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Restarting economies – Bankers and Telcos must rethink strategies to help Ecommerce

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by Kshama Ranawana

The COVID-19 pandemic has facilitated lifestyle changes for most globally, and in this new normal, more consumers are turning to e-Commerce to purchase their daily needs.

Even though shopping online has and will, for the most part, be a trend amongst high and middle-income earners at least in the foreseeable future, the curfews and lockdowns enforced in countries across the globe in the wake of the pandemic, has brought this method of purchasing daily needs, to the notice of almost everyone.

And as online shopping becomes an attractive option for consumers, Dulith Herath, Founder and Chairman of Kapruka.com states that if e-Commerce is to become more sustainable as other businesses move towards on-line trading, governments need to take a more proactive approach to boost infrastructure.

Speaking on the ‘Restart Asian Economies” series hosted by the Friedrich Nauman Foundation for Freedom, (FNF) South Asia office, on “Ideas and Actions for the e-Commerce industry,’ on Monday, November 2nd, Herath listed four areas, which he said were on his wish list, that would give e-Commerce the much-needed support to enhance services.

Herath was joined on the panel by Sonam Chophel, the founder of Druksell in Bhutan to share their experiences and ideas on how COVID-19 impacted their businesses. The session was moderated by Dr Najamul Hossain, Country Representative, FNF Bangladesh.

In Sri Lanka for instance, explained Herath, Telecommunication Companies (Telcos) provide island-wide coverage, yet, if online shopping is to be a more viable option, then Telcos must be more competitive in its data pricing, making it more affordable for all. The government must ensure that telecommunication companies do not look only at their profits, but make pricing a level playing field so more consumers could take advantage of the e-Commerce option.

As well, it is important for bankers to think outside the box. Herath points out that, while bankers are happy to approve a loan for a farmer, owing to their limited knowledge or understanding of e-Commerce, they are more hesitant in supporting these new-wave tech businesses. He proposes that every Bank have on its Board of Directors at least one individual with an understanding of or expertise on e-Commerce.

One of the most interesting points Herath raised was the under-utilisation of the Post Office system. He asks why, a robust set up such as the Post, with a network that reaches all corners of the world, with the infrastructure and the human resources to support it is not transformed to being another FEDEX or UPS? Drawing inspiration from another of his ventures, Grasshoppers.lk, a courier company, Herath claims that all a government needs to do is to put money into that system and restructure it.

For both Herath and Chophel one of the most important aspects of the trade is ensuring that personal data collected from customers remains safe. In countries where privacy laws are either lacking or inadequate, it is up to the company to ensure that practices are in place to ensure customer databases are not shared, and that, says Herath must be enforced from top management down.

Unlike Kapruka, Chophel’s Druksell is a relatively young company and focuses on marketing Bhutanese creations, through partnerships with local artisans. Supporting a niche market, where large scale purchasing and foreign transactions are limited, the Bhutanese companies also encounter more challenges such as strong import regulations and the logistics of last-mile delivery, given the difficult and hilly terrain, one must traverse to get a product to a consumer.

However, even though most still do not understand the concept of e-Commerce, Chophel stated that with curfews and lockdowns, his countrymen realised that shopping online was the best way to obtain their groceries and other daily needs. More than e-Commerce, he pointed out, Bhutanese took to social commerce, using Instagram and Facebook to trade their products. The COVID pandemic, he says saw a spike in the domestic market, as social commerce picked up across the country.

Chophel, who explains that the Bhutanese government is currently drawing up an e-Commerce policy, which is expected to be implemented next year, states that the onus is on the government to put in the right infrastructure and investment and also take the lead in promoting better regional ties at both micro and macro level.

While Chophel finds selling within ASEAN easier than in SAARC countries, he emphasises, that it is time governments re-visited trade agreements and introduced reforms that would promote cross-border trading. Current regulations in countries within the region, he points out are restrictive and discourages e-Commerce entrepreneurs.

But Herath does not see much of a market within the region, which he points out, has the same products to offer, be in garments or tea. Instead, he has found a demand for Sri Lankan products in developed nations. When he found out that local teas were available in popular supermarkets in developed countries, but were not available on Amazon or eBay, Herath had shipped a small consignment of a well-known brand to the US, and had sold it on-line within three months. That was three years ago, and Kapruka is now the e-Commerce seller of local products overseas, with two warehouses in the US and netting in about a half a million dollars, last month, he said.

In Bhutan, though micro-businesses benefitted by pandemic induced closures, with customers reaching out more to this method of obtaining groceries etc., it is still too early to predict whether e-Commerce is the preferred option for consumers, explained Chopel.

