Expert urges Sri Lanka to expedite reforms to drive e-commerce

From left: CAA Chairman Anura Meddegoda, Industry and Commerce Minister Rishad Bathiudeen, Head of Cooperation of the Delegation of the European Union Delegation in Sri Lanka Frank Hess,  Secretary of Ministry of Telecommunication and Digital Infrastructure Chulananda Perera look on as visiting e-commerce expert from Geneva’s International Trade Centre Professor Michael Geist lights the ceremonial lamp at the launch of second e-commerce PPD in Colombo

• Sri Lanka’s e-commerce value remains small in comparison to region
• Only 0.4% of total annual retail sales taking place on e-commerce platforms

By Shabiya Ali Ahlam

Sri Lanka has much work to do for its economy to fully reap e-commerce benefits, according to an International Trade Centre (ITC) expert, who stressed the need to push for the necessary reforms so the island nation could keep up with its regional peers in this sphere.

“Sri Lanka’s e-commerce value is smaller in comparison to the region and it represents a challenge and opportunity of its potential. There are five key areas that require further work, in terms of legislative and programmatic aspects, to take this effort forward,” visiting ITC E-Commerce Expert Michael Geist told the Public Private Dialogue (PPD) in Colombo yesterday.

The PPD aims at offering relevant authorities clear guidance on policy and legislative solutions to ensure effective consumer protection, enhanced e-commerce adoption, and greater consumer choice and competition in the Sri Lankan marketplace.

The five areas that require fresh focus are: ensuring affordable access to the internet, increasing digital literacy, having a clear and transparent online payment system, ensuring privacy and data protection and modernizing consumer protection laws. While the global e-commerce space is growing rapidly and transforming commercial activity around the world, in Sri Lanka, online sales stand far behind.

The average online sales value in regional nations such as Thailand, Malaysia, and Singapore has reached US $ 900 million while India takes the lead with an average online sales value of Rs.13.31 billion.

“Although there is considerable room for growth, Sri Lanka has trailed behind many other Asian nations in connection to e-commerce adoption despite the presence of e-commerce legislation for many years,” Geist pointed out.

It was highlighted that the current scenario indicates there is a need to move beyond conventional e-commerce legislation focused on contractual certainty and look at addressing other potential barriers that act as hindrances. 

In the area of consumer protection laws and privacy, it was noted that while the laws on protection could be working for off-line transactions in Sri Lanka, it is currently not entirely in favour of ecommerce.

“With the passing of the General Data Protection and Regulation (GDPR) in EU and as a result many around the world paying close attention to these rules, there is room for action in Sri Lanka on this too,” Geist stressed. 

According to industry experts, Sri Lanka’s annual domestic e-commerce sales value is expected to grow to US $400 million by 2022. At present only 0.4 percent of the nation’s total annual retail sales (US $ 10 million) are taking place on e-commerce platforms.