eCommerce in Nepal
Kaymu welcomes you to the comprehensive report on modern day e-commerce trends1 in Nepal. What the future of e-commerce holds in the forthcoming era can be defined by the connected consumers, however Kaymu has created this report based on the geo-targeted e-commerce trends across Nepal by carrying out an in-depth analysis of the trends demonstrated by the e-commerce community in Nepal during the recent couple of years. This report intends to educate e-commerce entrepreneurs as well as those who are, in any other way, associated with this rapidly developing industry in the region.
The e-commerce industry is profoundly impacted by the rise of social networks and the proliferation of mobile devices at an enormously large scale. Since mobile devices such as smartphones and tablets have made a vast number of choices and plenty of information available at fingertips, consumers are leaving behind traces and records of their behaviors, preferences and interests; and this report aims to capture and analyze all these trends.
As modern e-commerce strategies across the globe are a result of the online activity of consumers and the resulting data record, it is a good idea for current as well as future e-commerce entrepreneurs to study this report and consequently craft effectual strategies for their online businesses. The market dynamics mentioned in the report are at the epicenter of key developments that we believe, define the e-commerce trends for the modern day and provide a sound basis for future forecasting.
Kaymu, the largest online marketplace of Nepal aims on providing a single platform to buyers and sellers across the globe to buy/sell products with the ease of a few mouse-clicks. Kaymu has multiple e-commerce domains spread across many countries worldwide. Backed by the world's largest Internet incubator, Rocket Internet, this online marketplace has been successful in generating substantial amount of traffic on all its domains worldwide.
As per Kaymu's research and critical analysis of collected facts, it can be observed that younger population - between 18-34 years - is most actively involved in e-commerce transactions2, as compared to the rest of population. One of the reasons for this conclusion is the fact that people above the age of 35 are less inclined towards technology and its usage, whereas youth between 18-34 years are at the forefront of the technological revolution and are more open towards online shopping.
E-commerce activity in Nepal, segmented by age groups
- E-commerce Transactions: An e-commerce transaction is completed when a user adds a product to the cart and then confirms the order.
Nepal's overall e-commerce activity in terms of gender reveals the fact that males account for 72% as compared to 28% females. However, the average ecommerce conversion rate3 for both genders remains nearly the same.
Activity of male vs female in e-commerce across Nepal
- E-commerce Conversion Rate: The percentage of website visitors that actually buy online. For example, if hundred visitors landed on a website and only two of them purchased the product, the e-Commerce conversion rate would be 2%.
Kathmandu, being the capital city and the largest municipality of Nepal, prevails the list of yearly e-commerce activity in the country with 53%, closely followed by sub-metropolitan municipality and third largest city of Nepal i.e. Biratnagar with 23%. Pokhara, the sub-metropolitan municipality and the second largest city of Nepal stands at third place with 8% of the country's total e-commerce activity each year. The city of Bharatpur, located in Chitwan Valley with 4% of the country's total e-commerce activity, remains the fourth city of Nepal with highest inclination towards e-commerce.
Statistics showing geo-targeted e-commerce trends in Nepal
By classifying modern day e-commerce trends in Nepal with respect to users' lifestyle, Kaymu observed that technophiles5 lead the list with 8% of the total e-commerce activity in the country, followed by movie lovers6 at 7%, TV lovers7 at 6%, shutterbugs8 at 5%, News Junkies & Avid Readers at 4.5%, World Music Fans at 4%, Entertainment & Celebrity News Junkies with 3.5%, Mobile Enthusiasts at 3%, Travel Buffs at 2.5% and Music Lovers9 with 2% share of the total e-commerce activity across Nepal.
There are several other classifications that consist of less than 2% share of the shopping profile. The following graph shows more than 50% of the major affinity categories for e-commerce in Nepal.
E-commerce trends in Nepal with respect to affinity
- Technophiles: People who are enthusiastic about new technology.
- Shutterbugs: Enthusiastic photographers, who love to take and upload pictures. Work around photography and may also work as professional photographers.
- Movie Lovers: People who love to watch movies on a regular basis, are up-to-date on upcoming movies and have in-depth knowledge about movie celebrities.
- Music Lovers: People interested in a specific type of music genre (for example: rock, trance, classical, or pop), watching movies, are up-to-date with music industry news and events.
