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TRIBHUVAN UNIVERSITY

SCHOOL OF MANAGEMENT

PROJECT REPORT ON
E-BUSINESS INDUSTRY OF NEPAL

By
Diya Shrestha
Grishma Joshi
Khim Prasad Dhakal
Pujan Shakya
Sushmita Subedi

21 August, 2014

Table of Contents
Acknowledgement3
Executive Summary.......................................................................................................... 1
1.

History of the industry................................................................................................ 2

2.

Introduction of the industry.......................................................................................... 2


2.1 Nature of the industry.............................................................................................. 3
2.2 Number of firms (players).......................................................................................... 4
2.3 Types of product and services...................................................................................... 4
2.4 Required raw materials.............................................................................................. 5
2.5 Market for product/services........................................................................................ 5

3.

Investment in the sector............................................................................................... 6

4.

Trend of the industry:................................................................................................. 7

5.

Employment Generation.............................................................................................. 8

6.

SWOT Analysis........................................................................................................ 9

7. CSR of the industry..................................................................................................... 10


8. Conclusion............................................................................................................... 11
9. Recommendation........................................................................................................ 11
10. Bibliography........................................................................................................... 13

List of figures:
Figure 1: Internet users in Nepal..................................................................................................................7
Figure 2: Facebook users in Nepal..............................................................................................................8
Figure 3: SWOT Analysis9

Acknowledgement
First of all, I would to thank prof. Bhojraj Aryal for giving us an opportunity to prepare this
report. This report was successfully completed with the help and support of many people. We
would like to thank everyone whos been there. Our college, for providing us the platform to
broaden our horizon by getting us involved in such a project, for providing us the essential
formats and procedures in implementing our work, for their always extended help and support
and also for providing us an opportunity to prepare this report on the Ebusiness industry of
Nepal which was really interesting rather challenging topic for us.
Group members, the work wouldnt have been completed without a team effort so we thank
each other for overcoming any obstacle coming in our paths. To our friends and colleagues who
helped us and supported us generously whenever we needed. Lastly, I would like to thank
everyone who directly and indirectly for the completion of our report.

Executive Summary
E-business is the process of conducting a business through the use of internet. In Nepal ebusiness was developed only a decade ago. E-business was started in Nepal by various websites
like muncha.com with the aim of sending gifts to Nepal targeting people living abroad.
Eventually after the boom of various internet service providing industries, the Nepalese people
came in touch with the internet. Internet is easily accessible in only the major cities like
Kathmandu, Pokhara, Chitwan of Nepal. But there has been a rapid growth in internet users in
Nepal since the past 5 years.
The establishment of companies like yomari, thamel.com, harilo.com, cloudfactory has been
very productive for the development of e-business in Nepal. Internet has touched the lives of
people, besides communicating and learning, is the way of doing business. One of the major
requirements for the proper conduction of e-business is the payment gateways. During recent
years, the payment gateways like e-sewa, hello paisa has been evolving in Nepal but conducting
business through internet is still myth in Nepal. The increasing interest of people towards the
social networking sites like facebook has also boomed the e business industry of Nepal. Sellers
just create page and promote their products. In some cases they dont have stocks and a shop;
they are the actual online stores, who deliver your products after you order with them.
Both the development of payment system, legalizing and securing the payments, creating
reliability from the portals is a major issue. With the growing generation every business will have
to adapt and think about their online existence in future depending on the nature of business. It
will not be too long; there will be a boom in the trend of e-business soon in Nepal.

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1. History of the industry


E-business is about doing business online. Nowadays the thought of living without ecommerce
seems complicated and an inconvenience to many. It wasnt until only a few decades ago that the
idea of ecommerce had even appeared. In 1970s e- commerce meant the facilitation of
commercial transactions electronically, using technology such as Electronic Data Interchange
(EDI) and Electronic Funds Transfer (EFT), allowing businesses to send commercial documents
like purchase orders or invoices electronically. In 1980s, the growth and acceptance of credit
cards, Automated teller machines (ATM), Telephone banking, and airline reservation system
affected the industry. In 1990s, the Internet commercialized and users flocked to participate in
the form of dot-coms, or Internet start-ups. Innovative applications ranging from online direct
sales to e-learning experiences started to emerge. In 2000s, many European and American
business companies offered their services through the World Wide Web. Since then, People
began to associate a word e-commerce.
The development of e-business in Nepal started just a decade ago. It was started with the aim of
sending gifts and money online and other websites promoting Send Gifts to Nepal which had
merely a concept of e-business. The target groups were Nepalese residing in USA, UK, Australia
and Europe. There was no enough effect of that business to support the e-business concept in
Nepal. Gradually the business was promoted by other companies who saw there was a marginal
profit that can be earned from it. Along with the rise of IT, and business concept many online
stores were launched but they didnt have the actual process of buying and selling online and
also the payment method.

