ECONOMYNEXT – Sri Lanka has seen a remarkable growth in the online trading of goods and services which is popularly known as e-commerce, but lack of knowledge and mistrust over digital payment methods have been the key barriers, a report done in the island nation has found.
The report, based on a survey of a sample population of 4,670 between March and July 2022, showed provinces close to and further away from capital Colombo and the Western Province are not lagging behind in terms of e-commerce adoption.
“There is growing awareness of the wide range of goods and services available for online purchasing, along with interest in diversifying into new e-purchases,” the main findings of the report said.
The report is the result of a partnership between Daraz Sri Lanka and the Sri Lanka Association for Software Services Companies (SLASSCOM) with an aim to bridge crucial data gaps in the e-commerce industry, while also pointing to essential policy needs.
The survey was conducted by NielsenIQ Sri Lanka.
“E-commerce use is positively linked to education and household income,” the survey finding said.
“Middle-income households educated to at least secondary school levels (with knowledge and some financial means) tend to purchase more online than lower-income households with limited education.”
“Payment for online purchases is largely cash-on-delivery due to mistrust and a lack of education around e-commerce and digital payment methods. This outcome fits with the country’s early development stage of the e-commerce sector.”
The survey also found that many e-commerce users are discouraged from shopping online because of a lack of requisite knowledge and skills to do so, worries about the quality of online purchases and poor customer experiences after placing orders.”
The online selling of goods and services has increased since the COVID-19 pandemic and the increase is linked to low start-up costs and the need to diversify livelihoods, it said.
“Over 89% of e-commerce users indicate that a coherent and predictable policy framework can support the growth of the country’s e-commerce industry.”
“Important actions include raising awareness of the benefits of e-commerce, training on how to buy and sell goods and services online, better cyber and online security and reforms for trade and tax regimes that take the e-commerce industry and its export potential into account.” (Colombo/Feb02/2023)