Nepal e-shopping booms under Covid-19

Infi Store had just begun its operation when the government announced a nationwide lockdown in March to contain the spread of coronavirus. Eight months later, the company with its out-of-the-box marketting strategy for delivery in partnership with Pathao ride service, has boomed.

Infi’s collaboration with Miniso and innovative schemes like home delivery of live mountain goats and chicken for Dasain, were all the  rage with customers who were wary of venturing to markets because of Covid-19.

“We surprised ourselves, our business picked up because of the pandemic fears,” explained Yeshu Thakali of Infi Store. 

While Infi was the right idea at the right time in Nepal’s nascent e-commerce ecosystem, pre-existing establishments like Daraz and Sasto Deal continue to dominate the online shopping market. 

Daraz, which is a subsidiary of China’s Alibaba, this year launched a pandemic iteration of its 11.11 shopping festival timed for Tihar, announcing heavy discounts on products with jacket advertising in all Kathmandu dailies and portals on Wednesday. For the third year in a row, 11.11 has taken urban middle class Nepal by storm.

“For us, 11.11 is the biggest sale day in the world led by Alibaba and every November eleventh is a learning process," Lino Ahlering, Managing Director of Daraz told Nepali Times.

Indeed, Daraz seems to have learnt from mishandling of 11.11 delivery in past years. “2018 was slow, 2019 was fast, 2020 will be much much faster,” Ahlering said. “We are learning from our past mistakes and to rectify them we have added 700 people only for delivery and 200 extra for customer services.” 

Because of early warning and experience about the Covid-19 pandemic from sister companies in China, Singapore and other South Asian markets, Daraz appears to have been better prepared to take advantage of the lockdown and pandemic. 

Another online shopping company that has seen unexpected growth during the past months is Sasto Deal, which recently partnered with India’s Flipkart. When Sasto Deal Started out in 2011, Nepal’s Internet penetration rate was only 9%, it has now grown to 60% and is rising rapidly. 

“The e-commerce potential for Nepal looks more promising than ever, and the Covid-19 crisis with the spread of the Internet has opened up new arenas, including outside Kathmandu Valley,” says Sasto Deal’s co-founder Amun Thapa.

Daraz came after Sasto Deal  and with its aggressive promotion, took the online retail market by storm. After tying up with Alibaba, it has also benefited from the experience of the larger group with global discounting events like 11.11, which has become a household word and many Nepalis now look forward to the festival sale.

Despite the Covid-19 crisis, e-commerce companies have pulled out all stops to gain trust from Nepal’s customers, traditionally wary of shopping online and restricted by micro-credit payment restrictions. Collaboration with international partners, India’s Flipkart for Sasto Deal, and China’s Alibaba for Daraz have helped with technology and promotion skills.

“Nepal’s culture matches with India so much more, and it was a feasible idea to get in products from Flipkart,” explained Thapa. “Competition is always good and it makes the ecosystem healthy and professional, and competing with an Alibaba affiliate was a huge challenge and also a big learning experience.”

Indeed, Flipkart has the experience of competing with the global giant online store Amazon in India. Both Thapa and Ahlering believe that the Nepal online retail market is big enough for both of them, and has the potential for tremendous growth. If it wasn’t, they say, the international partners would not have joined in.

Ahlering of Daraz said that in a developing market like Nepal, there are always challenges to make the whole e-commerce ecosystem much more professional. “Alibaba would have never invested if it did not see a potential here in Nepal. We are very bullish about the market, a lot of people get access to products and that is a win-win situation for the e-commerce market," he added.

Sasto Deal recently also got a $1 million investment from the Dolma Impact Fund to help the company achieve a milestone target of Rs1 billion in annual revenue within the next 18 months.

Watching the two giants of e-commerce is Yeshu Thakali from Infi Store, and he thinks the two were equipped with technical knowhow and experience of online retail to dive right into the market and seize the opportunity offered by the lockdown, just as his delivery startup did. 

However, the Covid-19 crisis has also presented new obstacles for e-commerce, the growth is not matched by government policies and laws which have not caught up with the age of online commerce.

But if the government can get its act together, there is one important lesson from this year’s pandemic crisis and the festival season -- online shopping is here, not just to stay, but also grow dramatically in Nepal in the coming years.