The Nepali e-commerce sector, once teeming with optimism, is passing through a turbulent phase marked by rapid changes and significant challenges. The recent acquisition of a majority stake in Sastodeal by IME Group, a major player in Nepal’s business landscape, encapsulates both the struggles and the potential that define this industry.
Sastodeal, a homegrown e-commerce platform that has been dormant since early 2024, is set for a relaunch under IME Group’s ownership. This acquisition, finalised from Dolma Impact Fund, signals a renewed interest in a sector that has seen its share of highs and lows. The exit of Sastodeal’s founder, Amun Thapa, and Dolma’s departure underscore the volatility of the online marketplaces in Nepal. Despite these setbacks, IME Group’s investment reflects a hopeful stance on the sector’s recovery and growth.
Nepal's e-commerce sector has evolved significantly over the last one decade. The surge in internet connectivity, driven by a young population and advances in digital payments, has propelled online shopping into the mainstream. Platforms like eSewa, Khalti, and IME Pay have simplified transactions, fostering greater consumer trust and contributing to the sector’s expansion. According to a Redseer study, Nepal's online retail market was valued at approximately $100 million by 2021, experiencing an annual growth rate of over 100% since 2017.
The pandemic era provided a substantial boost to retail e-commerce, as consumers turned to online shopping for essentials and luxury items alike. This period saw an impressive rise in digital consumerism, with many new entrants emerging in the market. However, the economic downturn that followed has led to a noticeable slowdown. A decline in demand for fast-moving consumer goods, fashion accessories, and electronics has been observed, with online demand dropping by a whopping 40% in recent times. This downturn is compounded by rising online fraud which has eroded consumer trust and hindered growth.
Despite these challenges, opportunities for growth remain. The fact that only 9% of Nepal’s 13 million internet users currently shop online indicates a substantial room for expansion. The sector’s informal segment, which operates through social media platforms and grey markets, also highlights areas where regulatory improvements and increased consumer protection could foster further development.
Sastodeal's history is a testament to the sector's potential. Founded in 2011 by Amun Thapa, the platform evolved from a modest start into a significant player, achieving transactions worth Rs 450 million in the fiscal year 2022/2023. Its journey, alongside the rise of Daraz and other platforms, illustrates the evolving landscape of Nepal’s e-commerce.
The future of Nepal's e-commerce sector hinges on navigating current challenges and capitalising on emerging opportunities. IME Group's strategic acquisition of Sastodeal reflects confidence in the sector's resilience and potential. With continued investment in digital infrastructure and consumer protection, Nepal's e-commerce industry can overcome its present difficulties and continue its trajectory of growth and innovation.
