Retail Resurrection

Once thriving retail business in Nepal witnessed a decline in the recent past but now it seems poised for a revival.

Not so long ago, retail business had a sparkling presence in Nepal, with its economic policies being more liberal than that of its neighboring countries. The regional tourists would flock into Nepal to splurge on international products, anything from utensils to cosmetics. But following the outbreak of insurgency and lax government policies, the industry dipped deep into recession. As India and China opened their doors to foreign investments and products while ours remained virtually inaccessible, the benefits that the retail industry could yield for the national economy slipped out of our hands.

Wholesale and Retail Sector Outstanding Credit of Commercial Banks Source: Fourth Household Budget Survey, Nepal Rastra Bank

Years later, retail business has now witnessed some sort of resurrection with malls and supermarkets cropping up around the capital city and this uptrend is expected to reach far and wide.

So what’s fuelling this resurrection? Can Nepal be turned into a regional shopping destination again? What will be the collective impact of the retail sector on the economy? Finally, is it all practical and result-oriented or just a blip? What follows is a little insight:

Retail Industry, People, and the Economy

In Nepal, retail sector is one among numerous neglected industries, exposed to more challenges than opportunities. It’s an organized sector that fills government coffers with billions in taxes. The high-rise retail units cropping up around town offer much more than just plain employment. But lax government policies, one being high import duties (up to 40 percent) topped with 13 percent VAT, have made both consumers and corporates weary about their prospects. The growth in retail sector serves consumers by making available wider variety of goods under one roof, eliminating hassles of having to run from one store to another. The rise in the number of malls and department stores has become a must to serve the growing interest of the growing population with more money at their disposal.

Raja Ratna Tuladhar, President of the Nepal Supermarket and Departmental Stores Association (NSDSA), thinks that this spurt in malls and department stores is the need of the time “consumers have become more tech-and-brand-savvy due to their exposure to global trends.” However, he maintains that retail industry is not growing in parallel to other sectors due to the lack of government support. “Setting up a mall, a supermarket or a departmental store requires huge investment,” he says and maintains that unless the government leases or sells few of its many unused land plots at various places, thus making it possible for the investors to decide on important business decisions like ‘placement’, and creates an environment devoid of labour, power and transportation hassles, retail business will struggle to no end. “Even these simple steps can lower investment requirement easing entry of new retailers that will transfer the low-cost benefit ultimately to the consumers,” he says.

Owner of the Bhatbhateni Supermarket, Min Bahadur Gurung, also urges the government to introduce encouraging policies for the retail industry. “The current amount on import duties and the value added tax are too penalizing. The government should reconsider these duties in order to help retail industry grow and generate more revenue and employment,” he says, adding, “Also, there should be a smooth supply of power. It is not possible to run businesses like ours using generators for 14-15 hours a day. The cost of operation runs high, which translates into items being a little more expensive for the customers.” He further adds that as retail is an organized sector and if it receives more growth stimulus, it becomes easier for government to collect more revenue and the retailers to create more jobs. Nonetheless, he hopes the government will be making a welcome decision soon.

There used to be a time when Nepal served as a free port for Indian and Chinese shoppers. Goods from all over the world would come first to Nepal and people from neighbouring countries came to shop for everything from cloths to cosmetics. But the situation has turned upside down in the last few years. Now things come to India first and then get into Nepal with their price tags little more expensive. “It all happened due to the myopic vision of the government,” laments Ramkaji Shrestha, Director-Operationsof Kasthamandap Bazaar.

Malaysian Example

A good example on government policy can be drawn from Malaysia where continuous growth in the economy is attributed to its dynamic retail industry. The government there is supportive towards the sector, attracting more players who are willing to invest in new outlets, expanding the selling space, and allocating greater budget on marketing activities. Though their retail industry is still growing, its contribution to the economy is well recognized by the government. Similar initiatives are required in Nepal.

