the moment.”
Disrupting Nepal’s E-commerce Sector
“We not only want to sell products, but we also want to bring disruption in the e-commerce sector in Nepal,” expressed Khadka. According to him, problems related to logistics, delivery, vendor and payment persist to hinder the growth of e-commerce in the country. While delivering products, the company’s employees have a problem to exact the location customers. “We sometimes need to call more than five times to the customer while delivering a product,” he said.
Similarly, problems of vendors are not addressed. People buy products from the vendors but do not pay on time. “We found this culture of not paying in time even in the field of e-commerce,” mentioned Khadka. According to him, if the customers are satisfied with the products then it is better if the vendors are paid on time. “So, to establish this as a culture, we pay the vendors within three to five days,” he informed.
Normally, other e-commerce platforms deliver products to the customers in two to four days but Gyapu has been delivering products within 24 hours, which it maintained even during the lockdown. “For some products, we have also started delivery within 6 hours after receiving orders,” he shared. Gyapu has been delivering their products free of cost from Thankot to Banepa.
For now, Gyapu has been listing and approaching vendors on its own. In order to maintain quality and to avoid verification and validation problems, the company has not allowed vendors to register themselves at the site on their own. However, after the lockdown, they plan to allow all vendors to do so.
People working at Gyapu carefully analyse and select products for the marketplace and they do not use photos of the products provided by the vendors. The company has set up a studio with four people working as photographers.
Opportunities and Challenges: Scenario in Nepal
Although the market is small in Nepal, Khadka sees a vast opportunity. According to him, the availability of smartphones also shows that Nepalis have good access to the digital sphere. “Along with that, the increasing banking access has also reached to the greater population in Nepal which further builds possibility for the digital market,” he commented.
However, there exists a problem with the payment system. Although the system allows people to purchase products online using their bank cards, there is still a hassle to activate the card before purchasing online. “The way we can pay easily via payment systems like E-Sewa, Khalti, IME Pay, CellPay, etc, should also be made available to users enabling them to use bank cards without verification activation,” he said.
Meanwhile, he also observes problems, particularly in the area of finaning, in creating an environment conducive to startups in the country. “In Nepal”, Khadka said, “The venture capitalist culture is not great, even though startup businesses had started many years ago.” So, being involved in the IT sector, he says aims to uplift the IT startups and avoiding their shut down. Khadka has recently announced that he will invest USD 20,000 in 25 tech startups of Nepal.
Gyapu Marketplace aims to become one of the leading e-commerce platforms of Nepal with plans to reach 120 locations across the country within a year of its inception. The platform is also adding a section ‘Nepali Brand’ to enable Nepalis all over the world to buy and sell products. Moreover, the company has planned to expand business to Vietnam and India next year. “We also want to become the first home-grown e-commerce company to expand internationally,” concludes Khadka.