The Covid-19 lockdown has broken seamless global supply chains. Producers, distributors, retailers, and consumers are all trying to figure out new ways of delivering essential goods so that people can survive. American consumers alone spent $347.26 billion online with retailers in the second quarter of 2020, which is 30.1 percent up compared to the same period last year. E-commerce in Pakistan started in early 2000 but just three percent of population was buying online, which during the pandemic has increased by 10 percent. Covid-19 has had a significant impact on global e-commerce and sales are expected to reach $6.5 trillion by 2023, from an estimated $3.46 trillion in 2019. Consumers spent $2.93 trillion online in 2018. But in Nepal the government is arresting suppliers and delivery personnel of online businesses.
Africa’s booming e-commerce relies on one of the most digitally connected populations on the planet, with 400 million active internet users. There, consumers from remote areas rely on e-commerce to save time and money while purchasing goods. The ASEAN countries have already marched ahead in e-commerce with an emphasis on data connectivity, logistics to facilitate the free flow of goods and services, connectivity to facilitate cash flows, and seamless links between the physical and cyber space. Online sales account for 15 percent of retail sales in China and 14 percent globally. Nepal is clearly on the wrong track.
E-commerce is the future path. But it is full of regulatory complexities with issues related to data privacy, consumer protection, delivery, cyber security, market access regulation, and digital payment. Any country that wants to walk on this path should do some serious homework to address these challenges. Shutting down entire industry without such homework harms the economy and blocks the path of progress. Moreover, it has direct consequence on people’s lives in this time of pandemic. People have been locked in, with ever-increasing fear of contracting the dreaded virus. This could be the perfect time for an e-commerce boom.
E-commerce is not limited to serving domestic consumers. It is also being considered as a platform to better integrate regional trade. The World Bank, in its flagship report in December 2019, says e-commerce can boost a range of economic indicators across South Asia, from entrepreneurship and job growth, to higher gross domestic product (GDP), to overall productivity. The report’s lead economist and co-author Sanjay Kathuria claims that by unleashing its online trade potential South Asia can better integrate into international value chains, increase market access, and strengthen commercial links among countries across the region. These words echo louder in this pandemic as the brick-and-mortar businesses are being shaken to their core.
In Nepal, there are no laws to govern e-commerce while other countries have moved much further in regulating it. In 1996, a Model Law on E-commerce (MLEC) was adopted by United Nations Commission on International Trade and Law (UNCITRAL). The objective was to bring a uniform e-commerce international law and to increase electronic transactions to bring them on par with paper-based transactions. India, a UNCITRAL signatory, has established a new regulatory regime for e-commerce businesses by endorsing a slew of laws. As per the new Consumer Protection (E-commerce) Rules 2020 of Indian Federal Government, it is compulsory for e-retailers to display critical details of all their goods.
Nepal’s is a unique case as there is neither a roadmap to enhancing e-commerce nor a foundation for it. State bureaucracy and police forces are acting as if e-commerce is a criminal activity. But despite the state bullying, e-commerce businesses in Nepal are mushrooming. Hence there is an urgent need to establish an effective regulatory mechanism to strengthen the e-commerce legal framework. This should be done to save people’s time, money and, most importantly, their lives in these dangerous times.