Nepal’s major e-commerce players saw an explosive sales growth during the Dashain festival as consumers splurged online instead of risking infection by wading through crowded shopping streets.

While the two immediate neighbours—India and China—have taken a great leap forward on the e-commerce front, Nepal is still taking baby steps as the business is yet to win full public confidence.

But this year has been exceptional, say e-retailers, as the virus lockdown, which lasted from March to July, forced people to stay indoors and do their shopping on the internet.

When Dashain came in October, Nepalis, who were just getting used to buying online, spent with a vengeance and sent e-commerce to dizzying heights.

The digital platform landscape altered, providing an unexpected boost for niche e-commerce platforms that consumers may never have visited otherwise. The Dashain festival, when Nepal’s biggest spending happens, was a boon to e-commerce platforms.

There is no exact sales data, but e-retailers estimate that online transactions may have crossed the Rs1 billion mark during the two-week-long Dashain festive window.

Against the backdrop of the exciting Dashain sales boom, e-commerce companies are aggressively gearing up for another bonanza during Tihar which begins from November 13.

Amun Thapa, CEO and founder of Sastodeal, posted on Facebook that the company made record-breaking sales under the five-day ‘Big Deal@Sastodeal’ that started on October 13.

“It used to take us almost an entire year to get sales to reach the figure that we achieved in the last few hours,” he said in his post on October 13.

Amitesh Roy, chief commercial officer at Sastodeal, said that Dashain sales recorded a 150 percent year-on-year jump. “During the sales campaign, the company received more than 3,000 orders worth Rs20 million daily,” Roy told the Post.

Daraz’s Dashain Dhamaka, as per the company, remained a full success.

The company said that they recorded sales of over 300,000 products during the campaign, making it the biggest sale event since last year's 11.11. “Our sales doubled this year as compared to the last Dashain,” Lino Ahlering, managing director at Daraz, told the Post.

Daraz, a wholly owned unit of Alibaba which is China’s biggest e-commerce provider, has been promoting November 11 or 11.11 in Nepal too.

The shopping extravaganza is China’s—and the world’s—biggest online shopping event, known as Singles’ Day, which takes place on November 11, with Alibaba and a record number of other Chinese e-commerce companies offering massive discounts over the 24-hour period.

“Many people had already started buying goods through e-commerce platforms as soon the country was hit by the pandemic. The number increased in the festive season,” said Surakchya Adhikari, co-founder and chief operating officer at Thulo.com.

“We received more than 200 orders daily from the first day of Dashain. Our sales volume increased notably this year,” she said.

Nikita Acharya, CEO and co-founder of Urban Girl, said that festive sales jumped by 60 percent compared to past years due to the consumer adaptability of buying goods online.

Despite the circumstances related to Covid-19, Daraz is confident of making 11.11 a full success with more than 6,000 sellers on the platform. 11.11 is and will also remain the biggest online sale day not only in Nepal but worldwide where Alibaba’s Global Shopping Festival breaks records every year, said Ahlering.

“We are expecting to host more than 500,000 users during the day of 11.11,” he added.

To offer something special for shoppers across the country during these uncertain times, Daraz will be bringing huge discounts with up to Rs3,000 off on card payments through the 11 banks that the company is partnered with on top of the regular discounts offered by thousands of sellers on the platform.

Sastodeal plans to bring a customer-centric cultural promotion campaign for Tihar, expecting more aggressive growth than during Dashain reaching more than 200 percent, according to Roy.

E-commerce traders this year observed a spike in online shopping demand from outside the Kathmandu Valley too compared to past years. “We further noticed increased demand from cities outside the Kathmandu Valley,” said Ahlering.

To cater to soaring demand, the e-commerce sector hired more than 2,500 people recently.

Daraz hired more than 900 additional people for fast delivery and best customer service, Ahlering said. “We have been creating considerable employment, not only for deliveries, but also on our customer and seller care side,” he said.

Sastodeal said they also hired 500 extra people. With the increase in the number of orders, e-commerce platforms hired many candidates, for posts ranging from delivery to medium level, to manage online festive sales.

While e-commerce has been growing extremely fast over the last two years in Nepal, Covid-19 has accelerated this development even further, said Ahlering.

It enables customers to shop safely whereas sellers can continue to operate on our platform and keep growing despite low footfall in their shops, he added.

It is customer confidence and the awareness of buying online that has led to driving growth, not only in normal times but during the festive season too, Roy said.

“Customers have gradually started believing that they will not only get genuine products on time and conveniently, but also get value for their money which has boosted demand,” Roy said.

“Online payment got more popular during the festival with almost all transactions being done through digital systems,” Adhikari said.

Digital payment platforms also offered discounts on payments made through them due to which people preferred paying digitally, said Adhikari.

“A much stronger adoption in terms of card payments has been observed as many consumers do not want to handle cash anymore these days,” said Ahlering.

With the increasing use of e-wallets and other means of digital payment, online shopping has become easy to use from a pandemic safety point also.

Beside grocery items, orders for electronic goods, home appliances, kids wear, fitness items including other segment goods increased during Dashain this year, e-retailers said.

In past years, people generally used to prefer buying such items by visiting the market; but this year, the buying trend of such products has shifted to e-commerce platforms, she added.

Roy said that there was a spike in sales of mobile phones, laptops and TV sets under consumer electronic goods this year which used to get minimum orders during past festival seasons.

Consumer trust has increased with regard to buying non-essential items since before the pandemic with e-commerce platforms introducing a return policy, said industry insiders.

“There are doubts still and flaws too, but with no other option, buyers have gradually started experiencing the new shopping platforms which also helped to boost online shopping,” Roy said.

E-commerce platforms are continuing their Dashain discount offers on many goods throughout the festival season, thereby boosting sales.

Dashain spending has been definitely hit this year due to slowed economic activities and layoffs, but online shopping saw rapid growth with people shifting from going shopping physically to purchasing things online.

“The income of people was hit, but as shopping habits have gradually shifted from physical to digital, e-commerce platforms are seeing an encouraging environment,” Acharya said.

Adhikari from Thulo.com said that consumers were spending wisely keeping health concerns on top which has increased online festive sales despite the pandemic hitting incomes.

With customers not visiting shops, vendors have started placing their merchandise on online platforms, increasing product choices, she added.

To support small and medium entrepreneurs, Daraz has invested heavily in seller support packages with programmes like Sahayatri under which the company has waived marketplace fees to help them get back on track.

E-commerce platforms are now preparing for the Tihar festival which is less than two weeks away. Online sales of Bhaitika sets and gift sets including other essential items for festivals are expected to increase as footfall decreases in the major shopping areas in the valley.

“People buy gifts for their brothers and sisters for Bhaitika, and we expect a growth in sales this Tihar season too,” Acharya added.

According to e-commerce traders, the online market in Nepal is worth around $35-40 million with 300 percent growth annually, largely due to growing smartphone users and increasing internet penetration in the country.