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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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Foreign Secretary of Bangladesh meets PM

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Ambassador Asad Alam Siam, Foreign Secretary of the Ministry of Foreign Affairs of Bangladesh, paid a courtesy call on Dr. Harini Amarasuriya, at Temple Trees on 06 November.

The Prime Minister welcomed the Foreign Secretary and his delegation. The discussions focused on current regional developments and matters of mutual interest, with particular emphasis on accountability, transparency, and good governance.

Prime Minister Dr. Amarasuriya underlined the importance of institutional reforms and the need to eliminate corrupt practices to strengthen effective and transparent governance systems. Both sides also explored potential avenues for enhanced collaboration between Sri Lanka and Bangladesh in areas of shared interest.

The meeting was attended by senior officials from both countries.

The Bangladesh delegation included  Andalib Elias, High Commissioner of Bangladesh to Sri Lanka; Ms. Ishrat Jahan, Director General, Ministry of Foreign Affairs;  Md. Manuar Mukarram, Director (FSO), Ministry of Foreign Affairs; and Mohammad Nahid Zahangir, Assistant Secretary, Ministry of Foreign Affairs.

The Sri Lankan delegation comprised Dharmapala Weerakkody, High Commissioner of Sri Lanka to Bangladesh; Ms. Sagarika Bogahawatta, Additional Secretary to the Prime Minister; and  Samantha Pathirana, Director General of the South Asia & SAARC Division.

[Prime Minister’s Media Division]

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Honorary Chair of The Nippon Foundation, pays courtesy call on PM

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Mr. Yohei Sasakawa, Honorary Chair of The Nippon Foundation, paid a courtesy call on Dr. Harini Amarasuriya, at Temple Trees on 06 November.

The Prime Minister extended a warm welcome to Mr. Sasakawa and expressed her appreciation for his second visit to Sri Lanka. Mr. Sasakawa briefed the Prime Minister on the Leprosy Conference held earlier that morning, which was also attended by the President. He outlined The Nippon Foundation’s ongoing projects in Sri Lanka, highlighting initiatives that support persons with disabilities, especially students with special needs.

Mr. Sasakawa discussed the work of the Sri Lankan School of Prosthetics and Orthotics and proposed upgrading the institution to university level with government assistance. Prime Minister Dr. Amarasuriya responded positively, noting that she would instruct the Ministry of Education to assess the feasibility of this proposal.

The Prime Minister commended The Nippon Foundation’s “100 Schools Project” in the Northern Province and reaffirmed the Government’s commitment to improving educational and social inclusion for students with disabilities. She also acknowledged the resource limitations faced by some programmes and expressed appreciation for Japan’s continued support in addressing these challenges.

Akio Isomata, Ambassador of Japan to Sri Lanka, reiterated Japan’s commitment to enhancing bilateral cooperation with Sri Lanka, particularly in promoting inclusivity and social welfare.

Both sides concluded the meeting by expressing their shared commitment to strengthening collaboration between Sri Lanka, Japan, and The Nippon Foundation in advancing education, accessibility, and social inclusion.

The meeting was attended by  Yohei Sasakawa, Honorary Chair of The Nippon Foundation;  Akio Isomata, Ambassador of Japan to Sri Lanka;  Ryo Takaoka, Second Secretary, Embassy of Japan; and  Shota Nakayasu, Secretary to the Chairman, The Nippon Foundation.

Representing the Sri Lankan side were Pradeep Saputhanthri, Secretary to the Prime Minister; Ms. Sagarika Bogahawatta, Additional Secretary to the Prime Minister; Ms. Savitri Panabokke, Director General, East Asia & Oceania Division, Ministry of Foreign Affairs; and Ms. Gayanga Dias, Assistant Director, East Asia & Oceania Division, Ministry of Foreign Affairs.

[Prime Minister’s Media Division]

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Govt. corrals many more into tax net by lowering VAT threshold from Rs. 60 Mn to Rs. 36 Mn 

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Projected revenue at Rs. 5.3 Bn, budget deficit 1.75 Bn

Rs. 6,500 Mn allocated for Clean Sri Lanka initiative

Estate wages hiked to Rs. 1,750 from Rs. 1,350 per day

Rs. 1 Bn allocated to address human-elephant conflict

Rs. 342 Bn for road development programmes

The government has decided to reduce the annual turnover threshold for the registration of Value Added Tax and Social Security Contribution Levy from Rs. 60 million to Rs. 36 million.

