E-COMMERCE SECTOR
Compiled by Yamini Sequeira
ONLINE SHOPPING EVOLUTION
Firaz Markar believes robust logistics can help e-commerce proliferate
Q: Could you tell us how the e-commerce sector in Sri Lanka has changed in the post-pandemic era?
A: The sector experienced phenomenal growth during the pandemic with multiple strict lockdown environments pushing audiences who were acquainted and unacquainted with e-commerce to shop online.
The Sri Lankan market – and many South Asian markets for that matter – requires a certain degree of trust building for people to shop online. This could be what we call ‘hyper-locally’ (friends, family, acquaintances and so on) or ‘hyper-nationally’ (multiple large brands, large adoption focussed marketing spends and the like) influenced adoption.
But the outbreak of the pandemic bypassed this requirement due to there being few avenues available for people to access goods and so the adoption of e-commerce skyrocketed.
Following this period, there’s been continued sector growth with network impacts taking hold through amplified hyper-local influence created by the mass of adopters during the pandemic.
Q: In the prevailing economically stressed environment, do the same e-commerce rules apply or are measures being taken to innovate?
A: I believe that the same market rules continue to apply with some adjustments being called for as core needs and spending patterns have varied. The local market has always been value savvy and this is coupled with the need for exceptional customer service.
We continually strive to improve in this area.
More recent actions have been geared towards ensuring that we enable strong value creation within the supply chain to pass it onto customers while ensuring that we don’t compromise service standards.
The sector in general is shifting to this point of view.
Q: Do you believe that the e-commerce sector is well regulated in terms of quality and the redressal of consumer complaints?
A: I would say so. National regulatory standards apply to the sector and consumer protection nets are established to address any pain points faced by customers.
Additionally, businesses also have a responsibility to ensure that as we progress through the phase of driving adoption and growth, the best possible standards of service are in place to ensure that trust in the sector is built.
Q: What are the obstacles impeding the rapid expansion of e-commerce?
A: The main challenge is the need for greater education on e-commerce and its ability to drive first usage. Infrastructure and baseline access in Sri Lanka is fantastic, and there’s a relatively high repurchase rate once a customer has experienced e-commerce.
However, the rate of adoption can be increased substantially with wider education to encourage experiencing e-commerce.
Q: And what do the statistics indicate in terms of e-commerce users in Sri Lanka, as well as the rate of adoption?
A: A recent survey reveals that 60-70 percent of the population with access to the internet – varying by province – have shopped online at least once. However, the frequency of online purchases compared to offline is estimated to be between five and 10 percent of all transactions.
Approximately 30 percent of the sample population say they have been shopping online since the pandemic and we’ve seen steady growth since then.
Q: Logistics is a key pillar of e-commerce success. What is your assessment of the logistics capabilities in the country?
A: Sri Lanka has pretty good logistics capabilities. There are good service providers in the market catering to e-commerce and social commerce players, which has led to reasonably fast origin to destination service.
Most social commerce sellers now have access to and provide services such as cash on delivery to cater to market needs. Efforts are being made to strengthen the capabilities within the sector and support its growth.
Q: For companies and nations, what are the main areas that need a sustainability focus, in your opinion? And what role does e-commerce play in this regard?
A: I don’t think there is a singular focus area here.
Business priority and decision making must continually be centred on the longer-term sustainability of our actions.
Be it consumable resource management, human resource management or the day-to-day modus operandi, we need to ensure that long-term 360 degree viability becomes the foundation for decision making.
E-commerce has a strong role to play here. The sector has a large labour cadre and deals with a high volume of commerce on a daily basis, which enables benchmarks to be set in many areas.
This is currently taking place within the sector, be it with the transition to electric vehicles (EVs) for transport, inclusivity across the workforce or labour flexibility, led by the growth of the gig economy.
Q: How do you view 2024 for e-commerce in general in the local context?
A: I believe that the market is in good shape and on a positive growth trajectory. With greater participation from the market and the growing adoption of such platforms, I believe this will be a great year for e-commerce growth.
Additionally, the increasing digitalisation of government and non-government services will provide a further boost to this upward trajectory.
