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Why Nepal E-Commerce Is the Next Big Thing

 4 min read / 

Being a landlocked nation, Nepal faces many disadvantages, which includes the restricted resources to develop a healthy and thriving e-commerce industry. However, the 2015 earthquake that killed 9000 and injured 22,000, strengthened bilateral relations with China, which was previously non-existent.

China and India

China’s generous aid to assist disaster victims has re-opened diplomatic communication with Nepal. Moreover, China’s decision to include Nepal in its One Belt One Road (OBOR) initiative might well provide the much-needed infrastructure to help propel Nepal onto the e-commerce center stage. The Silk Road initiative will link some remote areas of Nepal with other linked countries, allowing for the fast shipment of products. In e-commerce, this would translate to the speedy fulfilment and delivery of orders to customers’ addresses.

Other than China, India has also been incredibly helpful in ensuring the electricity supply necessary for, uninterrupted Internet. Nepal Telecom, with its newly installed 4G Mobile Internet Connection, provides the much-needed fast Internet connection imperative for internationally-recognised e-commerce.

These combined forces of OBOR, 4G Connection, and uninterrupted supply of electricity are likely to result favourably in turning Nepal from a landlocked nation to a land linked region, which is ready for advanced e-commerce.

Nepal’s Internet and Electricity

Nepal’s prime minister at that time, Prachanda underscored that the China-Nepal relationship was based on more than geography, but also market, history, and the future. The relationship can be taken to the next level in the future when communication works well. This should prove to be true, with new 4G Internet connection implemented by Nepal Telecom in October 2016.

Nepal’s Internet preparedness is also expected to help foster its trade relationship with India, who have traditionally been Nepal’s strongest trade partner. India has also been involved in providing electricity for Nepal. In 2014, two 900 MW projects namely Upper Karnali and Arun-3 were completed. Nepal Electricity Authority (NEA) has requested India to provide more electricity through cross-border transmission lines.

The need for increased power from India has been because hydropower generation in Nepal has plunged by 60% because of droughts.

Nepal’s Cottage Industry and Robust Startup Scene

Nepal is known for its colourful pashmina scarves and other cottage industry products. The startup scene is also robust with online retailers sprouting in Kathmandu valley, mostly selling those cottage products. However, most “e-commerce stores” or “online retailers” don’t accept credit cards via a payment gateway like PayPal or Stripe. Most of them come up with “creative” ways for receiving payments.

Even the most popular payment gateway Esewa is still no way near the seamless convenience and security levels of PayPal and Stripe. Esewa mostly works as an e-wallet, where customers can add money and use it to purchase online or via mobile.

Nirmal Gyanwali, a Nepalese who owns a business in Sydney, Australia, said that the introduction of integrated payment gateways is crucial as it’s the only way to truly utilise and benefit from the new e-commerce world. In Nepal, PayPal users are limited to receiving money and can’t connect with local bank accounts to withdraw or deposit.

While Kaymu shopping portal is considered the most popular e-commerce store in Nepal, it’s actually based in Pakistan and uses cash on delivery as the method of payment for customers in Nepal.

Thus, considering the availability of high-speed Internet, uninterrupted electricity, and the speedy fulfilment and delivery of products, Nepal desperately needs investors in payment gateways that will work seamlessly with online stores and the banking system. Thus, it’s expected that the new Prime Minister Sher Bahadur Deuba, who assumed office on June 7, 2017, will get his ministers to work on this issue, as Nepal’s e-commerce big boost has arrived.

Conclusion

Nepal as a landlocked country is now at an unprecedented crossroad. With the right amount of thrust provided by China, India, advanced technologies, and the rest of the world as retail buyers; Nepal should be able to pull itself up by its bootstraps to emerge as a land-linked country with a robust e-commerce industry.

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