- TV Lovers: People who follow television dramas and shows on a regular basis.
E-commerce trends across Nepal pertaining to interests have remained much inclined towards Employment Queries lately. The facts show that online customers in Nepal are mostly interested in searching about employment opportunities, followed by Mobile Phones, Used Motor Vehicles, Post-Secondary Education, Apparel & Accessories, Computer Accessories & Components, Laptops & Notebooks, New Motorcycles, Dating Services and last but not the least, Used Motorcycles.
E-commerce trends in Nepal with respect to market segment
After conducting analysis of Nepal's e-commerce trends with respect to user behavior, it has to be concluded that the conversion rate of returning visitors11 is twice that of the first time visitors.
Moreover, the average session duration for new visitors12 is 5 minutes, whereas for the returning visitors, it is 8 minutes. There are several reasons for high session time13 and better conversion rate for return visitors. A few important reasons are:
Out of the total e-commerce visits in a year, 54% are estimated to be new visitors, whereas the remaining 46% are returning visitors. One of the reasons for considerably good percentage of returning visitors is the low number of e-commerce competitors in Nepal. Visitors have limited options available for online shopping stores.
|User Type||Sessions8||Avg. session duration||E-commerce conversion rate|
|New visitor||54%||00:05:00||0.80% - 1.20%|
|Returning visitor||46%||00:08:00||2.00% - 2.40%|
New vs returning visitors segmentation with session duration and conversion rate
- New visitors: First time visitors, tracked using browser cookies.
Returning visitors: Users who were visiting the website again using the same device, tracked using browser cookies.
- Session Time: The time a visitor spends on a certain website.
- Sessions: Sessions can be defined as visits (irrespective of page views). Number of times users visited websites. For example:
--- If a user visited a website three times, then it would be counted as three sessions
--- If five users visited a website seven times, it will be counted as seven sessions.
--- Also, if a person visit five pages of a website, it would be considered one session with five pageviews
Visitors who spend 0 to 10 seconds on e-commerce websites account for the highest percentage. As per findings, reasons for spending less than 10 seconds for the majority percentage of the traffic are:
Most of the e-commerce transactions fall under 61-1800 seconds sessions.
|Session Duration||Session||Page Views|
- The data is read as: (example - first row): 44% of the sessions on e-commerce websites in Nepal stay between 0 and 10 seconds consisting 5% of total page views. - Bounce Rate: The percentage of visitors at a particular website who navigated away from the site after viewing only one page.
Sessions with count one are new visitors on e-commerce websites, however those with count equal to or greater than 2 are repeat visitors. Kaymu e-commerce survey15 indicates that:
|Count of Sessions||Sessions||Page Views|
|1 - 2||61%||51%|
|3 - 5||17%||19%|
|6 - 8||7%||8%|
- The data is read as: (example - first row): 61% of the sessions on e-commerce websites in Nepal have one to two visits, and consist of 51% of total page views.
- Kaymu e-commerce survey: A survey form having questions for online buyers and sellers.
When it comes to operating systems used for browsing e-commerce websites in Nepal, Microsoft Windows leads the list and accounts for 61% of the total sessions, the average time duration remains 00:05:00 and the e-commerce conversion rate is approx. 2%. Microsoft Windows is closely followed by the Android operating system with 24% sessions, 00:03:00 average session duration and 0.9% e-commerce conversion rate The rest of e-commerce traffic in Nepal comes from other operating systems including iOS, Macintosh, Linux, Windows Phone, BlackBerry, Samsung/Tizen & Nokia OS.
With rapid evolution of technology and the advent of new and advanced software, people make use of different internet browsers to surf the World Wide Web. Our research reveals that Google Chrome is the most popular internet browser in Nepal with 56% of the total e-commerce visitors using this software, followed by Mozilla Firefox at second place with 16% of total e-commerce visitors in Nepal. The rest of the 28% e-commerce traffic in Nepal comes via Opera Mini, Safari, Android Browser, Internet Explorer, Safari (in-app), Opera, UC Browser and Mozilla Compatible Agent respectively. Moreover, Google Chrome, Mozilla Firefox and Internet Explorer and Opera lead the list of the average session duration of e-commerce users, respectively.
Safari (inn-app): When a page is viewed using Mobile Safari within another app. For example, if you use the facebook iOS app, when you click on a shared blog post, it will open the site, without passing over to the Mobile Safari app. This visit would then show as "Safari (in app)".