Shopping in a mall or a supermarket means consumers get quality worth their money. They get the liberty to inspect the products put on display before purchasing them and since most products found in malls and supermarkets are directly purchased from the manufactures, customers can check for manufacture date, expiry date, and market retail price. “We follow even pricing system,” informs Raja Ratna Tuladhar. “We make maximum 5 percent profit on staple goods, same as in case of Ason Bazar, but we also guarantee quality.”

CEO of Bluebird Department Store, Binod Tuladhar, says a stable government is the major prerequisite for stable policy. “This will enhance investment environment, which will increase the purchasing power of the domestic consumers,” he says, adding, “If we look at India, the middle class people are strong. The retail industry in India is sustaining mainly because of the middle class people. The purchase volume of higher class is only about 2-3 percent. Likewise, if living standard of the middle class is improved in Nepal, retail industry also has a huge prospect.” The slow growth of retail industry can be attributed to uncertain business environment, which is making people hesitant to invest. According to retail analysts, profit margin in retail industry stands about 2-20 percent, which is very low compared to other industries. In India, where retail sector is growing alongside the economy, competition has grown among the retail players, thus benefiting the consumers. But that is a far-fetched scenario in case of Nepal with it being totally import dependant for the supplies-on China for garments and India for food products. The importance of branded products is yet to be incalculated in the minds of the consumers and thus foreign investment is yet to come into this sector. Moreover, as Pradhan likes to add, “Retail being an organised sector, it collectively pays billions in taxes but receives nothing from the government, such as in terms of security and policies. We have more than 300 employees but we may have to cut the number down if the government fails to address the problems that we have been facing.”

Role of Retail

Despite all these roadblocks, there are so many malls and supermarkets under construction or on the verge of starting operation.

Min Bahadur Gurung takes the current increase in number of malls and retail outlets as a good sign for the economy. He believes that the economic benefit of retail industry is tremendous in terms of employment and government revenue. His company currently employees more than 700 people with plans to increase it to 10,000 within ten years. He says to be paying millions to the government in taxes and takes retail outlets as crucial for domestic industries to demonstrate, distribute, and promote their products. “For example, a businessman producing noodles needs retail outlets to push through his products among the consumers. Without an organized retail industry, manufacturing businesses also run the risks of losing visibility and thus market share. So all other businesses need to run in tandem with retail industry,” he explains.

Bluebird has employed 300 people and Binod Tuladhar is positive that things will change for better and he, probably, could look into expansion.

The CEO of Surya Nepal (P) Ltd., Sanjiv Keshava, also holds similar views. According to him, greater employment in retail sector creates greater shopping experience, which adds to greater manufacturing and so on. However, he believes that the current growth of retail industry does not indicate anything about the purchasing power of the people. “If all these malls are successful then we can determine the purchasing power of the domestic consumers is high. We are witnessing just an expansion and less can be said about the financial condition of the people,” he points out.

According to Dr. Posh Raj Pandey, President of South Asia Watch on Trade, Economics and Environment (SAWTEE), “If we look at the national data, about 12-13 percent of the GDP and 20-30 percent of the total employment is provided by retail industry.” He believes that the current retail expansion is fuelled mostly by the domestic consumers who enjoy shopping their entire needs under one roof and that the possibility of distortion of market structure and growth of unfair competition hardly exists for the time being. This confirms that Nepali retail industry will be enjoying a promising future because, as Dr. Pandey points out, remittances are spent more on consumption than on other things.

However, retail industry, although being an organized sector, is yet to spread out to other urban areas like Biratnagar, Bhairahawa, Dharan, and Pokhara so that it would lessen the degree of centralization, he adds. Retail units and departmental stores are enjoying greater market share due to economies of scale, which is evident through the competitive prices that they are offering. They buy in bulk at lower cost, which makes things cheaper for customers. Shopping centers are also following cross subsidy model to enhance their sales volumes. Generally, the profit margin is lowered in commodities that are sold in larger quantity. The applied model is proving to be mutually beneficial for consumers as well as retailers. Thus the industry is gradually holding consumer confidence and increasing government revenue through taxes. But the policies like the recent tax increase on retailers, who are already paying taxes, as Pradhan says, is disappointing. “We have already been paying taxes, so I can’t see any logic behind such a move from the government,” he says.

