In a rapidly evolving digital landscape, the government has taken proactive steps to regulate the burgeoning realm of online business. The cornerstone of this endeavour is the e-commerce bill, a legislative milestone aimed at bringing online commerce under the purview of legal recognition and taxation. Minister for Industry, Commerce and Supplies, Ramesh Rijal, presented the bill in the National Assembly on June 27, 2023. The e-commerce bill marks a significant shift in the way business conducted through electronic means is defined and governed in Nepal. It seeks to encompass all commercial transactions of goods or services facilitated through information technology, collectively referred to as electronic commerce or e-commerce.
This comprehensive legislation covers a diverse spectrum of online activities including advertising, movies, television, music, over-the-top (OTT) services, data collection, cloud services, gaming, mobile apps, online markets, software supply, data services, image download services, education, consulting, skill development and training services, e-books, e-libraries, e-magazines and more. One of the key provisions of the e-commerce bill mandates that any individual, firm, company or organisation engaged in online business must obtain prior permission from the relevant government agency.
Further, online business operators are required to establish an electronic platform which could take the form of websites, app, Facebook page, YouTube channel, or similar digital mediums. This platform is to serve as the digital storefront containing essential details such as the business name, address, registration information, head office location, as well as branch and outlet information for businesses with multiple locations. The bill outlines a meticulous process for listing businesses in the e-commerce domain. After establishing the electronic platform, businesses must submit an application to the Department of Commerce, Supply and Consumer Protection for listing, which includes obtaining a unique listing number. This step serves as the gateway to conducting online business activities legally.
However, the e-commerce bill is not without its share of challenges. One notable concern is the lack of clear definitions for various terms, such as ‘online business operator’ and ‘e-commerce’. This ambiguity can lead to confusion and differing interpretations, making it challenging for businesses to fully comprehend their obligations under the law. It is also one of the reasons some sellers hesitate to register their businesses.
Customers, too, may fear that access to a wide range of imported goods and brands could be restricted if vendors decide to cease operations due to regulatory complexities. Despite these challenges, the e-commerce bill represents a significant milestone in Nepal’s journey toward establishing a regulated and transparent online business environment.
The government’s steps to govern this dynamic sector is envisioned to pave the way for sustainable growth, consumer protection and greater accountability in e-commerce. As Nepal’s online population continues to grow, the e-commerce bill may be seen as a step towards fostering a secure and thriving online business ecosystem. With the right balance of regulation and innovation, the interests of both businesses and consumers can be safeguarded. This legislation acknowledges the transformative power of online commerce and is seen as a commitment to adapt to the changing economic landscape in the digital era.
It is essential to note that Nepal’s digital landscape has seen an exponential rise in social media usage. Platforms like Facebook lead the way with a staggering 9,857,000 users, encompassing 32.6% of the country’s entire population. Instagram boasts 1,300,800 users, Twitter counts 2,300,000, YouTube claims 3,800,000 users, and Pinterest and LinkedIn are also carving their presence in the digital space. This rapid expansion of social media has prompted digital marketing agencies to focus their efforts on these platforms, capitalising on their massive user bases to promote businesses. The ability to harness the power of social media for marketing purposes has become an invaluable asset.
Leveraging these platforms allows businesses to tap into vast audiences, giving them a significant advantage in reaching potential customers. While the e-commerce bill represents a significant milestone, there is need for clarity on whether it will enhance e-commerce or create roadblocks.
In this edition of Business 360 spoke to a few people working in the landscape of e-commerce to get their opinion on the development of e-commerce in Nepal and the recently introduced e-commerce bill.
Aabhushan Kansakar
Founder & CEO
Jeevee Health