E-commerce Business Challenges in Nepal | Splendourgroup

E-commerce Business Challenges in Nepal

by splendour | February 17, 2020 | blog

E-commerce refers to purchasing and selling of products and services over the internet through a website or social media shopping page. E-commerce has made it simpler to purchase a wide variety of products and get it delivered directly at your doorstep. Searching, comparing, evaluating and buying of products and services has never been simpler. E-commerce is not just a circulation channel, yet additionally, a way for organizations and brands to reach targeted clients. The possibility to organize e-commerce with social media marketing brings about more outstanding customer reach, more focused market segmentation and deeper relationship with customers.

e-commerce in nepal

 

As the entire world is roaming towards the digital era where shopping is possible through the internet, e-commerce in Nepal is also progressing. It is getting accepted by many, particularly inside Kathmandu Valley, where smaller startups are trying to earn their place. The future of e-commerce in Nepal is bright. Your business could miss out on many growth opportunities if you do not transfer your business on the e-commerce platform yet. Even the e-commerce giant Alibaba has made a large investment in Daraj, one of the top e-commerce platforms of Nepal. This itself confirms that the market will get very competitive in the coming days. The present leaders of e-commerce in Nepal are Daraz, SastoDeal, Hamrobazar, and much more small business are following these patterns. However, the challenges in e-commerce can’t be neglected, particularly not in Nepal.

 

Challenges of E-commerce Business in Nepal:

 

Poor Internet Access

 

E-Commerce is a major part of the internet. It includes the process of buying and selling goods and services through the internet. The main hazard of the e-commerce sector is poor internet access in Nepal. According to research, less than 40% of the population has internet access but yet not at high speed. Only people from the main city areas have internet facilities. The population who have internet access still don’t buy from online. In the whole south Asian country, Nepal comes under an expensive country for internet charges and facilities. Internet provider offers very low-speed internet but still, charges are high than other Asian countries. Likewise, 35% of the population only have smartphones in Nepal.  Those who have smartphones and bought from online more than 40% are dissatisfied.

 

 

Traditional Shopping Habit

 

Nepali still shop in a traditional way. They are not brand-centric. They go the bazaar, chat with vendors, bargain to the fullest and get things done. They can not directly order something they can’t touch, feel or bargain. Especially the middle-aged people (35-50 age group) do not choose online shopping. They don’t trust the products they deliver and think the price range is high. Also, adults who have a typical Nepali upbringing also follow a traditional way of shopping. Only some urban cities youngster’s love doing so. It is the main challenge for e-commerce businesses in Nepal.  People of Nepal still prefer to see and feel the goods before buying them. They want to inspect the goods closely, bargain and then buy them. Even though e-commerce is an easy buy solution in western countries, many people in Nepal are not able to see this because of the lack of professional service.

 

e-commerce business

 

 

Lack of trust

 

The significant challenges most e-commerce businesses in Nepal is convincing the people that they can be trusted. There is one thing an online business has failed to achieve in Nepal, it’s the inability to develop trust among the peoples. Due to poor management systems, people strongly believe that they don’t get the actual qualitative product as they see on the internet. Imagine purchasing shoes that look marvelous in the photo however actually dull when delivered, it will absolutely not give a nice sentiment. Also, the working culture of Nepal is really misleading, especially, in the case of time. Nepali people usually are not punctual at times. There is a famous metaphor “Nepali Time” where there is always 15-30 minutes delay than the actual time. These things make hard to accept online shopping. It takes a lot of time to gain trust. 

 

 

 

Lack of an Effective Payment Gateway

 

For a very long time, online shopping in Nepal always meant paying with cash on delivery. Although some online retailers have teamed up with certain banks for online digital installments, it is still not as helpful as one might want. Nepal now has user-friendly digital wallets like eSewa, Khalti, IME Pay and some more. However, most people stills follow cash on delivery for the payment of the products. In perhaps a couple of years we’ll have a reliable and simple method for making a solid online transaction.

online shopping

 

Customer Interaction

 

Customer interaction is a very challenging factor in e-commerce business. In many cases, customers avoid the interaction. Also, it is not easy to get customer reviews and ratings in Nepal. No doubt, some e-commerce websites now offer minimal delivery tracking but still lack the proper tracking system. Customers and delivery persons could benefit from a more interactive delivery tracking system. Like using Google Maps to track the exact location and details of the delivery person and the product. 

 

 

Lack of Proper Address System

 

The fundamental goal of the e-commerce business is to get the products delivered to the doorsteps. With a complex and incomplete address structure in Nepal, this is beyond the area of imagination. What most online business organizations do is make a call during delivery and approval to meet at a specific known spot. Nepal presently can’t seem to tackle this issue. This issue isn’t just a challenge to the e-commerce sector in Nepal, but on the other hand, it’s an issue for numerous different enterprises. 

Lack of Availability of the Product in the Warehouse

 

Most of the e-commerce websites fail to manage the product’s stock. They sell the same products in physical stores as well.  Sometimes it’s hard to manage the product if it is already sold in store. Due to lack of integration, some time products that are out of stock, still show available on the websites. Lack of availability of the products in the warehouse may create trust issues to the online customer. Additionally, there is a confusing return policy in Nepal. Most online businesses don’t accept the return of products. It can be a threat in the long run. 

 

 

Lack of e-commerce Friendly Rules

 

Nepal government hasn’t formulated the guidelines that favor e-commerce business. One of the troubles lies in the payment gateway during an international transaction. An e-commerce business dependent on Nepal can’t open a PayPal account until it has a dollar account abroad. Likewise, the protracted bureaucratic procedure and unstable monetary strategy of Nepal Rastra Bank are significant obstacles. Moreover, many e-commerce websites are not even registered in Nepal. People are uncertain whether they have to do that in any case. The administration has not made a system for this, so it is hard for some to locate the correct way.

 

e-commerce business nepal

 

 

Unhealthy Competition

 

The addition of competitors doesn’t always mean that the quality of products and services is going to increase at a similar proportion. Many startups are also failing because of the fact that the competition is getting fierce.  Numerous businesses can’t discover and set their objectives and with each online business attempting to provide in a wide range of products. It’s a game of price, where the most reduced one can sustain in the market. Due to which product quality can be compromised in order to sell at a low price. 

 

In conclusion,

All things considered, these are our perspectives regarding the challenges in the online shopping scene in Nepal. E-commerce in Nepal has recently begun to develop from its origin and requires a ton of support before it can truly enter the gigantic population using the internet. Careful research and determination will definitely pay off as the country is finally over its transition phase. If you have any remarkable thoughts of your own, make certain to drop them in the comments below.