As Binod Tuladhar further points out, Nepal has no more than a handful of domestic industries but retail shops are just everywhere. “Anyone who desires to set up his own business is more likely to choose retail since capital requirement, as opposed to other industries, is less and even if one outlet fails, the financial loss doesn’t turn out to be severe,” he says. Though retailing is in small scale at the moment, the number of employment provided is more than that of any other industry. Tuladhar adds, “Along with other retail hubs, we have generated huge employment by even providing part time jobs to students.” Hamro Mart Pvt. Ltd, a new player in the market, is operating on similar vibes. Abishekh Shrestha, MD of the Mart, says, “Retail industry is growing with plenty of opportunities for stores like ours selling staple goods such as grocery, bakery, drinks and beverages, dairy products, and general medicine. Even though the economy goes into recession people will still consume these products.

They currently have two stores with plans to extend to 25 stores in two years.

Min Bahadur Gurung, however, thinks Nepalis tend to follow the herd and urges investors to think thrice before investing in any industry, big or small, retail or manufacturing. “There was a time when people herded into carpet business, then to garments, pashmina, and even taxis. But nothing turned out to be viable to anybody.

Similarly, opening malls and departmental stores does not guarantee profitability. If a person’s investment goes bad, it sends ripple effect across other sectors as well,” he stresses. For Gurung, creating employment is important besides running his business. Due to this very reason, he wants to open hundreds of stores across the country and wants to generate employment for as many people as possible. “And all this is possible if we as a country remain honest and hardworking,” he adds.

Consumer Spending

Along with population growth, purchasing power of the Nepali consumers is also growing thanks to remittances and growth of financial institutions. Migration from rural areas to the urban towns, thus propelling some sort of domestic tourism, has also been fuelling the shopping spree at malls, supermarkets, and departmental stores. Binod Tuladhar thinks the growth in population, internal migration and remittances have fuelled growth in the retail sector.

“Although the economy went through tough times, it has been surprising to witness the inflow of customers at retail centers. It is thus difficult to deny that the purchasing power of people has not increased because people are spending,” he says. “Of course economic growth had been sluggish but people are spending. Even my store’s sales have increased by 70-80 percent this year as compared to last year.”

Recalling a chance meeting with about 15-16 retail and manufacturing business people, Tuladhar says the participants admitted that even though the economy was going through hard times, their sales were increasing and profits had been realized.

Min Bhadhaur Gurung too agrees that consumer spending has gone up in recent years as daily inflow of customers in his supermarket has grown to about 30,000 – 40,000. “It doesn’t mean all of them buy. Some come with their family and friends just to hang out. But Dr. Pandey adds that the belief that inflowing people at malls and shopping centers are not only window shoppers and wanderers is mistaken. “The rush at the cash counters at Bhatbhateni and other supermarkets and malls confirms that consumers indeed prefer to shop at such places,” he explains.

In the same line, Prachanda Man Shrestha, CEO of Nepal Tourism Board, says, “Some years ago, many Nepalis did not even have the purchasing power to fulfill their minimum requirements. But due to the increase in remittance, people suddenly have more money at their disposal. With the malls, they also have places to splurge on their cash. They want to spend on items that they didn’t own before and it is the main reason behind the retail boom.” He also adds that people migrating from rural to urban areas are also heavily spending money received through remittances.

Duty-Free Zone?