The proposal will be implemented with effect from 01 April, 2026.

The new tax system has been proposed with the view of broadening the tax base, President Anura Kumara Dissanayake said during his 2026 Budget speech in Parliament yesterday.

He said that the total number of registered taxpayers in Sri Lanka has increased by 300,000 as of 30 September, 2025, compared to 2024.

The President made this revelation while delivering the 2026 Budget speech.

President Dissanayake also confirmed that the Simplified VAT System (SVAT) has been abolished with effect from 01 October, 2025, and has been shifted to an approved refund process to improve tax compliance and reduce misuse.

Presenting the Budget Proposals for the year 2026 commenced at 1.30 pm and continued till 5.57 pm.

According to the 2026 Budget proposal delivered by the President, the government’s expected revenue for 2026 is set at Rs. 5,300 million while the expenditure has been projected to be Rs. 7,057 million.

The Budget deficit will be Rs. 1,757 million or 5.1% of the Gross Domestic Product.

The government has proposed to remove the Special Commodity Levy on imported coconut oil and palm oil and implement the general tax structure including Value Added Tax.

The new tax system on imported coconut oil and palm oil will be implemented from April 2026, President Dissanayake said.

At present, locally produced coconut oil and palm oil are subjected to Value Added Tax and Social Security Contribution Levy, while imported coconut oil and palm oil are subjected to Special Commodity Levy at Rs. 150 per kilogram and Rs. 275 per kilogram, respectively.

The new tax proposal has been proposed to ensure a level playing field, the President stated.

President Dissanayake said that a total of Rs. 6,500 million has been allocated for the Clean Sri Lanka programme for next year.

President Dissanayake said that the land acquisition process for the proposed Kurunegala-Dambulla expressway is currently underway.

Accordingly, through the 2026 Budget, the government has allocated Rs. 1,000 million to complete the land acquisition process, the President said.

The government has allocated a sum of Rs. 342 billion for road development programmes in the 2026 Budget, President Dissanakaye stated. A total of Rs. 66.1 billion has been allocated for the Kadawatha-Mirigama section of the Central Expressway through the 2026 Budget.

Furthermore, Rs. 10.5 billion for the Pothuhera-Rambukkana and Rs. 20 billion for the Rambukkana-Galagedara section of the central expressway have been allocated through the Budget.

The President said that through the 2026 Budget, a sum of 25,500 million has been allocated to develop Sri Lanka’s digital economy. He also pledged to establish a Digital Economy Council next year.

The allocation will facilitate the infrastructure needs, streamlining investment processes and fostering an innovation-friendly environment.

The government has proposed to allocate an additional provision of Rs. 1,000 million to the Department of Wildlife Conservation to expedite the completion of electric fence constructions and related projects aimed at mitigating human-elephant conflict across the country, the President said.

In addition, Rs. 10 billion has been proposed for research initiatives to identify long-term, research-based solutions beyond the construction of electric fences to reduce these elephant-human conflicts, he said.

Estate worker wages are to be hiked to a total of 1,750 rupees a day, President Dissanayake said, presenting the Budget for 2026.

“We believe that estate workers should be paid a fair daily wage, commensurate with their work,” the President said.

The current minimum wage of an estate worker is 1,350 rupees a day.

An additional 200 rupees will be given daily by the government to encourage estate workers to come to work, Dissanayake said.

“This is as an incentive for them to show up for the 25 days.” The government will allocate 5,000 million rupees for this, he said.

The Budget Debate on the Second Reading of the Appropriation Bill will commence on 08 November and continue for six days. The vote on the Second Reading is scheduled for 14 November (Friday) at 6 pm.

The Committee Stage Debate is set to begin on 15 November and will continue for 17 sitting days, including three Saturdays, until 05 December. The vote on the Third Reading of the Appropriation Bill is to be taken up at 6 pm on 05 December.

During the budget period, Parliament will meet daily, except on Sundays and public holidays. Sessions will begin at 9.30 am on Mondays and at 9 am on other days. Each day’s sittings will continue until 6 pm, with time from 6 to 6.30 pm allocated for adjournment motions, shared equally between the Government and the Opposition, except on voting days.

In addition, during the Committee Stage Debate, provision has been made for five Questions for Oral Answers and one Question under Standing Orders 27(2), apart from the regular business under Standing Orders 22(1) to (6).

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