Kapruka had a similar experience according to Herath, who stated that when the lockdown was imposed in early March this year, their daily orders which ranged from 5000 to 8000 a day, had suddenly spiked to 80,000. Despite limitations such as human resources and supply chain issues, his company had continued to take orders, Herath said, adding that in hindsight they realise that was a mistake. Ninety percent of the new customers were first time on-line shoppers, and Kapruka failed to meet their expectations. Refunding customers too had been a nightmare, because the mechanism is not set up to handle thousands of refunds a day. They have, however, retained their loyal customers, many of them expatriates.

“With COVID, we initially believed the industry would expand from one to ten, but later realised that was an artificial surge. It only doubled.’ Along with supply chain issues, the company also had to ensure all their delivery staff who visit twenty to thirty buildings a day, were safe from the virus.

Druksell also considers support from the government as vital in reaching consumers in hard to reach areas of the country. Similarly, Kapruka too focusses on delivering to second and third-tier cities which, unlike major cities have limited to access to other markets. Cash on delivery is an attractive option for consumers, who have nothing to lose if an order does not turn up.

In spite of the convenience of online shopping, one of the biggest accusations against e-Commerce is the large scale waste involving packaging. Hossain noted that of the 1.3 million tonnes of e-Commerce generated cardboard in the US in 2018, only 35% was recyclable.

Both Druksell and Kapruka, the panellists explained are concerned about the environment. In fact, Bhutan itself has very strict policies to protect the environment with its National Environment Commission making regular checks on businesses to ensure adherence to the policy. Recycled papers, encouraging consumers to order more than one product at a time to reduce packaging waste and contributing to the country’s annual tree-planting campaign are some of Druksell’s initiatives. As well, the company encourages its customers to have a stake in the well-being of Bhutan’s environment, by contributing towards their programme.

In the case of Kapruka, Herath explained that they have been successful in persuading at least one manufacturer to discontinue the use of plastic packaging. That move, and the online campaign that went with it, he said, had increased sale of the product by 40%. The company itself has invested in seeded paper for their packaging, which means that if a customer throws away the box, the seeds would grow into plants.

Chophel and Herath caution customers from purchasing goods from little known entities as the probability of fraud could be higher. As well, be wary of those who offer discounts, they say, as, in the business of e-Commerce, trust and reliability are key. Discounted products could well be nearing expiry date.

Even a small business, using Facebook as a marketing tool, should be registered with the Consumer Protection Authority to ensure legitimacy. Herath also proposes that e-Commerce be treated like just any other retail trade instead of as a lone type of business. Being considered as one group will strengthen all businesses.

One of the negative aspects of e-Commerce, they say is dealing with returns, especially the logistics involved for cross borders purchasers. Both companies have built-in pricing to deal with such situations. Herath suggests setting up a Regional returns logistics centre, preferably in Sri Lanka, while Chophel would like to see a well-regulated method to handle refunds and returns.

Both panellists see a role for FNF in the e-Commerce business; FNF, says Chophel could bring policymakers across the region together and provide capacity building training and exposure to local entrepreneurs, while Herath believes that FNF could provide small businesses training in online marketing tactics.

(ECONOMYNEXT)



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GL: Colombo Port City Bill received AG’s sanction

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…SC scheduled to commence hearing petitions today

By Shamindra Ferdinando

SLPP Chairman Prof. G.L. Peiris says that the proposed Colombo Port City Economic Commission Bill is consistent with the Constitution. Prof. Peiris, who is also the Education Minister, insists the Bill received the sanction of the Attorney General.

Prof. Peiris explained to the media the circumstances under which the incumbent government had initiated the proposed Bill. He did so having briefed Ven. Dr. Ittapane Dhammalankara Thera as regards the current political developments, at the Sri Dharmaloka Maha Viharaya, Rukmale, Pannipitiya, on Saturday (17).

President Gotabaya Rajapaksa recently presented the Colombo Port City EC Bill to the Cabinet of ministers. The 76-page Bill provides for the establishment of an EC authorised to grant registrations, licences, authorisations, and other approvals to carry on businesses and other activities in the Special Economic Zone (SEZ) to be established within the Colombo Port City.

Responding to government member Dr. Wijeyadasa Rajapakse’s bombshell accusations that the proposed Bill when enacted in parliament would transform newly reclaimed land adjacent to the Galle Face Green to sovereign Chinese territory, Prof. Peiris emphasized the responsibility on the part of the President in respect of the implementation of the project. Declaring that even an amendment couldn’t be moved without specific approval of the President, Prof. Peiris said all reports pertaining to financial matters, too, should be submitted to the President.

