Over the last
year, Sri Lanka's e-commerce industry has seen rapid development, with a large
percentage of shoppers venturing onto the digital platform. A rise in trust on
available goods and online payment gateways has accompanied the shift in
attitude towards e-commerce. Specifically, as Sri Lanka's largest online
marketplace, Daraz saw a considerable increase in terms of orders and net
market value in 2019 along with a drastic increase of 11.1% YoY growth in
sales.
Collecting data
from its platform, Daraz released an e-commerce index that shows key
demographics, consumer behaviour and online shopping trends in Sri Lanka. The
figures show a 1.5X YoY rise of active users with a 2.5X increase of last
year's number of orders.
The western
province holds 50 per cent of the largest online order share while the central
and northwestern areas follow with 10 per cent and 9 per cent order shares,
respectively. With 31 per cent in the former and 15 per cent in the latter,
Colombo and Gampaha lead the district wise order distribution. Concentration at
these locations is a reflection of the country's population density.
Concentration at
these locations is a reflection of the country's population density. There is,
however, an indication that main cities such as Colombo, Gampaha and Kandy are
expanding towards developing towns such as Kurunegala, Kalutara and Gampaha. Of
Sri Lanka's total online shoppers, 85 per cent claim to have shopped on Daraz
with 94 per cent using the Daraz Mobile Online Shopping App, which is available
on both common mobile OS platforms. The Daraz mobile app is considered the best
mobile online shopping app for Android and also the best mobile online shopping
app for Apple iOS, particularly in Sri Lanka.
Shoppers with
different shopping behaviours fell into three specific groups. Recreational
shoppers who enjoy searching for the latest trends are the 'young internet
shoppers' aged between 18 and 24 years. They 're tech-savvy, brand loyal and
less price-conscious. The 'well-educated shopper' consists of the 25-30 year
age group, whose decisions are influenced by consistency and reliability. Although
there is brand loyalty, this category also looks for the best deals and flash
sales, with a majority of personal and home items in their shopping cart. They
are conscious of consistency, are less adventurous and expect prompt delivery.
The Daraz
e-commerce index uses two metrics; the percentage of the overall net
merchandising value, and the percentage of orders. The average order value
increased by 27.27 per cent in 2019. Health and Beauty goods online came in close
to second while LED TVs, Audio/Video, and Gaming Consoles have continuously
sustained their development in terms of category.
During November
and December, both categories show an improvement in both sales revenue and
order numbers, with the highest “11.11 sale” in Sri Lanka, followed by Black
Friday in Sri Lanka and the seasonal Christmas sale taking place in these
months. Therefore, the local online shopper follows global trends and indicates
a positive direction for e-commerce.
OSL Take: Sri
Lanka is currently engaged in a programme to transform the country into an
e-economy. The regime of Sri Lanka has launched many programmes and provided
many incentives to businesses involved in ICT to help develop the country's ICT
and digital infrastructure sectors. As a result of all this, business/investment
opportunities in Sri Lanka's ICT and digital infrastructure sectors have
expanded.
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