As a result of the research conducted by Kaymu with regards to devices used for browsing e-commerce websites each year, personal computers such as desktops and laptops lead the list with 65% of total annual traffic followed by mobiles and tablets with 30% and 5% respectively.
E-commerce conversion statistics with respect to devices prove that visitors prefer using mobile devices and tablets to gather product information, conduct research about the product specs and compare prices, whereas they find it more convenient to use desktop personal computers and laptops to finally make an online purchase.
Further analyzing mobile traffic (which is 35% of overall e-commerce traffic in Nepal) reveals that Apple iPhones remain the most used mobile devices with 16% of the total sessions followed by Apple iPads with 9% sessions and Samsung Galaxy Grand 2 with 4% sessions. Other phone models by Samsung and Micromax were also used throughout the year in e-commerce sessions and conversions. Even though Android phones are more common and affordable yet Apple iOS devices are leading the mobile e-commerce market in Nepal.
Furthermore it is imperative to note that e-commerce traffic from mobile devices in Nepal is expected to increase due to the recent launch of 3G and 4G services in the country.
Free channels are more conversion oriented as compared to the paid ones because unpaid visitors have somehow themselves initiated the buying process, or showed interest to know more about the product(s). The interest is initiated by subscribing to the newsletters, establishing a connection with the website's social pages, or specifically searching for a product on search engines. Search engines publish paid advertisements on search engine result pages (SERPs), but, organic results are considered more trustworthy and authentic as compared to the paid ads; this, in turn, results in better conversion rate for organic traffic as compared to the paid search ads.
Approximation of e-commerce traffic sources
Let's explain each channel to have better insight of each traffic medium.
- Tip: E-commerce professionals looking to increase the overall conversion rate should focus more on free traffic generating channels. Specifically, search engine optimization (SEO), increasing newsletter subscriber base and social media marketing.
- Sessions: Number of times users visited websites. For example: If a user visited a website three times, then it would be counted as three sessions. If five users visited a website seven times, it will be counted as seven sessions.
As per findings of Kaymu Nepal, less than 9% of the total online customers would prefer to buy from the website they have previously ordered from (until and unless they had some issue with product quality or delivery). The remaining 91% would prefer to conduct online research and make price comparisons, look for packaged deals and special promotions, before they could finally make a decision.
Brand loyal VS Promiscuous Customers
Majority of Nepalese people usually visit e-commerce websites between 11:00 AM to 04:00 PM. According to the research, almost half of the total e-commerce sessions in Nepal are recorded at timings between these six hours.
Apart from the high traffic, this peak time also has the maximum e-commerce transactions. The time during afternoon and evening has maximum traffic and orders as there is no considerable fluctuation in ecommerce conversion rate3 through the day.
Traffic during hour of day
Analyzing the daily change in web traffic for Nepal reveals that there is a slight fluctuation in traffic during the week except for Fridays, which is the end of a workweek in the Nepal.
Change in traffic depending on the days of week
Since e-commerce "Peak days" traffic data does not define the top conversion days, Kaymu conducted a separate analysis to conclude that Tuesday has best conversion rate and Friday with lowest.
Change in conversion rate depending on the day of week
Research indicates that there is a significant impact of seasons on the types of products sold. The sales of fashion products greatly decline during the transition of seasons. For instance, the sale of T-Shirts hiked at second place in the second quarter because of the summer season. Similarly upon winter's arrival, in the fourth and first quarters, the sales of Blazers & Jackets remained significantly high.
'Footwear' remained the top selling products in the first quarter followed by 'watches', 'blazers & jackets', 'electronics' and 'mobile accessories'.
During the second quarter of the year, footwear continued to prevail the list of top selling products followed by 'T-shirts' owing to arrival of the summer season. The other top selling products during second quarter included watches, electronics and mobile accessories.
'Watches' peaked the list of top selling products in the third quarter across Nepal followed by 'shorts & tops', 'mobiles & accessories' and 'footwear'
Just like Quarter 3, 'watches' continued to lead the list of top selling products in Nepal during the fourth quarter followed by 'footwear', 'blazers & jackets', 'electronics' and 'mobile accessories' respectively.