2. Introduction of the industry

E-business is the application of Information and Communication Technologies (ICT) in support


of all the activities of business. E-business (electronic business) is the conduct of business
processes through the Internet. These electronic business processes include buying and selling of
products, supplies and services; servicing customers; processing payments; managing production

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control, collaborating with business partners; sharing information; running automated employee
services; recruiting; and more. E-business can comprise a range of functions and services,
ranging from the development of intranets and extranets to e-service, the provision of services
and tasks over the Internet by application service providers. Today, as major corporations
continuously rethink their businesses in terms of the Internet, specifically its availability, wide
reach and ever-changing capabilities. They are conducting e-business to buy parts and supplies
from other companies, collaborate on sales promotions, and conduct joint research.
Many companies have started the trend of e-business in Nepal decade ago, but the challenges are
still the same. The actual sales have not been able to start due to lack of knowledge, awareness
and online payment systems. Selling globally and inside the country is the same as it have been
in previous years. Payment Gateways are being developed but they have their limitation due to
legal and security issues. The lack of proper knowledge and awareness among the generation is
the major hurdle in e-business. In past recent years due to education and reach to internet among
the many people in Nepal has brightened the future of e-business. The interest of students in the
field of IT, the growth of IT companies has helped a lot in the awareness and interest in young
generation for internet and IT, has directly created more opportunities for the growth of ebusiness in Nepal.

2.1 Nature of the industry


E-commerce is the buying and selling of products and services by businesses and consumers
over the internet and through other electronic media. E-business is when a company e-enables its
processes to do business in a more efficient way using Web technologies. This might include
procuring goods and services, dealing with customers as well as selling products. The number of
internet users is increasing day by day. This is the result of a competitive Internet service
provider (ISP) market and low Internet access prices. The growth in the number of internet users
has also lead to the growth in E-business in Nepal. There are many organizations which are
doing E-business currently. Ecommerce is still immature in Nepal. Even though the websites like
Thamel.com, muncha.com etc is doing well, they still lack the public exposure. Buying
something from Internet is myth in Nepal. People are still afraid to do it. Majority of e-business
website provides service to only big cities like Kathmandu and Pokhara.
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2.2 Number of firms (players)


E-business industry is growing rapidly in Nepal. Some of the top e-business websites are
muncha.com thamel.com harilo.com bhatbhatenionline.com, beskantipur.com, nepbay.com,
rojeko.com, Foodmandu.com , metrotarkari.com, estornepal.com etc.
There are many software companies in Nepal. Some of the top E-business companies are Verisk
information technology, Deerwalk services, Braindigit IT solution, sprout technology,
websearch professional, yomari etc.

2.3 Types of product and services

1. E banking:
E-banking is defined as the automated delivery of new and traditional banking products and
services directly to customers through electronic, interactive communication channels.
Customers access e-banking services using an intelligent electronic device, such as a personal
computer (PC), automated teller machine (ATM) and mobile phones.
2. Online Shopping:
Online shopping or e-shopping is a form of electronic business which allows consumers to
directly buy goods or services from a seller over the Internet using a web browser. There are
many online shopping stores in Nepal like muncha.com, hamrobazar.com, urban girl ,
foodmandu etc.
3. Outsourcing:
Outsourcing is the contracting out of a business process to a third-party. Outsourcing sometimes
involves transferring employees and assets from one firm to another, but not always. Outsourcing
includes both foreign and domestic contracting, and sometimes includes offshoring or relocating
a business function to another country. For eg: cloudfactory, freelancer.

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4. E-ticketing:
An electronic ticket is a digital ticket. An e-ticket allows your entire travel experience to be easy
and safe because all of your booking and ticket details are held electronically. Electronic
ticketing is the time-saving, ticketless way to travel.
5. Online payment:
An online

payment

system facilitates

the

acceptance

of electronic

payment for online

transactions. Also known as a sample of Electronic Data Interchange (EDI), e-commerce


payment systems have become increasingly popular due to the widespread use of the internetbased shopping and banking.For eg: e-sewa.