As free-trade analysts have long been arguing, making Nepal a duty-free zone can be some sort of a breakthrough. Duty-free zone is a certain territory of a country where national taxes and duties do not apply. These zones are specially found in international region, airports, sea ports, and onboard passenger ships. The concept is not as new as few of our Asian counterparts have already applied this very model to reignite their once stagnated economies. Countries such as Singapore, Malaysia, Hong Kong and Dubai have declared specific regions of their countries as duty-free zones, which has resulted into tourist inflows into these regions for shopping and more government revenues have been collected. It is true that Nepal’s attraction lies in its natural beauty and geographic variation. Besides that everything is secondary for tourism. However, even though the duty-free concept is only secondary to attract tourists in, if this could be developed into primary attraction, through duty cuts and other innovative p olicies, it can increase tourist spending thus increasing the volume of income in the economy.

The idea of duty-free zone has been discussed far and wide. And Nepal’s government is totally against it. Rather than employing effective policies to check leakages and spillovers, the government entirely shut down the duty-free shops at Tribhuwan International Airport, which, according to an insider who requested anonymity, will cost the government roughly $200,000 per year. Many developing nations sell large number of their homemade items through their duty-free markets. For example baskets made of willow in Senegal, handmade toys in Israel, unset jade for jeweler in Taiwan, records and tapes in Trinidad and Tobago, coral jewellery in Barbados, all are promoted and sold through duty-free zones with the condition that the items must be grown, manufactured, or produced in a designated country and the shoppers must have bought it there. This policy has helped domestic industries and even the locals have benefited from the cheap price offered by duty free zones.

However, Nepal does not have such policy as the existing duty-free shops only put up things like foreign liquor, cigarettes, branded watches, perfumes and cosmetics rather than homegrown and homemade items. The subsequent change in government policies with the ascent of subsequent parties to the power has been the major roadblock for retail business, whether it be about the concept of duty-free zones or import duties. “We could import things from China and could offer them to foreigners in cheap prices but infrastructure poses the hurdle. It takes 10 days to reach consignments to tatopani from their origin but it takes more than a month to bring them to Kathmandu from tatopani. Similar is the case with imports from India. So if the government pays little attention into these hassles and if Nepal could be developed into a transit point between India and China, there is so much trade potential,” adds C.N. Poudel, Manager-Operation, Saleways Department Store.

In the current globalised economy, traditional duty-free shops do not hold competitive advantage. To insulate our duty free shops from two gigantic neighbours, we should emphasise on selling indigenous products such as handicraft, thanka, artifacts, gems, traditional weapons, domestic liquor and tobacco products. This will help locals who produce these goods and serve customers with a unique line of products. Moreover, sincewe cannot export all our product to European and North American markets, and the surplus neither have proper market nor can compete in Chinese and Indian markets, experts believe that setting up duty-free zones can ensure proper market for local products and an image of Nepal being a shopping destination can be established.

According to Mani Prasad Dahal, Senior Manager at the research firm ACNelson Nepal Pvt. Ltd., local products like handicrafts and thankas don’t have good scope in the local market. Thus setting up duty-free zones can promote art and identity of Nepal in the outside world. Since these items don’t fall in the requirement of tourists, they don’t necessarily buy them. Exempting duties would minimize the price of these goods, thus influencing a tourist’s decision to go for them. “So duty free zones would be like cherries on top of the cakes for them. But it is not to say that basic products should also be exempted from duties,” Dahal clarifies.

Prachanda Man Shrestha also perceives thescope of promoting indigenous products through duty-free zones but he sees a catch. “There are so many shops selling handicrafts and artifacts and you have no parameter to determine what’s made in Nepal and what’s not. We don’t have any mechanism to authenticate the true from the fake, so in absence of such a parameter, it would be hard for us to lay out things at duty-free markets calling them homemade,” he says. However, Shrestha believes that tourist spending will have a big impact on the economy provided we serve them genuine products and services. He thinks that for the tourists already in the country, ‘duty-free’ could be a psychological push to make them shop and for us to earn dollars. But, for that two condition should be fulfiled: first, duty-free signifies no tax on goods; second, the products sold in duty-free shops must be genuine if not cheaper. “These factors can motivate tourists to spend money on our domestic products,” he adds.

