E-commerce market running amok for lack of Legislation?

by Khatapana

Nov 6, 2022 - 2 min read

E-commerce market running amok for lack of Legislation?

The e-commerce market in Nepal is seeing a boom in recent years.

In upcoming years, it is expected to reach a billion dollars size.

However, the much talked about legislation governing the sector has still not seen the light of the day. 

It has been nearly two years since the government prepared the draft E-Commerce Bill.

If passed by the parliament, the e-commerce legislation would regulate and facilitate the trade of goods and services and intellectual property rights using electronic means.

However, even as the online sector has been holding its breath for so long, officials are still expected to take a while to pass the much-anticipated bill, especially with elections just around the corner. 

Meanwhile, with no governing laws, customers are being cheated left right and center by unscrupulous e-retailers that are mushrooming without even registering.

For lack of a framework guiding the sector, e-commerce entrepreneurs are also facing operational hassles, and unhealthy competition.

Aspiring entrepreneurs are also lost as it is unclear how to register an e-commerce firm despite registering it with the Office of the Company Registrar. 

For example: a marketplace based ecommerce may fall under the classification of "industry" and hence has to be registered as an industry at the Department of Industry!

Take the prominent ecommerce companies like Daraz and Sastodeal who operate in this model. Accordingly, they are registered as industries and have foreign investments.

While, inventory based ecommerce may be classified as "trading" which comes under the purview of the Department of Commerce.

FYI, the inventory based ecommerce will not be able to get foreign direct investment due to restriction in foreign investment in trading.

The government officials at the concerned authorities are not able to answer the queries regarding various legal aspects like registration, approvals and many other operational issues.

So how long will this issue go on?

How about protection of consumer rights when anyone can set up a simple facebook or instagram page and start selling to customers?

Or do you think that this sector does not need regulation at all? How has your online shopping experience been in Nepal?

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