The former law professor also challenged those opposed to the proposed Bill claiming that the police and the military would be excluded from performing duties in the reclaimed land. One-time External Affairs Minister insisted that the police and the military enjoyed the right to exercise powers in terms of the country’s law in case of violations.

The minister said that the government was keen to create an environment conducive for foreign direct investment. However, those who now decried the Colombo Port City EC Bill conveniently forgot the formation of the ‘Greater Colombo Economic Commission’ (GCEC) under a new draconian Bill introduced by the then President J.R. Jayewardene.

Prof. Peiris said unlike JRJ’s Bill, the one proposed by the incumbent government adhered to the Constitution hence the approval from the Attorney General.

Prof. Peiris alleged that the JRJ’s Act paved the way for GCEC to take decisions pertaining to newly formed Export processing Zones (EPZ) and basically conduct its affairs outside the purview of the parliament. Claiming that those who exercised the required powers could transfer funds to and from accounts and anyone violating the secrecy faced jail terms, Prof. Peiris stressed that even the judiciary couldn’t intervene in some matters pertaining to this particular Act introduced in 1978.

According to Prof. Peiris, in 1992, the then President Ranasinghe Premadasa further strengthened the law by depriving the public an opportunity to obtain a restraining order from a court in respect of the all-powerful Commission.

Prof. Peiris accused the UNP and its breakaway faction, the Samagi Jana Balavegaya (SJB) and other interested parties of propagating lies against the project as part of their overall political strategy. The minister acknowledged that the UNP was among those who moved the Supreme Court against the proposed Bill.

Since former Justice Minister Rajapakse strongly condemned the proposed Bill at a hastily arranged media briefing at Abayaramaya under the auspices of Ven Muruththettuwe Ananda thera, several Ministers and State Ministers, Keheliya Ranbukwelle, Mahindananda Aluthgamage, Prof. G. L. Peiris, Namal Rajapaksa, Ajith Nivard Cabraal responded to their colleague on behalf of the government.

A five-member bench of the Supreme Court will begin hearing the petitions today (19).

Among those who filed cases against the proposed Bill were President of the Bar Association Saliya Pieris, PC, former lawmaker Wasantha Samarasinghe on behalf of the JVP, civil society activists, Gamini Viyangoda and K.W. Janaranjana on behalf of Purawesi  Balaya and the Center for Policy Alternatives (CPA).

Viyangoda questioned the government’s motive in depriving the public ample time and space to challenge the constitutionality of the Bill.

Purawesi Balaya spokesperson said that the disputed Bill had been placed on the Order Paper of Parliament on the 8th of April 2021, at a time when the sittings of the Supreme Court were suspended for the vacation. In terms of the Constitution any citizen seeking to challenge a Bill on the grounds that it is inconsistent with the Constitution has to do so within one week of being placed on the Order Paper of Parliament, which in this instance is the 15 th of April 2021. The petitioner said between the 8 th April 2021 and 15 th April 2021, there were the weekend and three public holidays intervening, thereby giving any citizen seeking to challenge the Bill, only two working days to obtain legal advice and representation.

Those who complained bitterly over urgent Bills exercised the same strategy as regards the controversial Bill, the civil society activist said. Responding to another query, Viyangoda said that if the government was confident the Bill didn’t violate the Constitution, it could have been properly discussed at their parliamentary group meeting before being presented to the cabinet of ministers.

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Wijeyadasa, under heavy flak over opposition to China project, says ready to face consequences

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by Shamindra Ferdinando

SLPP lawmaker Dr. Wijeyadasa Rajapakshe, PC, yesterday (18) told The Island that he stood by the accusations he made in respect of the proposed Colombo Port City Economic Commission Bill.

The former Justice Minister emphasised that he had expressed concerns publicly regarding the planned project after carefully examining the proposed Bill.

“In spite of a spate of statements issued by various government spokespersons, I’m confident of the legal process scheduled to begin today (19). The entire country should be concerned over the government move made at the behest of China.”

Responding to another query, the Colombo district MP urged political parties represented in Parliament to study the Bill with an open mind. The proposed law should be examined taking into consideration the previous UNP-led government transferring control of the strategic Hambantota port to China on a 99-year-lease and China is also in control of a terminal in the Colombo port for 35 years.

The MP said that he was ready to face the consequences of his decision to take a contrary view as regards the Chinese project. Those who had been benefited by the mega China funded project would shamelessly back it, lawmaker Dr. Rajapakse maintained, recollecting how members of parliament backed the 2002 Ceasefire Agreement brokered by Norway, shielded Treasury bond thieves et al.

