Online Business VS Offline Business in Nepal

The generation today has increasingly become digital. Living without the internet is somehow a nightmare for many. With the internet, it feels like everything can be done. 

With a greater reach of the internet, there has been a great rise in online businesses too. So is online businesses also the new norm? Or is the safe traditional offline method also known as brick-and-mortar stores enough?

online vs offline business

GROWTH OF ONLINE BUSINESSES

Online businesses have seen huge growth in the entire world as well as in Nepal. Nepal took its time to adjust to digitization but now has a vast variety of its digital business world. 

E-commerce in Nepal began with the aim of letting people abroad send gifts to their families and friends in Nepal. The shift from physical to virtual stores in Nepal began around the late 1990s with thamel.com.

Fast forward to now, there are thousands of online businesses operating through social media alone! And the cherry on the top, they are diverse and ranging products available. 

Another popular online business seen in Nepal is Food. Everybody loves food! There seems to be a crazy high demand and a similar supply too. Only by typing the word cake on your Instagram, you can find bakery shops delivering to your doorstep.

Huge growth was seen in online business usage when “Daraz” joined the community. Daraz has more range than any other physical store. They have almost everything, and they deliver it to your doorstep with a 7-day return policy! This changed the game in Nepal and people started trusting online businesses.

Another booster was also definitely pandemic. People preferred ordering products online than physically going outside. 

ONLINE BUSINESSES

PROS

1. LOW OVERHEAD COSTS

Online businesses save a lot of money on rent, staff salary, and maintenance. And also the aesthetic of the physical store that offline businesses face. This allows online businesses to have lower prices, thus eliminating competition. Daraz also has big appliances like a TV and Washing Machine. A physical store would have to invest in a showroom as well as another space for storage. But with an online business, they only have to care about the storage space. 

2. GREATER REACH

With the business being online, reaching your audiences is easy. A right campaign can expose your business to a lot of people. As opposed to this, physical stores have to attract consumers passing by enough for them to enter. Or there should already be a reputation set, for people to come and visit your shop. 

3. BETTER FOR NEWCOMERS

Online shops are definitely the way to go for beginners. It gives them an amazing opportunity to sell their products and test the customer reactions. People only come to your physical store if they already know it or catches their attention as discussed above. 

4.FLEXIBILITY

Having an online business provides you with a lot of flexibility. You can operate from anywhere in the world as long as you can contact your delivery person and have an internet connection.

CONS 

1. EXPECTATION VS REALITY

The biggest problem in gaining online consumers is the doubt they have about the product. The only way of determining the product is through an image uploaded. If not done right it results in a color change due to lighting, sizing misunderstandings, and fit. Many times a consumer is faced with disappointment when the quality is completely different than expected. This results in a quick loss of trust and bad ratings.

2. CUSTOMER SERVICE

A lot of consumers just prefer going to a physical store and looking at the product themselves. With online businesses, there are a lot of comments and messages coming in daily. Asking for a price, pictures, or a different color. The business should ensure all they receive an answer and satisfactory results.

3. DISTRACTION

Online businesses have hundreds of others to compete with. On the internet users usually get distracted from what they intended to buy from other shops’ offers and designs. It is very easy to attract as well as lose consumers.

PHYSICAL BUSINESSES

PROS

1. NO DELIVERY

This is probably one of the best advantages offline businesses have over online. While customers physically appear in the stores hence the delivery is not an issue. People can simply come in, select, pay and leave. 

2. PHYSICAL STORE

For many, no matter what, the real joy of shopping comes from going through products, trying them, and strolling around pretty stores. Doing it online is not the same. There are a lot of people who prefer offline, physical stores. People can’t be stuck home all the time. The social setting of shops is what attracts people. 

3. COMPETITION

The competition faced by physical stores is a lot less as in comparison with online. Offline stores only have a couple of competitive similar stores around their location. While on the internet there are many similar shops offering similar products if not the same.

4. CUSTOMER SATISFACTION

While we already discussed the expectation vs reality of products for online stores. However, this will never be the case for offline stores. Customers can themselves try and test the product so there won’t be any complaints about the product later.

CONS

1. TIME CONSUMING

A physical store is a very big commitment. You need to maintain it, might need to hire staff and of course pay rent. An online business however requires a lot less commitment.

2. EXPOSURE

Even after opening the store all day, there still goes a lot of exposure to water when the store is not opened. The business is only in action till the store is open. While an online business is open 24 hours and gains consumers overnight too. 

Also Read: The aggressive market of cloud kitchen in Nepal.

HOW TO OPEN AN ONLINE BUSINESS IN NEPAL?

After all the pros under online business do you want to take your chance too?

 Well here are some basic tips on how to start your online business in Nepal.

  • The first step is to decide what you want to sell. You should have all the stock and materials ready to go. This process should also consist of brainstorming and research. You should be heavily familiar with your target consumers. You need to study what they prefer and what makes them want to buy an item.
  • Now you decide if you want a website or a social media account for your business. If you want a website, you can book a domain name through companies like Brainfoxs, Prabhu Host to name a few. If you want a social media account you can create a designated email address and make the account.
  • You should now register your business in the Office of Company Registrar Nepal and follow the rules. Then from the Inland Revenue Department, you have to get a Permanent Account Number. And now you also have to pay taxes, whew!
  • Now you decorate your website/account. You have to upload pictures and they should stand out. You can accessorize your business with logos, and offers to attract consumers. 
  • The next thing to take care of is the logistics. Since you are going to be a beginner you can collaborate with courier services. You can even send parcels through Pathao.
  • MARKETING: Online business functions mostly through marketing. Marketing is a crucial part of any business today. You have to ace on this part to make your business successful.

Final Words

Now that you have the analysis of both online and offline businesses, which one is the better option? 

The smartest answer might be brick-and-click businesses! This is a combination of businesses that have both online as well as physical stores. An example would be KFC, they have physical outlets as well as service through foodmandu. 

What are your thoughts??

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