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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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Jaya Sri Maha Bodhi premises becomes a net zero carbon emission zone

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President Ranil Wickremesinghe announced plans to implement a program aimed at transforming Anuradhapura, once a major trade and economic center, into a globally renowned city. He emphasized the need to highlight Anuradhapura’s cultural, educational, commercial, and economic values and to initiate archaeological research to bring its significance to the world stage. While cities like Tanjore, Madras, and Sanchipuram receive global attention, Anuradhapura has yet to be developed to the same extent.

The President mentioned that he would discuss these plans with the Director General of UNESCO, who is visiting Sri Lanka this week. Several universities worldwide have already expressed interest in supporting these initiatives.

President Wickremesinghe made these remarks during the ceremony to commission the 150-kilowatt solar power system installed by the LTL Group at the historic Jaya Sri Maha Bodhiya premises in Anuradhapura on Saturday (13) morning . He also stated that the government would support powering the Atamasthana and the Jaya Sri Maha Bodhi premises.

During his visit to the Anuradhapura shrine, the President met with the Chief Incumbent of the Atamasthana in Anuradhapura and Chief Sanghanayake Thera of Nuwara Kalaviya Most Ven. Dr. Pallegama Hemarathana Nayake Thera and engaged in a brief discussion. After paying obeisance to the historic Jaya Sri Maha Bodhi and receiving blessings, he participated in the commissioning of the  solar power system.

Additionally, President Wickremesinghe interacted with the public gathered at the Anuradhapura sacred grounds, engaging in friendly conversations and gathering their input.

In a significant move towards the government’s national policy of reducing carbon emissions and achieving a zero-emission target, LTL Holdings has dedicated a 150-kilowatt solar power system to Jaya Sri Maha Bodhi. This marks the first phase of its net zero carbon emission plan.

This solar power system meets the entire power requirement of the Sri Maha Bodhiya precinct, making the premises of Jaya Sri Maha Bodhi a net zero carbon emission zone for the first time in history.

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Dispute over cobalt-rich seabed: FSP alleges India exploiting hapless Lanka

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Pubudu Jagoda

… Indian HC denies dispute

By Shamindra Ferdinando

Top spokesperson for Jana Aragala Sandhanaya, Pubudu Jagoda, yesterday (12) said that India was brazenly exploiting the continuing political and economic crisis here to secure rights to explore a cobalt-rich underwater mountain in the Indian Ocean, situated in an area staked by Sri Lanka in terms of Article 76 of the United Nations Convention on the Law of the Sea (UNCLOS).

Jagoda, who also represents the Peratugaami Pakshaya (Frontline Socialist Party), a breakaway faction of the JVP, said so when The Island sought further clarification after he discussed the developing situation with India, in an interview with Asoka Dias on Sirasa ‘Pathikada.’ telecast earlier in the day.

Jagoda told The Island that the unprecedented Indian move on Afanasy Nikitin seamount that lies entirely within an area, also claimed by Sri Lanka way back in 2009 as being within the boundaries of its continental shelf, should be a warning to both the government and the Opposition.

The former JVPer declared that Jana Aragala Sandhanaya would take up this issue vigorously in the run-up to the forthcoming presidential election. Jagoda emphasized that India took advantage of hapless Sri Lanka while frequently uttering like a mantra its self-proclaimed Neighbourhood First Policy and Security and Growth for All in the Region (SAGAR). The Peratagaamis-led grouping recently pledged to contest both the Presidential and Parliamentary polls.

While asserting that political parties represented in Parliament, along with the government, lacked the courage to take up this issue with India, Jagoda therefore urged the Wickremesinghe-Rajapaksa government to deal with it diplomatically at the highest level.

The Indian High Commission spokesperson said there was no dispute and asked The Island to refer to a statement dated July 08, 2024 issued by Sri Lanka Ministry of Foreign Affairs.

Appearing on ‘Pathikada’, Jagoda questioned the failure on the part of the government to respond to the Indian move much earlier.

Pointing out that India sought the intervention of Kingston Jamaica-based International Seabed Authority (ISA) to secure approval for exploration of cobalt-rich ferromanganese crusts located at the Afanasy Nikitin seamount thereby undermined Sri Lanka’s efforts to win recognition of the outer limits of its continental shelf, Jagoda said that India seemed to be resorting once again to bullying tactics.

War-winning President Mahinda Rajapaksa, who always jealously guarded the country’s interests, made Sri Lanka’s claim on May 08, 2009, as ground forces were engaged in the last phase of operations on the Vanni east front. The war was brought to a successful conclusion 10 days later.

Jagoda explained how India unfairly pressured Sri Lanka over Chinese research ship visits, finally leading to the government to declare a ban on such stays during whole of this year. The FSP spokesman also expressed concerns over the Katchatheevu issue, massive Indian poaching and the recent death of a Special Boat Squadron (SBS) member as a result of aggressive maneuvers resorted to by an intercepted trawler off Kankesanthurai.

Jagoda alleged that poaching on such a scale couldn’t take place without India’s tacit approval. “They have a much bigger Navy and significant Coast Guard assets therefore there cannot be any excuse for not being able to effectively hinder crossing of the Indo-Lanka maritime boundary at will by their poachers,” Jagoda said. Declaring that destructive bottom trawling had been banned in Indian waters though the invading Indian fishing fleet freely adopted the highly harmful method in our waters, Jagoda alleged that New Delhi conveniently turned a blind eye to what was going on in the neighbour’s waters.

Referring to the dispute over the Indian claim contrary to that of Sri Lanka, the FSPer said the Indian media coverage of the issue indicated that they intended to go ahead with the exploration of the cobalt rich region. Reference was made to India reaching agreement with Taiwan to undertake the exploration amidst rising tensions between China and India.

Acknowledging that the two issues – Sri Lanka’s submission made in terms of UNCLOS in 2009 and India’s appeal to ISA this year – were before the UN as declared by Sri Lanka Foreign Ministry, Jagoda said that the government should discuss the contentious matters with India without further delay.

Jagoda said that no political party represented in Parliament so far commented on the developing situation.

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Another FR petition to stay Presidential Poll at 11th hour

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Another fundamental rights petition was filed in the Supreme Court yesterday (12), requesting the court to prevent the Election Commission from declaring the next presidential election.The petitioner, a lawyer by profession, has argued that the 19th Amendment to the Constitution, which reduced the President’s tenure to five years from six, was not passed properly.

He has argued that the 19A must be approved by the people at a referendum and holding a presidential election, as per the aforementioned amendment, is a violation of the Constitution.

The members of the Elections Commission, the Secretary General of the Parliament and the AG were named as respondents.

The petition says that the 19th Amendment strips the President of the power to dissolve Parliament a year after it was elected. The Supreme Court at that time said the provision had to be approved by the people at a referendum for it to become law. A referendum was never held, and therefore 19A could not be considered law.

The petitioner has said the Elections Commission is planning to hold a presidential election this year based on 19A and that it is unconstitutional to hold the election until 19A is subjected to a referendum.

The petitioner has asked the Supreme Court to declare the holding a presidential election, five years into the term of the President, unconstitutional. He also urged the court to instruct the Secretary General of Parliament to subject 19A to a referendum.

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