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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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Sajith blames ‘Viyathmaga doc’

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Cause of Mahara Prison riot:

By Saman Indrajith

The recent Mahara Prison riot erupted as 120 inmates afflicted with COVID-19 had been taken there from the Welikada prison at the behest of a Director in charge of prisoners’ health, who was a Viyathmaga member, Opposition Leader Sajith Premadasa told Parliament yesterday.

“Many explanations have been given by ministers about the riot at Mahara Prison. The number of deaths is not yet known and around 120 are wounded. One minister said that there was an invisible hand behind the clashes. Another said the motive was to bring the government into disrepute internationally. A theory was concocted that prisoners had taken some narcotic tablets called Reverse and they and fought because they wanted to see blood. But the truth is otherwise. The real cause is that 120 inmates infected with coronavirus were transferred to Mahara from the Welikada prison at the behest of a director in charge of prisoners’ health. That director is a member of the Viyathmaga. Those who were transferred to Mahara prison caused a cluster of 183 persons. As the infection spread fast there was unrest and tension. That was the reason for Mahara riots.”

He said that ministers had their own theories, but one day the truth would surface. “I hope that the ministerial committee appointed to probe the riots will conduct an impartial investigation and they will reveal the truth.”

“Prisoners have rights. I do not wish that this country would permit the perpetuation of the killing culture and state terrorism. The government members should keep in mind that there is a concept called rule of law and we all are expected to uphold it. So, we should dump those theories of Reverse tablets and strive to find the truth.”

Public Security Minister Rear Admiral Sarath Weerasekera: The health officer in charge of Mahara Prison is not a member of Viyathmaga.

Opposition Leader Premadasa: I did not say so. What I said was that 120 inmates were transferred from Welikada prison to the Mahara prison violating COVID-19 protocols. That order to transfer those had been given by a doctor who is a member of Viyathmaga. I do not mention his name. You can easily find it.

Chief Government Whip Highways Minister Johnston Fernando said that the Opposition leader talked of lofty ideals of prisoners’ welfare but the yahapalana government had failed to construct at least a single prison to ease the congestion in the prisons. “When I was incarcerated by your government, I was in a cell with 51 other inmates. There was no place to sleep. In the Kegalle prison, they put 225 in a hall enough for 50 inmates. The former government pre-occupied with the task of constructing new courts to imprison its political enemies but did not build a single prison for the benefit of inmates.”

Opposition Leader Premadasa: We did not want to build prisons, we built schools. Mahatma Gandhi has once said that when you open a single school, thousand prisons could be closed. We followed that.

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‘It will take four years to ensure quality of drinking water from small projects’

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By Saman Indrajith

The safety of drinking water from small scale community drinking water projects could guaranteed only after the implementation of a project to check the quality of water and that would take four years, Water Supply Minister Vasudeva Nanayakkara told Parliament yesterday.

The Minister said so, when Matara District SJB MP Buddhika Pathirana pointed out that although the safety of drinking water from the National Water Supply and Drainage Board was guaranteed the same could not be said of water from small scale projects.

“There are many harmful elements in water such as lead, cadmium and mercury. We know that Water Board supplied water is purified, but water from small scale project could be contaminated with them. It is said that mercury in a CFL bulb has the potential to pollute around 6,000 litres of ground water and causing kidney diseases. This is a dangerous situation. One trillion rupees have been allocated for the Water Supply ministry. Apart from the COVID-19 threat, the biggest threat to the lives of people in this country is from non-communicable diseases. Can the ministry introduce a mechanism to provide each district with at least a single testing unit to ensure the safety of drinking water supplied by the small scale community drinking water projects.”

Water Supply Minister Vasudeva Nanayakkara said that safety of water from the Water Board was guaranteed owing to sophisticated purification methods employed by treatment plants. He said that it would take at least four years to provide testing units to ensure drinking water from the small scale community drinking water projects countrywide too is safe from harmful elements.

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Teachers’ Union boss Stalin accuses govt of attempting Akila’s failed stunt

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By Rathindra Kuruwita

There was an attempt to create a new post, Director General – Sports, at the Ministry of Education and to appoint a political henchman, Ceylon Teachers Union (CTU) General Secretary, Joseph Stalin told The Island yesterday.

“According to the Education Administrative Service minute, any appointment has to be made through a competitive exam. However, this post has been created through a Cabinet paper and an SLPP henchman is to be appointed to it.”

The CTU General Secretary said that during the yahapalanaya administration, then Education Minister Akila Viraj Kariyawasam had tried to appoint a UNP henchman to the post of Director – Sports at the Ministry. Kariyawasam had been compelled to back off due to the stiff opposition of the education sector unions, Stalin said.

“The court has also ruled that people should be appointed in keeping with the Education Administrative Service Minute. The President came into power promising to uphold the rule of law, but this government, too, is attempting to undermine the education system by appointing unqualified people to high posts.”

The post of Director General – Sports would have the same perks of an Assistant Secretary and the person to be appointed was a person representing a government affiliated union, Stalin said.

“95% of unions of the education sector will oppose if the government creates this post for the benefit of a henchman. We will resort to trade union and legal action.”

Minister of Education, Prof. G. L. Peiris was not immediately available for comment.

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