The COVID-19 pandemic has brought about numerous changes in the world, and one of the most significant changes is the shift toward online shopping. Nepal is no exception, as more and more people turn to online shopping to avoid exposure to the virus.
As a result, online shopping has become increasingly popular in Nepal. This has opened up new opportunities for corporations and entrepreneurs, who can now serve a wider range of customers while maintaining security. Online shopping has also made it easier for customers to shop from the comfort of their own homes, while still having access to a vast range of products and services.
Making online payments has become much easier for both customers and business owners. With the rise of online shopping in Nepal, various payment options have emerged, making it easier for customers to complete their purchases. Payment options such as credit/debit cards, online wallets, and bank transfers have become widely accepted by online retailers. This has also increased the scope of online shopping in Nepal.
Why Online Shops are popular among buyers and sellers in Nepal?
- Simple Platform: Online marketing brings all retailers under one roof, making it easier for customers to explore the market and secure the products of their choice.
- Paperless Transaction: Since the advent of COVID in 2019, online sales have surged in popularity in Nepal, allowing businesses to serve more clients while maintaining security. Nowadays, both customers and business owners can easily accept payments online. South Asian online retailers include Amazon, Alibaba, Best Buy, eBay, Daaraz, and Gyapu; Indian retailers include Flipkart, Myntra, Ajio, Pepperfry, and Lenskart. Online commerce is rapidly growing.
- Simple Payment: Customers do not need to carry cash, and the transaction is quick and secure.
- Simple Delivery: Once a customer books a product, they do not need to go to the store to pick it up. Their products can be delivered right to their door.
- Saves Time: The delivery service is provided so that customers do not need to visit the stores to pick up their purchases.
- Accessible Marketplace: Online markets have made it possible for vendors to simultaneously display their goods at a global market through digital payment.
Advantages of Online Commerce for Consumers and Sellers
Online commerce offers many advantages for consumers, making it a preferred choice for shopping. Here are some benefits of online commerce for consumers:
- Convenient: Consumers can shop online anytime, day or night, and from anywhere. They can access your company’s website and place orders at their convenience.
- Troubleshooting: Consumers can troubleshoot issues more quickly by reading content about potential issues or by quickly emailing your company.
- Low Startup Costs: Online businesses have incredibly low startup costs compared to traditional brick-and-mortar stores, which means that online retailers can offer lower prices to their customers.
- Improved Customer Service: Online businesses can offer improved customer service through features like online chat support, customer service hotlines, and email support.
- Operating Costs are Lower: Online businesses do not have to pay rent for a physical store or hire as many employees, which significantly reduces their operating costs. This means that online retailers can offer products at lower prices than traditional retailers.
- Vastly Larger Market: With the internet, businesses can access a global market of potential customers, giving them the opportunity to reach more people and increase their sales.
- Enhanced Response: The internet allows businesses to respond to customer queries and concerns more quickly, improving customer satisfaction and loyalty.
- No Income Restrictions: Online businesses have no restrictions or ceilings on income, allowing them to maximize their earning potential.
- Absolute Independence: Online businesses give entrepreneurs the freedom to work from anywhere in the world, giving them absolute independence and control over their business.
In conclusion, online commerce offers consumers numerous benefits, including convenience, lower prices, improved customer service, and a larger market. By taking advantage of these benefits, consumers can enjoy a better shopping experience and greater value for their money.
Launching an Online Business in Nepal: Steps to Follow
Starting an online business in Nepal can be a rewarding and exciting experience, but it also requires careful planning and execution. Here are the steps you need to take to launch an online business in Nepal:
- Research and Planning: Before launching an online business, it is crucial to conduct thorough research and planning. Identify your target audience, research your competition, and develop a business plan that includes your goals, strategies, and budget.
- Choose Your Products or Services: Decide what products or services you will offer on your online store. You may consider selling products that are unique, in high demand, or offer a better value proposition than your competitors.
- Register Your Business: Like any other business, an online business needs to be registered with the relevant authorities to operate legally in Nepal. You can register your business as a sole proprietorship or a private limited company, depending on your preference and business structure.
- Obtain Necessary Licenses and Permits: Depending on the nature of your business, you may need to obtain additional licenses and permits from the relevant authorities. For example, if you plan to sell food items online, you may need to obtain a food license from the Department of Food Technology and Quality Control.
- Choose a Domain Name and Hosting: Choose a domain name for your online store that is easy to remember and reflects your brand. Also, select a reliable hosting provider that can handle your website’s traffic and offer secure payment processing.
- Build Your Online Store: Develop your online store using a platform that suits your needs, such as Shopify, WooCommerce, or Magento. Customize your store’s design, add your products, and ensure that it is user-friendly and easy to navigate.
- Market Your Online Store: Once your online store is live, it’s time to promote it to your target audience. Use social media, search engine optimization (SEO), paid advertising, and other marketing channels to reach potential customers.
- Launch Your Online Store: Finally, launch your online store and start accepting orders. Ensure that your website is secure, and transactions are processed smoothly.
