The government has put in place a national strategy for e-Commerce, the critical first step in encouraging industries and enterprises to adopt e-commerce, before a relevant law to govern the sector is drafted.

The strategy that was approved by the Cabinet in June has given the Ministry of Industry, Commerce and Supplies one year to draft the guidelines and regulations for the e-commerce sector.

The online marketplace is growing steadily despite a late start, but there are no laws to regulate them. Nepal lags in e-commerce because of inadequate information and technology infrastructure.

The strategy has provisioned taking legal action against the e-commerce firm if they are found selling substandard products, charging a high price and not delivering the goods on time. It has also provisioned legal action for selling goods by labelling false details.

The government plans to bring online advertisements into a legal network by enacting a new law, according to the strategy. The strategy also has provision for a refund and return for goods purchased online.

Currently, there is no specific law to regulate e-commerce sector, and consumers often get cheated. According to a government official, the strategy — which will act as an initial guideline — will allow the registration, approval and operation of e-commerce businesses.

The new strategy allows websites to be registered as e-commerce businesses under the Company Act.

Rohit Tiwari, the founder of Foodmario, an online platform that connects home cooks to their customers, said there is a dire need of a provision to streamline the registration and operation of e-commerce business in Nepal. “Due to the lack of guidelines, it’s difficult to register an online company in Nepal,” he said.

The new strategy also has a privacy provision to protect consumers. It has also suggested a body to listen to consumer complaints and setting up a consumer court.

Yogendra Gauchan, the director-general of the Department of Commerce, Supply and Consumer Protection Management, said they have been enacting guidelines to regulate the e-commerce market. “A series of discussions will be held with concerned bodies and stakeholders before preparing the guidelines.”

Prajwol Tamrakar, marketing manager at Sastodeal, said that due to the lack of government policy, even established companies are facing problems as customers’ trust and perception towards the e-commerce sector has turned negative due to unhealthy competition. “There is no proper regulation to govern the industry, and it has been a setback for the growth of e-commerce future in Nepal,” he said.

“E-commerce is a tech-based sector. It will be better if the government introduces flexible law and amends it as technology evolves,” he said, adding that the government does not have to wait for a year to introduce the guidelines.

Industry insiders and government officials said that the e-commerce market would grow manifold due to a swelling middle class and a surge in the number of internet users.

According to the latest management information system report of Nepal Telecommunications Authority internet penetration in Nepal had reached 64.46 percent of the total population as of June 2019 following a smartphone boom.

There are no exact statistics of the size of the e-commerce business in Nepal, but market insiders estimate annual turnover to be in the neighbourhood of $25 million.

The government doesn’t have the exact data for online marketplaces. According to a government official, there are a large number of unregistered online shops. Daraz, Sastodeal, eSewaPasal, Metro Tarkari, Bhatbhateni Online, Mero Kirana, Foodmario, Foodmandu and Urban Girl are some of the most popular online stores in the country.