Similar to seasonal impact impact on e-commerce transactions around the world, special occasions also have significant impact on sales. The special occasion in Nepal such as Raksha Bandhan and Valentine's Day provide great opportunities to the e-commerce entrepreneurs across Nepal for generating adequate profits. It has been observed that the sales of gift items greatly increase during the month of February each year on account of Valentine's Day.
The top payment methods in Nepal are:
According to Google Trends for the year 2013, 2014 and 2015, Mobiles Phones and Samsung Devices remain much more in demand across Nepal compared to laptops, shoes and all other products available for online shopping.
Top & rising web searches related to shopping across Nepal, from 2013 to 2015.
- Breakout: More than 5000% increment in search queries.
'Mobile' related top search queries in Nepal, from 2013 to 2015 include 'samsung', 'samsung mobile', 'nokia mobile', 'mobile phone' and 'samsung mobile price' at the top of list. 'Samsung mobile price' being one of the top searched keywords makes it evident that a large number of consumers visited online shopping stores and marketplaces to know about latest Samsung mobile phone models hitting the market and to know their prices. The rising keywords related to mobile phones in Nepal include 'lava mobile', 'colors mobile', 'colors' and 'micromax mobile' at the top of list.
Mobile brand related top search queries in Nepal include 'samsung mobile', 'samsung', 'samsung mobile price', 'samsung mobile nepal' and 'samsung Nepal' at the top of list. The mobile brand related search query trend makes it quite clear that the people of Nepal are more inclined towards Samsung mobiles as compared to any other brands.
'Laptops' are among the top searched electronics products in Nepal after mobile phones. The top search queries relating to laptops in Nepal include 'laptop price', 'laptop nepal', 'dell laptop', 'dell' and 'laptop in nepal'. The rising searches regarding laptops in Nepal include 'laptop price nepal', 'dell i5 laptop', 'asus laptop', 'lenovo laptop', 'dell laptop price' and many more.
'Shoes' are not just among the top searched items in Nepal, but are also among the top selling online products. The top searches with regards to shoes include 'shoes in nepal', 'nike', 'nike shoes', 'shoes for men', 'adidas shoes' and 'vans shoes'.
The top trending (rising) keywords with regards to shoes in Nepal include 'shoes in nepal', 'nike', 'nike shoes', 'new shoes', 'vans', 'shoes for men' and many more.
'Samsung' remains the leading mobile phone brand in Nepal. As mentioned above, all the top mobile-brand related queries in Nepal have Samsung mobiles at the top of list. The top searches for Samsung in Nepal include 'samsung galaxy', 'samsung nepal', 'samsung mobile', 'samsung grand' and 'samsung duos'.
The top trending keywords for Samsung in Nepal include 'samsung galaxy grand', 'samsung grand' and 'samsung s5' as the breakout keywords followed by 'samsung s4', 'galaxy s4', 'samsung galaxy s4' and 'samsung core' among the rising keywords.
The following graph shows overall search trends for Nepal on Google.com.np. A closer look on the trend shows more than double volume as compared to the start of 2013, which means, at-least 100% growth in search engine searches across Nepal.
As per Google Transparency Report, fraction of worldwide traffic for Google search in Nepal is normalized roughly between 16 and 35.
How it's calculated: The graphs give a representation of the ratio of Nepal's search request rate to the worldwide request rate between 2013 to 2015. Google divides search requests from Nepal by the total worldwide traffic, giving a number between 0 and 1. Then, it multiplies all numbers by a constant, which normalizes but does not change the shape of the graphs.
According to the in-depth e-commerce analysis conducted by Kaymu Nepal, it can be concluded that the average conversion rate from all traffic channels lays within 0.80% to 2.40% (reference: New vs Return Traffic). This conversion rate is established when the customers add products to the cart and confirm the order.
However, there are also some online visitors who add products to the cart but do not actually confirm it. The visitors, who do not confirm the order after adding products to the cart, account for about 51% of the converting traffic. These visitors spend time on e-commerce websites and add products to the cart but log out and abandon their shopping carts. On the other hand, 49% of the remaining converting visitors reach the final phase of payment and complete the purchase procedure.
Estimated percentage of confirmed and paid orders
Nepali e-Commerce market is expected to achieve more than 80% growth in e-commerce transactions in the near future. This consensus is based on 10% exponential growth in e-commerce transactions for each passing quarter.
Effective growth during 2014 and expected growth for 2015 and 2016