E-commerce going strong despite reopening of street marketsEntrepreneurs say that online sales of household goods have declined some, but demand for non-essential goods is high.
Nepali consumers had e-commerce thrust upon them by the Covid-19 crisis, as they had no choice but to buy things online during the long months of the lockdown.
During those depressing days, internet stores provided a vital service by making home deliveries, and people fell in love with the new style of shopping. The habit stuck.
With the coronavirus on the way out, the street markets are returning to their usual bustle as movement restrictions have been lifted, but online sellers are not dispirited.
E-commerce entrepreneurs say that online sales of household goods have declined some, but demand for non-essential goods is high.
Since March 5, all Covid-19 related restrictions in Kathmandu Valley have been removed following a steep drop in infections. On Wednesday, Nepal recorded 82 new coronavirus cases, down from a high of more than 12,300 on January 20.
With nearly 64 percent of the Nepali people fully vaccinated, the valley’s shops and restaurants are filling up again like during pre-pandemic times. But e-commerce firms say they are not worried about online shopping slowing down.
Ritik Shahi, head of marketing at internet store Sastodeal.com, said they were observing a 20 percent month-on-month growth in demand compared to the pandemic days.
“In fact, online shopping is getting better than during the pandemic,” Shahi said. “People have now become habituated to buying goods online to save time and be free of hassles.”
The number of e-commerce users started picking up after the first lockdown imposed on March 24, 2020. The second lockdown which started on April 29, 2021 too brought more people online.
With the Covid situation dissipating, people are diversifying into different segments besides grocery items—one of the segments showing the highest sales during the pandemic, e-retailers said.
“The business has not declined with the improvement in the virus situation. The country is fully open, even then the number of online shoppers has been on a rising trend,” said Nischal Niroula, co-founder of Doormeet.com.
“We have been receiving 60-70 orders on a daily basis with the same transaction of around Rs100,000 daily. The volume of orders and transactions are, in fact, the same as during the pandemic,” he said.
“But there is one change,” said Niroula. “Sales of once fast selling groceries are down, but buyers are shifting to other segments.”
During the pandemic, orders for edible oil, pulses, rice and legumes were very high. “Now, most of the orders we are receiving are for books, cosmetics, bakery items and home décors,” said Niroula.
E-retailers say that demand for groceries spikes whenever there is a pandemic. For Sastodeal, its grocery items helped in attracting more customers to the platform.
"People entered the grocery segment online due to the pandemic which helped in creating new customers. They have now started buying other goods also," Shahi said.
Sastodeal is seeing a rise in the number of consumers buying electronic goods. But Shahi added that rising prices of everything due to increased transportation charges following a jump in fuel costs had hurt sales in the past few weeks.
“Sales are not as expected in recent times compared to the same period last year,” Shahi said. "The cash crunch in the market is being felt in sales. Inflation has hit consumer buying behaviour, reducing the shopping trend.”
E-commerce entrepreneurs say that demand for online sales were higher during the second lockdown than last year because people had become more confident about the service provided by e-retailers.
The rise in the use of smartphones, increasing internet access and the government's encouraging the use of electronic payments also boosted online shopping.
According to Nepal Rastra Bank, Rs349 million worth of online payments were made using cards to e-commerce platforms during the month-long period from mid-December to mid-January.
According to the Connectivity in the Least Developed Countries Status Report 2021, Nepal’s performance in e-commerce is still very poor despite the country's having taken a giant leap forward in the terms of online access.
A Nepal Telecommunications Authority report shows that internet penetration had reached 119.49 percent of the population as of mid-December last year.
The report said that e-commerce is related to a country’s level of development, partly explaining the poor performance of the least developed countries (LDCs).
The survey revealed that even among countries with higher internet penetration, awareness of e-commerce platforms is low in LDCs like Nepal. One challenge they face in e-commerce development is lack of online shops.
E-commerce is among the few sectors with the potential to add value, helping these countries to diversify their economies and graduate from the LDCs group.
As per the United Nations Conference on Trade and Development (UNCTAD) Business-to-Consumer E-commerce Index 2020, Nepal ranked 113th with 72 percent efficiency which refers to the country's performance in relation to its national resources.
The research finding implies that countries cannot be expected to perform better in e-commerce until their productive capability improves, the report said.