e-commerce: an islandwide phenomenon in Sri Lanka - Report | Page 2 | Sunday Observer

e-commerce: an islandwide phenomenon in Sri Lanka - Report

5 February, 2023
Managing Director, Daraz Sri Lanka, Rakhil Fernando presents a copy of the report to State Minister Kanaka Herath. Chairperson, SLASSCOM, Ashique M. Ali looks on.
Managing Director, Daraz Sri Lanka, Rakhil Fernando presents a copy of the report to State Minister Kanaka Herath. Chairperson, SLASSCOM, Ashique M. Ali looks on.

Daraz Sri Lanka and the Sri Lanka Association for Software Services Companies (SLASSCOM) released an in-depth study on the adoption and use of e-commerce in Sri Lanka during difficult economic times at a roundtable discussion in Colombo last week.

The report titled “e-commerce: A Driver of Inclusive Growth in Sri Lanka?” was presented to and discussed with the State Minister of Technology, Kanaka Herath. Key report contributors were also present. 

The report is the result of a partnership between Daraz Sri Lanka and the Sri Lanka Association for Software Services Companies (SLASSCOM) and aims to bridge crucial data gaps in the e-commerce industry, while also pointing to essential policy needs. 

Dr. Ganeshan Wignaraja designed and co-authored the report with  Head of Public Policy and Corporate Affairs at Daraz Sri Lanka, Ms Anishka De Zylva.

The survey was conducted by NielsenIQ Sri Lanka, under the supervision of Country Director of NielsonIQ Sri Lanka, Ms. Therica Miyanadeniya.

Dr. Ganeshan Wignaraja said, “An expanding digital economy and the e-commerce sector are supportive of the economy’s shift from crisis to recovery in Sri Lanka’s 75th anniversary of independence. The first report on the sector aims to facilitate discussion of a market-friendly business environment by identifying micro-level dynamics of the e-commerce industry in Sri Lanka.”

The report is based on the meticulous collection of primary data through an islandwide survey of a sample population of more than 4,500 participants undertaken between March 2022 and July 2022. The survey collected information in areas that are relevant to making business strategies and public policies covering:  

(i) the use of e-commerce across provinces and districts;
(ii) the types of goods and services purchased; 

(iii) purchasing behaviour during the pandemic;
(iv) user behaviour by characteristics; 

(v) the types of devices and payment methods used for e-commerce purchases;
(vi) factors discouraging online purchasing; 

(vii the use of e-commerce for selling goods and services; and
(vii) the influence of government policy on e-commerce transactions from both a seller and consumer perspective. 

Managing Director of Daraz Sri Lanka, Rakhil Fernando said,  “e-commerce is still a relatively new industry in Sri Lanka. However, one of the main findings of this research is that e-commerce is already an islandwide phenomenon, and it is widely used for purchasing goods and services.

“Over 50% of the survey respondents in all provinces said they use e-commerce to purchase goods and services, and provinces close to and further away from the Western Province are not lagging in terms of e-commerce adoption. This is a strong indicator that e-commerce will play a catalytic role in advancing retail trade in Sri Lanka, despite the challenging landscape.

“The survey also provides many insights and ideas for the future growth of the industry, along with suggestions for a better business enabling environment which can lead to unlocking multiple opportunities if implemented within an apt policy framework,” he said.

Chairperson of SLASSCOM, Ashique M. Ali said, “The accelerated growth of e-commerce has transformed the way businesses operate in the post-pandemic world. We have observed that in our region and beyond, countries that were quick to adopt e-commerce and digital payment methods have witnessed much higher, inclusive economic growth and this positive impact and trend can be beneficial for Sri Lanka, albeit the challenges of the economic crisis.

“This report provides a baseline for steering the expansion of the e-commerce sector amidst common challenges such as a lack of knowledge on e-commerce and low levels of trust in digital payment methods.

“We hope the guidance and ideas offered by this report will be appropriately employed by the stakeholders including the Government and businesses, to create a more enabling business environment in which all businesses, including MSMES, women-led businesses, and even home-based artisans can thrive and grow in,” he said.

The report will be made available as a downloadable pdf file on the Daraz and SLASSCOM corporate websites to anyone interested in understanding the industry at a deeper level. 

Some of the fkndings : e-commerce is an islandwide phenomenon for purchasing goods and services. Encouragingly, over 50% of the survey respondents in all provinces say they use e-commerce to purchase goods and services. Provinces close to and further away from the Western Province are not lagging behind in terms of e-commerce adoption. 

Reflecting the early stage of e-commerce industry development, online shopping is dominated by consumer goods, and a number of services such as telecommunication (phone and data bills), taxi services, and food delivery, and new goods categories like groceries are trending.

There is growing awareness of the wide range of goods and services available for online purchasing, along with interest in diversifying into new e-purchases. 

The Covid-19 pandemic and lockdowns ushered in a new era for e-commerce for those sampled. There was an increase in purchasing goods and services online due to necessity. This shift seems to remain and grow in normal times even as physical shops have opened. 

e-commerce use is positively linked to education and household income. Middle-income households educated to at least secondary school levels (with knowledge and some financial means) tend to purchase more  online than lower-income households with limited education. 

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