2.4 Required raw materials


1.
2.
3.
4.
5.

Internet service providers like broadlink, Ncell, Ntc:


Computer software and hardware
Servers
Information and data
Human resources

2.5 Market for product/services


The vast changes in computer technology and the mass production of very versatile microcomputers have made the use of computers very widespread. The development of e-business has
thus become a very promising and profitable. E-business and current indications are that this
trend will continue in the future. Nepal has well educated and trained manpower who could
undertake the development of e-business to meet the special needs of individual clients. Nepal is
also in a strong position to undertake data entry operations for foreign clients at very competitive
prices. Personnel required for data entry operations are available at a relatively low cost. The
establishment of colleges like softwarica, maya animation center has increased the number of
skilled manpower which contributes in developing the E-business sector.

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Nowadays, there is huge market potential for online shopping. Due to the busy schedule, people
dont have time to frequently visit shops to buy the things they like. Hence, entrepreneurs have
started many online shopping sites for different products of different brands that cater to the
needs of the various individuals. Not only online shopping there is also much potential for others
sectors regarding e-business as almost all banks have started providing e banking services, IT
companies have started producing different software and applications customized to the
consumers need, sites like nepse and sharebazar provide information about our share market for
the investors. Real estates has also started promoting their products through various online sites
like gharjagga.com, 1ropani.com etc.

3. Investment in the sector


The growth in internet users in Nepal is also triggering the growth of e-business. As such more
and more young entrepreneurs, educated in the IT sector are engaged in e-business sector.
Because e-business requires less capital, young entrepreneurs are attracted to start and continue
the e-business. As such, the growth of e-business is a slow but progressive process. Many of the
established e-businesses are foreign based so it shows that foreign investors are interested in the
potential of this sector in Nepal. Nowadays the private sector is the one who are leading with the
establishment of many different sites to make peoples life convenient in this sector but
government is also implementing many new schemes for the enhancement of the E-business
sector.
The road to launching a new e-business web site, all companies budget for obvious costs
1.
2.
3.
4.
5.
6.
7.
8.

Planning
Designing
Registering
Hosting the site
Infrastructures (if you are working in a company including internet, laptops)
Research
Marketing tools
Staffs
Data entry
Social media for client
Graphic designers
Content writers
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Programmer
Researcher
Review team

4. Trend of the industry:

Figure 1: Internet users in Nepal


The number of internet users is increasing day by day. Internet has touched the lives of people,
besides communicating and learning, it is the way of doing business not only nationally but also
internationally. This has largely affected the global marketplace with peoples growing interest in
buying and selling online. At a time when online shopping has taken the world by storm, Nepal
is still struggling to come out of the box. The increase in various e-business portals like
ramailomela, yeskantipur, metrotarkari, muncha, bhatbhateni, etc are enough to justify the
encouraging presence of e-commerce in Nepal.
Moreover, the advent of several payment gateways like eSewa, payWay, payBill, etc in Nepali ebusiness market has further complemented to this growth. With this growing dependency on ebusiness, the cyber world has witnessed the birth of various automated tools required to develop
an e-commerce site. Nevertheless, a problem with such tools has always been their limitation to
provide easy and secure platform.

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facebook users

1890820
1396740
881160

2011

2012

2013

Figure 2: Facebook users in Nepal

The growth of social networking sites like facebook has helped and revolutionized the e-business
industry. Sellers just create page and promote their products through the advertisement posted in
the various social networking sites. In some cases people dont have permanent shops; they are
the actual online store, who delivers your products after you order them. If you are interested you
can order online and pay them at the time of delivery. Here you dont have the actual experience
of buying over the internet, but you can use social media to get your goods home.

5. Employment Generation
E-business is one of such employment generation fields which demands knowledge and skill
more than qualification. Knowledge and skilled manpower can help in uplifting the level of ebusiness. In Nepal, E-business has been developing day by day but increasing number of ebusiness companies has not been successful in generating employment. Job seekers who would
have secured administrative jobs in traditional businesses are not getting jobs in e-business
sector; only jobseekers with expertise knowledge in a particular field like IT and marketing are
able to secure jobs. However some of the big companies like Yomari, Cloudfactory, Deerwalk etc
have been able to generate employment opportunities to many people. They employ various
unskilled people and provide training to them as well. But some of the smaller companies are
only employing fewer staff as e-business can be started by a single staff. E-business has the
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power to create employment opportunities for people in various fields for different people if we
can understand and utilize the resources, data and information available in the market through
and intensive research and development of the e-business sector.

