Why eCommerce will Dominate the Retail Space in Sri Lanka in the next 5 years.

Walmart announced last week that it will significantly increase its investment in their eCommerce operations. They have realized (a little late) what they should have realized a long time ago; that eCommerce will be a game changer in the retail landscape and now they are trying to play catch up. This will end up costing them US $ billions more than if they had either invested or bought over an eCom player sometime back in order to address the balance of power in the retail sphere.


It was not long ago in 1999 when Amazon’s top line was a paltry US $ 1.6 billion compared to Walmarts US $ 138 billion (NY times Report). Around the same time an Amazon market cap was at US $ 20 billion to Walmarts US $ 260 billion (Wiki Inest). I am fairly sure that Walmart saw Amazon as little more than a nuisance, even perhaps a house of cards that was bound to fail. They probably waited for that outcome, but it never came.

Over the last 15 years Amazon has been gaining more and more of the total retail market and now dominates the online market place. This is reflected, now more than ever, in the stock price of each company with Amazon’s stock market value surpassing Walmart’s for the first time in July and now exceeding Walmart’s by more than US $70 billion. Amazon’s stock is up more than 80 % this year. Walmart’s has declined 30 % (NY times Report), and for those who want to invest and make money the better bet has been Amazon for some time now

What does this mean for Sri Lanka? It essentially is a clear sign of things to come in the total retail space in the island. What happened in the US took 15 years, in Sri Lanka this will happen in 5 and here is why.

Smart phone penetration this year is growing at a staggering 30%, with mobile data and access becoming more and more common. What this means is that more people will have easy, cheap access to the Internet than ever before. Mark Mahaney, who covers Internet retailing for RBC Capital stated that in the US market the factors that aid in selling are price, convenience and choice (NY times Report), which are factors that come as a natural advantage for an eCommerce company compared to traditional retail. In Emerging markets I would add ‘Trust’ to be another factor that determines purchase patterns for consumers, which is quickly being established by some of the more entrenched players in the Lankan market among the consumer base. eCommerce will have price, convenience and a choice advantage compared to their brick and mortar competitors.

Some may argue that in mature markets eCommerce has become the norm in retail, whereas in emerging markets such as Sri Lanka eCom continues to be a distant alternative. This may be true today, but times are changing; the eCom players who will weather the current storm in terms of ‘time’ will prosper in the coming years beyond all expectations.

However, this will not take place in a vacuum; to get the ball rolling and for the eCommerce industry to flourish in Sri Lanka it will need a favorable policy to continue to attract investment from here and abroad, and policies that aid in the process of online transactions taking place. I believe from the discussions that I have had with frontier market Venture funds that in time to come eCom will be one of the top attractions for FDI in Sri Lanka.

Further to this the current nascent industry will also be greatly strengthened by the backing of entrepreneurial and industry heavy weights.

What is inevitable however is the rise of eCommerce as both a viable and strong player in the retail fabric of Sri Lanka for the foreseeable future.

All views expressed in this article are the personal views of the author, Lahiru Pathmalal, who is CEO/Co Founder of takas.lk


NY Times Report

http://www.nytimes.com/2015/10/23/business/walmart-plays-catch-up-with-amazon.html?_r=1

#Sundaying#Saturdaying #Tuesdaying why I do it?

Whenever I run in to someone I know these days, people always make a comment about if I work or not. “Lahiru, you are always #Sundaying#Saturdaying #Tuesdayingwhen do you everwork?”, the reality is that I work all the time and for the last year and a bit I have not taken a vacation ( otherthan public holidays, and weekends) but if someone was to look at my FB wall it will be full of pictures of my #Sundaying#Saturdaying #Tuesdaying… how is this possible? And why do I do it?

Its possible because I live in Sri Lankaa island that is fairly spectacular. Where most locations that you might want to run off for a break is just a few around the corner. Its easy to drive up to a lovely beach, or get up to the hills. So if you want to do it, the only person whose stopping it is you.

And why I do it because I love to, and as a CEO your generally under a lot of preassure; and as any CEO knows that you have to find your own little way to unwind. Driving a few hours for a night to be at a place that I love helps me deal with work related stress, and this helps me be a better CEO, friend and a overall nice guy.

Also a firm beliver in livinglife to the fullest, so try to do things that I love to do with the free time I have.

Dr. Douglas McKenna, an industrial and organizational psychologist who help establish Microsoft’s executive and management development group in the 1990s, stated that its super important to to deal with stress in an effective way (which could be different things for different people); if they continually manage to do this they can more easily start thinking and reasoning clearly, free of stress responses (FrobesArticle; Stress Management for the CEO)

Making use of the free time you have to relive stress is critical in handling pressure when push comes to shove.  This end of the day makes you better at dealing with both your work and private life.  So if your not doing it already take the time to figure out what works for you! And encourage people around to take some time off and do what they love! It will make them a lot more productive and help you reach your targets much sooner..

Shakya Lahiru Pathmalal is the co-founder CEO of takas.lk