Online sales trend to continue post COVID-19 crisis


Charitha Subasinghe, President, Retail Sector John Keells Holdings, has predicted that 30–40 per cent of people introduced to online retail are likely to remain using that channel after the COVID-19 crisis is over.

Expressing these observations at the Ceylon Chamber of Commerce (CCC) in the presence of leading retail personalities, Mr. Subasinghe said there would be new health and safety regulations on the retail sector from May 11. Outlets will have to restrict the number of shoppers in-store at a given time based on a myriad of factors.

He expected to continue to improve the online sales offered by his group.

At the event held at CCC, Lahiru Pathmalal, Founder – Takas, said the understanding of processes was essential to shift from the sale of electronics to dry rations overnight. He said traditional retail outlets did not have the layout required to run an efficient delivery service. He felt stores needed greater depth to store more items and facilitate the order flow.

Mr. Pathmalal also said that celebration of Vesak had caused disruptions to delivery but that would soon be lifted. AliPay has set up a company in Sri Lanka to facilitate the sale of Sri Lankan goods internationally, but their services are yet to be fully exploited by local companies.

Banks are less concerned with providing payment gateways and were understaffed to deal with a large number of merchants. Though debit card penetration is high in Sri Lanka, many banks limit access to online transactions to prevent payment frauds. It was only after the COVID-19 outbreak that the Central Bank lifted the antiquated regulation on the operation of digital banking services, Mr. Pathmalal added.

Rifka Ziyard, Director, Tax and Regulation KPMG said that given the framework of the law, resident e-commerce companies would be subject to taxation while their foreign counterparts would not be. Mr. Ziyard also said India had implemented legislation to act as an equalization levy to set a level playing field between foreign and local players. Sri Lanka had signalled in previous budgets that it wanted to implement a tax framework on web-based merchants.

Panellists cited cash on delivery as a vital channel of payment, given Central Bank restrictions and a lack of trust in sellers. Mr. Pathmalal noted that cash on delivery through a courier company results in a week-long delay in the remittance of cashback to the merchant. Cash was also cited by panellists as a potential surface for the Coronavirus.