6. SWOT Analysis

SWOT Analysis

SITUATION
ANALYSIS
INTERNAL
ANALYSIS

WEAKNESS

STRENGTH

EXTERNAL
ANALYSIS

OPPORTUNITY

THREATS

STRENGTH:
1.
2.
3.
4.
5.
6.

Facilitates consumers with easy and instant buying


Easy to correlate between marketing and sales level with cheap marketing expenses
New market and increasing trend provides the wider opportunity for the market
Easy and instant adaptability to market changes on a global level
Creativity and skills of the employee and team are the biggest strength
Easy interaction with customers as it is more customers focused

WEAKNESS:
1. Negative customer feedback can spread easily damaging the good name of the product
2. Competition increases because online marketing helps consumers to easily compare
3.
4.
5.
6.

between different products


Requires constant attention as it needs to be updated regularly
Requires broad knowledge of web and its applications
Security and privacy issues
Maintenance cost due to constantly evolving environment

OPPORTUNITIES:
1. First to engage in e commerce can capture the market swiftly
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2.
3.
4.
5.

Constant costumer feedback can be used to identify and exploit new markets
Automatic systems can help consumers to stay well informed
Globalization
Home based opportunities

THREATS:
1.
2.
3.
4.
5.

Lack of knowledge of web technologies can lead to problems


Will be very difficult to compete with established firms
Imitation can be difficult to stop
Improper databases results lack of evidence to validate its value
Technological changes versus manpower

7. CSR of the industry


Corporate social responsibility is the responsibility that a company should fulfill as being a part
of the society. CSR is not a compulsion in any manner but instead it represents the companys
ethic. Some of the e-business companies also conduct CSR activities. Software development
companies like Deerwalk have felt an obligation to make the community and society a better
place. Activities like book donations to colleges and libraries, cash donations to charitable
organizations, establishment of NYAYA Wealth, cleaning the neighborhoods, social campaigns,
providing scholarships to students etc have been conducted by different organizations. A well
known outsourcing company of Nepal i.e. cloudfactory also conducts community service in
every six weeks. They have provided scholarship to the financially deprived students, they have
conducted cleaning program in various historical places. They also have organized New Year
parties in an orphanage.

8. Conclusion
E-business is a growing industry so it wouldnt be surprising to see that there are companies that
exist only inside computer networks. It is E-business that is changing the way products and
services are conceived, manufactured, promoted, priced, distributed and sold. The reason being
that it is much cheaper; it allows vast coverage and helps in serving the customer better.

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At present, in the context of Nepal, it is still an infant industry. Most of the potential customers
of this industry are not yet aware about this industry. Even the urban dwellers dont yet fully
know about the workings of the e-business sector. As such a lot needs to be done for the
promotion of this sector so that many companies can invest significantly in E-business strategies.
The existing online e-business are networking their way into sales opportunities by redesigning
their websites as lead capture machines and leveraging analytics technologies to improve sales
efficiencies and earn profit through them.
Nepal has been investing in E-business sector for a short period of time so there are still many
more types of products and services that we have not been able to focus on such as in tourism,
online hotel and ticket booking, online payment so we still have much to work on. Lastly there is
much we can do for the development of E-business but we cannot ignore the progress we have
made until now.

9. Recommendation

The establishment of association, related to E-business should be done for the proper
accumulation of data.

With the growing generation, every business will have to adapt and think about their
online existence in future depending on the nature of business. So the organizations of
Nepal should also focus on its online existence.

A common understanding should be struck between different organizations in this sector


to run their businesses smoothly because formulation of industry-specific rules and
regulation is very difficult.

People should be made more aware about the advantages of using E-business as one can
buy products and services easily with one click.

The government law working for cyber crime should revolutionary come into action to
wash away the cyber crimes.

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Approach for credit card should be made since the value of Nepalese currency is very

low as compared to international currencies.


Investigation and analysis of risky products should be done to avoid unexpected
consequences.

10. Bibliography

http://www.nepsolweb.com/ecommerce-in-nepal-1/
http://ils.indiana.edu/faculty/hrosenba/www/S643/classes/intro/intro.pdf
http://en.wikipedia.org/wiki/List_of_e-commerce_services_in_Nepal
http://meroconcept.blogspot.com/2013/08/top-10-e-commerce-websitein.html#.U_YY5sWSwpo

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