With many e-commerce and social commerce applications coming to the Nepalese market, the outlook for commerce looks pretty good, provided a targeted approach to integration is taken. Many promising new apps intend to create a kind of connected business ecosystem, combining elements of social media and e-commerce to send young Nepalese on a shopping spree.
In a rapidly changing world through integration, communication and engagement, aided by SMART technologies and the Internet of Things (IoT), Nepal finds itself in a confused situation between two schools of thought. One suggesting the integration of systems into a complete and “connected” business ecosystem, fascinated by the successes of neighboring China and India. The other suggesting island systems of hyperlocal business models, a success in today’s Nepal.
The question is: which one is more durable? We see small businesses thrive on social media. But are we encouraging unhealthy drinking behavior for the future to come? If we don’t train our masses on systematic transactional processes, will we be able to handle a realistic near future where blockchain and IoT are the norm? Will future generations feel the notion of time travel when they return home from a vacation abroad? Hyperlocal business models have their advantages, but they are short lived. What it does is provide a fault-proof environment.
Conversely, quality becomes a function of relationships, the security of monetary transactions a function of trust and sales.
The success of such models in scale-up cannot be guaranteed because: they do not encourage the persistent exploration of an unidentified consumer need; business processes will not evolve and reach deeper areas of consumer behavior; therefore, the shallow trading behavior thus established hampers the pace of the transition to more cognitive behavior-based trading operations aided by SMART technologies.
To understand the global status quo, let’s look at what China is doing.
A huge shopping revolution is happening there. It builds an integrated commerce ecosystem driven by the social behavior of consumers, radically changing the face of e-commerce through social shopping.
Social shopping is a linear process. In Nepal you see something on social media, say A, search the provider on the internet and go to their portal, say B, then you go to C (payment gateway). In China, when friends are chatting on a platform and one shares a link to a product, others go to it and land on a beautiful product page designed to attract consumers.
Then a salesperson comes online and asks if there is anything they can do.
The consumer and the assistant discuss to help reserve the product for the consumer.
The product reaches the consumer the next morning.
Back in the chat room, the friends are still chatting.
It’s like an amusement park experience. Shopping is evolving towards multidimensional experiences. In a social media environment, they are like your neighborhood friends.
This type of ecosystem redefines the relationship between a consumer, a retailer and a brand.
With such ecosystems, businesses today can control what consumers want to buy, how they want to buy, and how they want to socialize with the elements of the ecosystem. Such a development ultimately leads to economic upheavals, leading to the development of a deep society, of which we are now lagging behind.
But what are the roadblocks? The infrastructure is being built, but affordability is an issue. Nepal has the second highest proportion of active social media in South Asia with 30 percent. Today, 1 in 2 Nepalese have Internet access (compared to 1 in 3 Indians). And more than 95% of total Internet users use 2G or 3G technologies. However, only 15% of e-commerce transactions are done through digital payments.
Only 2.2% of the total population makes purchases and payments online.
This is due to unreasonable service rates on Internet services.
Hyperlocal models dominate and hinder integration. With the successes seen in small businesses set up with hyperlocal and local operating models and many of the failures seen in the e-commerce industry, the public has shown fears to expand their business. With the trends seen in Nepal, companies have found a way to improve their margins over time. However, we do not see a futuristic thought process in expanding the scope and scale of these companies.
Despite consumer preparedness, e-commerce has failed to gain consumer trust in services.
Nepalese e-commerce is still rudimentary when it comes to the quality of products and services. Unable to recognize the importance of the seller-consumer relationship, companies push people away from shopping online.
Government intervention may ease tariffs on the Internet and Internet-based services. Rewarding vertical and horizontal business integration efforts can help establish a connected ecosystem.
Developing socially integrated commerce platforms built around the relationships between a supplier and a consumer can work wonders. Value chain integrations and a social commerce setup can drive Nepal’s e-commerce industry to a desired state of affairs.
Public-private partnership (PPP) initiatives as well as exercises to improve telecommunications capabilities and accessibility could be a sustainable global option.
So, with many e-commerce and social commerce applications coming to the Nepalese market, the outlook for commerce looks pretty good, provided a targeted approach to integration is taken. Many promising new apps intend to create a kind of connected business ecosystem, combining elements of social media and e-commerce for young Nepalese to embark on a shopping spree. Anticipating more aggressive competition in the near future, we hope to see many more of these smart apps to improve service offerings in the Nepalese market. With an expected 40% annual growth in e-commerce over the next five years, the possibility of a sustainable and digitally integrated Nepal cannot simply be ruled out.