Those who moved the Supreme Court against the proposed Bill included the Bar Association of Sri Lanka, MP Rajapakse said. The former Minister claimed that unprecedented tax exemptions provided to the businesses coming up in the newly reclaimed land adjacent to the Galle Face Green would pose a severe threat to the national economy.

The MP said that he didn’t personally have anything against China or any other country, but strongly believed in political and economic independence of the country. Therefore, the right-thinking lawmakers couldn’t under any circumstances vote for the proposed Bill as it was, the former Minister said.

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Hiding in obscure corner of India, Myanmar’s ousted lawmakers plotting to dethrone military junta

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BY S VENKAT NARAYAN

Our Special Correspondent

NEW DELHI:

Roughly a dozen ousted Myanmar lawmakers, who fled to India after the February 1 military coup, are now busy plotting to dethrone the generals.

In a spartan hillside room in India furnished only with a thin sleeping mat, one of the Myanmar Members of Parliament (MPs) spends much of his days attentively listening to Zoom conference calls and tapping away messages on his smartphone.

The short, soft-spoken man is among the handful of ousted Myanmar MPs who have fled across the border to India’s remote north-eastern region after the military coup and the lethal crackdown on dissent.

Two of the lawmakers and a Myanmar politician spoke to a Reuters reporter. They are involved with the Committee Representing the Pyidaungsu Hluttaw or CRPH, a body of ousted lawmakers that is attempting to re-establish the civilian government and displace the military.

The three said the group is supporting demonstrations, helping distribute funds to supporters and holding negotiations with multiple entities to quickly form a civilian administration nationwide. They asked not to be named for fear of reprisals against their families back home.

Most of the ousted lawmakers are from deposed leader Aung San Suu Kyi’s National League for Democracy (NLD) that overwhelmingly won a November 2020 election, which the military has annulled.

The coup has been met with a fierce pro-democracy movement and tens of thousands of people have taken to the streets across the country, despite the crackdown.

Security forces have killed over 700 people, and more than 3,000 have been detained, including more than 150 lawmakers and members of the former government. Mobile and wireless internet services have been shut down.

The fear of detention and inability to rebuild a civilian government without internet connectivity has driven some Myanmar lawmakers involved in the resistance to work from India, the two MPs elected to Myanmar’s Parliament said.

“There is no time,” one of them, who is from the country’s western Chin state, told Reuters. “People are dying in our country.”

A spokesman for Myanmar’s military did not answer calls seeking comment. The junta has accused the CRPH of treason. The group is working to set up a national unity government to challenge the military’s authority.

Since fleeing to India around two weeks ago, the lawmaker said he had been holding regular discussions with colleagues to set up a parallel administration in Chin state, under directions from the CRPH.

The process is complex, involving building consensus between elected representatives, political parties, ethnic armed groups, civil society bodies and civil disobedience movement leaders, the two lawmakers and the politician said.

The CRPH is also keen on opening communications with India, where at least 1,800 people from Myanmar are already sheltering. It will seek New Delhi’s blessings for the parallel government it is attempting to form, the politician said.

“We can’t rely on China, Thailand and other neighbouring countries,” he said. “The only country where refugees are being welcomed is India”.

India’s External Affairs Ministry did not immediately respond to questions from Reuters.

This week, NLD lawmakers from Myanmar’s northern Sagaing region held an online conference call, but only 26 out of 49 representatives dialled in, according to the second MP who attended the meeting from India.

“We don’t know where the rest are,” the federal lawmaker said. Two party officials were now trying to track down their missing colleagues.

Some of the fiercest resistance to the junta has come from Sagaing. In the last two months, around 2,000 families involved in the civil disobedience movement in one part of the region have been given financial assistance of around 17 million Kyat ($12,143), the lawmaker from Sagaing said.

The presence and activities of escapee Myanmar lawmakers could pose a diplomatic quandary to India, particularly given New Delhi’s close ties with the Myanmar military rulers.

But India’s position on the Myanmar crisis itself appears to have somewhat shifted in recent weeks. This has also been acknowledged by some CRPH representatives.

At an United Nations Security Council (UNSC) meeting on April 10, Indian diplomat K. Nagaraj Naidu said New Delhi is pushing for a return to democracy in Myanmar. “The first, and most immediate step, in this regard is the release of detained leaders,” Naidu said.

However, India is concerned around internal divisions within the CRPH that could hobble its functioning, a source with knowledge of New Delhi’s thinking said.

The politician involved with the CRPH said he is hopeful that India will engage with the group.

“If democracy wins in Myanmar, it is also a win for India,” he said.

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