Thursday, September 11, 2014

eCommerce the great equalizer

It was not too long ago that the electronic retail market was controlled by the big 3 retailers in Sri Lanka;Abans, Singer and Softlogic. While the 3 major players still control the lion’s share of the market there is fierce competition being created by the emerging eCom players in the island. has been one of the players that has played a role in creating direct competition with the traditional retail players for a share in the market. It is certain beyond any doubt that in the next 5 years the retail landscape will be re-drawn and one if not two major ecommerce firms will figure at the very top.


It’s expected that by the end of this year there will be 5 million internet users in Sri Lanka, this represents a growth of double digits in the last few years, and the pace of internet coverage will only grow. It’s predicted that the whole world will be online by 2030 and our little island will be wired far earlier. The cost associated with being online is also coming down dramatically, data is now cheap and the devices that are used to access data are becoming more readily accessible at dramatically dropping prices. Thus, the total number of people who will have the capability of doing online shopping is an ever increasing pool! Even if other externalities are controlled for (economic growth/incomes).

eCommerce is aided by search engines, mainly Google. Customers have far more information at their fingertips today than they ever had before. They are able to carry out market research by performing a few clicks. Thus the ability for huge marketing machines to push products at big margins for certain firms are becoming ever more difficult. This has enabled competitively priced eCommerce companies to capture customers. It has also led the bigger retailers to be far more price competitive. This trend will only continue in the future.

Why Sri Lanka?
Sri Lanka has one of the biggest rural populations in the world, and compared to the region SL also boasts a high income level. However, the rural community does not have the same level of access to products that individuals in the urban areas have due to the retail chain network being highly concentrated in urban areas. This has been the greatest driver for sales and penetration for and its growth in the recent past. This will also be the reason that eCommerce will be a far more profitable, and viable business than in other areas in South Asia.

What does this all mean?
eCommerce will explode in Sri Lanka as it has in the developed world, and I am confident it will become a profitable business in a shorter period of time than for our neighbors (India/Pakistan). But the greatest change will be experienced by the Sri Lankan Consumer. The Lankan consumer will be able to get the best possible price for the goods and they will have the greatest convenience ever experienced. Furthermore, and perhaps the best thing about eCommerce is, no matter if you live in the heart of Colombo, or in the central hills of Haputalle, you will be able to get your hands on any product you want at anytime. J