The coronavirus outbreak has added a significant momentum to the growth of the already popular e-commerce business.
--BY NIKEETA GAUTAM
While the retail sector the world over has become one of the biggest victims of the fallout of the ongoing coronavirus (COVID-19) pandemic, e-commerce has emerged as a victor during the current crisis. The fact that the US e-commerce giant Amazon has been registering a bumper earning and its founder and CEO Jeff Bezos, who is the world’s no. 1 billionaire, has seen his personal fortune rising by nearly USD 24 billion since the start of the outbreak of the novel coronavirus early this year clearly indicate how more and more consumers across the globe are getting connected to the digital marketplace as they are unable to leave their homes due to the restrictions in place to curb the spread of the deadly pathogen. In Nepal too, the trend of online shopping of groceries, vegetables and other daily essentials is increasing as consumers now consider it to be a safe way to get their orders while staying indoors.
Anil Shah, CEO of Nabil Bank, views that though the situation is challenging, it is an opportunity for e-commerce to show its worth and efficiency. “Like everyone else, my family and I were also habituated to go to the stores physically to buy daily essentials. So, in the beginning, I was hesitant to order online,” Shah adds “However, the experience of fresh groceries and vegetables was good after we finally started using an online platform for all our groceries.” He says that encouraging online shopping experience is like giving an ATM card to people. “After handing over the ATM, if the banker goes along with the customer to explain about the process to be followed at the ATM booth, the customer will always use the ATM instead of going to the bank,” he says.
While a few platforms like Kirana.com, Metrotarkari, Green Growth, Kathmandu Organics, Daraz, Sasto Deal were already in the field, food delivery sites like Foodmandu and, Foodmario have also pivoted to delivering fresh vegetables, fruits and other groceries online. On the other hand marts like Bhatbhateni, Salesberry and Bigmart have also recently begun home delivery services realising the need of the hour. Many other new players have been trying to enter the e-commerce market, especially on vegetable delivery. Currently, the companies have been delivering daily essentials including rice, pulses, vegetables, fruits, sanitary items, baby food, induction stoves, rice cooker and some other essential items.
According to entrepreneurs, they are facing challenges to meet the demand. Most of the companies say that they receive at least 1,000 orders every day. Big players like Bhatbhateni claim that they have been receiving more than 10,000 orders every day. However, all the companies have been able to meet only around 10 percent of the demand due to lack of vehicle movement. While Daraz has halted delivery of most of its consumers items like electronics, apparels, cosmetics, among others, it has collaborated with Big Mart to deliver groceries and other daily essential items. According to Umanga Khatiwada, senior content writer-marketing at Daraz, the company delivers almost over 800 orders every day. Similarly, Panu D Paudel, Chief Operating Officer, Bhatbhateni Supermarket says, “In Kathmandu, we meet 1,800 to 2,000 orders every day.” The company has been taking orders from Viber, WhatsApp and Instagram.
Green Growth, which supplies seasonal vegetables, fruits and other organic groceries from outside the valley, has seen a surge of more than 30 percent subscriptions after lockdown. The venture delivers food supplies based on a monthly subscription. Saurav Dhakal, co-founder of Green Growth says that they have been facing challenges in terms of supply of the food items due to lack of vehicle mobility as they are yet to get a permit to go outside the valley. Similarly, Manohar Adhikari, co-founder of Foodmandu says that they can meet only 10 percent of the customer demand currently. “We have got a permit for only two vans. So, we aren’t able to take more than 100 orders per day,” says Adhikari.
Likewise, Sasto Deal has been delivering to 400 doors every day. Along with groceries, Sasto Deal has also been taking orders for kitchen wares like induction stoves and rice cooker.
Lack of Digital Payment
Digital payment and online shopping have become necessities in Nepal in light of recent events, especially in Kathmandu. World Health Organization’s recommendation on moving to cashless transactions to prevent the spread of coronavirus has pushed many to use the available digital resources. According to Adhikari from Foodmandu, almost 50 percent of the customers pay through card or digital payment platform. “Before the spread of the virus, most of the people used to prefer cash for the transaction,” says Adhikari.
Similarly, Khatiwada from Daraz says that though they don’t have concrete data, the majority of customers prefer cash on delivery. “Earlier, most of the customers used to prefer cash on delivery,” he adds “Now, very few of them are found using card payment, but the number is very less.” Most of the customers prefer to pay after receiving rather than prepaying for the items.
Netra Prashad Subedi, director general, Food Management and Trade Company Ltd (FMTC), subsidiary of Nepal Food Corporation and National Trading Ltd, under the Ministry of Industry, Commerce and Supplies says that they have been delivering around 27 to 30 orders every day. The company has made it mandatory for customers to pay digitally. Though in the beginning the orders were taken via phone call, immediately after a week, the company developed its app to take online orders.
Lack of Infrastructure for Delivery
Entities like Bhatbhateni, Salesberry, Bigmart and FMTC, which are relatively new in terms of home delivery say that due to the lack of postal codes, it is difficult for a delivery person to reach an exact location. FMTC Director-General Subedi says that their plan is to deploy young IT skilled professionals and also collaborate with new e-commerce enterprises to make the delivery effective. “We have to get proactive in terms of online delivery from now onwards. Shifting towards technology is a necessity nowadays, so we will invest accordingly,” says Subedi. FMTC faced problems in getting requests from customers as the public was unaware of their contact number. Now with the development of the app, the process has been smooth for both the customer and FMTC. Though companies are doing their best to provide good services, experts say that the availability of proper infrastructure would have made the business much more convenient. Most entrepreneurs say that due to lack of proper mechanism and preparedness, the delivery process has been challenging. Getting a permit for vehicles is one major concern for them. Entrepreneurs say that as e-commerce is in a nascent phase, the government has not been able to fully understand the worth of such entities even at this time of crisis.
Need for Long Term Growth
Customers are used to going to a brick and mortar store to get a real shopping experience. Besides this, uncertainty, technical reluctance and data security issues are some of the other reasons which have been causing e-commerce to grow slowly in Nepal. Manohar Bhattarai, ICT and information economy expert opines that the recent growth is good as it has got many people using the digital platform. However, he says that as order fulfilment logistics was not ready, the situation has been challenging for the companies. “The supporting system ecosystem was not ready for digital platforms like e-commerce and Fintech,” says Bhattarai. He says that the crucial elements including consumer protection assurance, penetration of broadband internet, expensive data prices, data security issues and digital literacy needed for the growth of e-commerce is still missing in Nepal.
“Currently, people are using the online platform because they don’t have the environment to go out for purchase. However, in the long term the growth will not be significant if the state does not work on the above-mentioned issues,” says Bhattarai. For example, using an online shopping platform has to be directly linked with using digital payment methods. But in Nepal, most people are hesitant to use digital payment platforms due to little or no know-how of using such services and issues like data security. Also, the absence of a mechanism for consumer protection stops many from using digital platforms.