In conclusion, launching an online business in Nepal requires careful planning, registration, and execution. By following these steps and continuously improving your online store, you can succeed in the competitive world of eCommerce.
Accounting Process for Online Shops in Nepal
The typical accounting process for an online business involves several steps. First, it is important to make wise purchases and carefully select the products that will be sold. Once you have decided on the products, you can add them to your social media accounts and online store to start selling.
As sales begin to roll in, you will need to get the products to your customers through a reliable delivery system. It is also important to create your own shopping list to keep track of inventory and ensure that you have enough stock to meet customer demand.
When selling products, you will need to calculate the sales price and deduct any sales expenses to determine your profit. It is crucial to keep accurate records of all transactions and expenses, as taxes must be paid on your profit.
One option for an online business is to provide a marketplace where suppliers can list their goods and customers can buy them. In this model, the platform provider typically takes care of the delivery and payment processing.
Alternatively, you could offer a platform where buyers and sellers can converse and make money from paid listings, advertisements, and other means. The key is to have complete freedom in how you set up your marketplace and provide a seamless experience for both vendors and customers.
Standard Accounting and Business Practices for Marketplaces
If you are running a marketplace, there are standard accounting and business practices that you need to follow. Here is an overview of the typical process:
- Create your platform: As the marketplace operator, it is your responsibility to set up and maintain the platform where vendors can list their products and customers can make purchases.
- Vendors list their goods: Once the platform is set up, vendors can join the marketplace and list their goods for sale.
- Customers make purchases: When a customer buys a product, they pay for it through the platform.
- Fulfill the order: As the marketplace operator, you must retrieve the product from the vendor and deliver it to the customer.
- Present the vendor’s bill: After the product is delivered, you present the vendor with a bill for your commission. This is typically a percentage of the sale price, usually between 1% and 5%.
- Calculate your profit: Your profit is equal to the commission you charge the vendor for each sale.
By following these standard practices, you can ensure that your marketplace operates smoothly and that you are able to generate a profit from the transactions that take place on your platform.
If you choose the hybrid business model where you sell your own goods and also provide a platform for others to sell, it is important to maintain separate accounts for your own sales and vendor commissions. This will help you accurately calculate your overall profit and vendor commissions.
It is also important to remember that the commission you receive from vendors will be subject to taxation. Therefore, it is essential to keep detailed records of all transactions and commissions for tax purposes.
By following standard accounting and business practices, you can ensure the success of your online business in Nepal.
Starting Online Business in Nepal
To start an online business in Nepal, you first need to register your business with the relevant government departments. If your business is solely online, you do not need a specific license, but you still need to register with the Cottage and Small Industries Department and pay a fee of NPR 100.
There are two options for registration:
Option 1: Register with the Cottage and Small Industries Department and then register with the Department of Commerce to obtain an IRD PAN (Inland Revenue Department) certificate. Once you have the certificate, you can start your online store.
Option 2: Establish your business and register it with the Cottage and Small Industries Department. Then, obtain a PAN certificate from the IRD and start your online store. Additionally, if you plan to import or export under your business name, you need to register with the Department of Customs and obtain an EXIM code.
It is important to follow standard accounting and business practices, and maintain separate accounts if you choose to have a hybrid model where you sell your own goods and provide a platform for others to sell their goods.
I want to sell goods online in Nepal. Where should I register?
To register your online store in Nepal, you need to register with the Department of Cottage and Small Industries. If you plan to grow your business or bring on more partners in the future, it is recommended to register as a company with cottage and small industries. However, if you plan to operate on a small scale and this is a personal business, registering with cottage and small industries is sufficient.
Can I start a business or firm in my hometown and sell your goods all over Nepal?
Yes, you can start a business or firm in your hometown and sell your goods across the nation. However, it is important to keep your accounts and registers at your central office. Additionally, if you plan to open physical locations in other areas, you may need to comply with local government regulations.
The development and maintenance of e-commerce law in Nepal involve several government organizations. A new draft of the national e-commerce strategy is being prepared for immediate implementation. Once the draft is completed, it will be submitted for approval to the Ministry of Industry, Commerce, and Supplies, and will take effect right away. As soon as the government releases new regulations related to online shopping, this section will be updated.
Who is responsible for supervising or regulating online businesses and those associated with eCommerce in Nepal? Are there any specific laws or regulations in Nepal that govern eCommerce?
As of March 02, 2023, Nepal does not have any specific laws or regulations governing eCommerce businesses, and there is no specific entity that regulates the eCommerce market. However, the Nepal government has promised to introduce legislation to regulate online commerce and shopping. Netra Prasad Subedi, the director general of the Department of Commerce, said that appropriate standards are needed to protect consumers in light of the boom in eCommerce during the lockdown. Assistance is available for registration procedures, accounting guidance, and compliance with tax laws for operating an online store. Additionally, part-time or visiting accountants can be sent to assist with statutory, legal, and accounting concerns. A new draft of the overall strategy for eCommerce, based on a national eCommerce strategy, is being prepared for immediate implementation and will be submitted to the Ministry of Industry, Commerce, and Supplies for approval before taking effect.