Sanjiv Keshava says that since import duties are already lower in Nepal in comparison to many developing countries, Nepal could be turned into duty-free country. He thinks that it would make more sense to make the whole country a duty-free zone rather than a particular area. He believes that if a certain region is made duty-free then there is a greater chance for leakages. “Make entire Nepal a duty-free zone, make it a regional shopping destination and things will automatically fall right in places,” he adheres.

Binod Tuladhar has a case to mention here. “There were plans to make Bhaktapur a duty-free zone but plans remained just plans. But I am optimistic about the present government as I can sense they have economic vision,” he adds.

The benefit of duty-free zone can be traced back to the post cold-war West Germany after partition from the East Germany. The then acting chancellor, to stimulate the staggering economy, turned a few places into duty-free zones, which proved to be a huge success.

In Chile, about a decade ago, a duty-free car zone was set between the Pacific Ocean and the Bolivian border. The zone sold as many as 150,000 used cars annually, mostly made in Japan, bringing job opportunities and development in a country hit by the dictatorial rule of ex-dictator Augusto Pinochet. The country further planned to move ahead to become the gateway to South America for Asia-Pacific countries making an impression of an international trading hub, attracting job seekers and entrepreneurs to Chile from Peru, Bolivia and as far away as Pakistan. Similarly, countries like Malaysia, Singapore, China, Thailand and Philippines have hugely benefited from similar policies.

But looking at lax government policies, it reminds a quote from a western economist: “It will be too late before Nepal realizes its true potential.”

Shopping Tourism

Nestled between two rapidly growing economies with their own manufacturing units buzzing, experts believe that it is not feasible to make Nepal a regional shopping destination to attract tourists. It used to be such a destination more than a decade ago, when regional shoppers from China, India and other neighboring countries would flock into Nepal to benefit from its liberal economic policies, which made foreign imports much cheaper here. But that is a lost case now. “ Nepal can’t be modeled into a regional shopping destination now. It’s not possible given the economic shift of our neighbours. If a foreigner thinks about his next holiday destination coupled with shopping and leisure activities, Nepal doesn’t appear anywhere on his list. So it’s better we talk about something else,” says Prachanda Man Shrestha. If we analyze the tourism board’s data on major tourist activities, shopping lies much lower in the priority list of tourists. Shrestha says shopping is not primary factor that draws tourists in Nepal but it could be built into secondary element to retain them back for a couple more days or weeks. “If we develop proper retail shops and duty-free outlets targeted chiefly at them, we may hold them back and earn more dollars in the meanwhile,” he adds.

But Min Bahadur Gurung believes that there is a huge potential in making Nepal a regional shopping destination. According to him, being a least developed country, our labour cost is cheaper than other developing countries. “The minimum wage is Rs 4,600 if someone works for eight hours. This rate is much higher in India, Dubai and Singapore. Nepal also has a pleasant weather—we don’t really need heating and cooling in several locations, which cuts down our overhead in power. So, if we can leverage our cheap labor and favourable climatic conditions, there is no way why we can’t develop Nepal into a regional shopping destination,” he says.

Binod Tuladharalso sees possibility of developing retail industry to promote tourism. He says, “Fifteen to twenty years ago, there was nothing in Dubai. But look at it now—it has almost become number one shopping destination for tourists.” He says that like Nepal, Dubai too is not a manufacturing hub. “It simply acts as a middleman, buying and selling things between countries while keeping its economy vibrant all along the way,” he adds. Nepal can also follow similar model but in a smaller scale and for high-value-small-volume commodities. However, it all depends on government policies.

Challenges

Even though duty free zone is beneficial for the country there are few challenges of its own. With the revenue oriented new budget it seems that the concept would not be materialized anytime soon. According to Mani Prasad Dahal, there lies a challenge ahead for duty free policy. Lifting duty is not new as many countries have taken similar step to certain extent. Few duty free zones that existed in the past had one target group while its beneficiaries were someone else. The good example is the duty free zone at Tribhuwan International Airport, which is closed because of the similar reason. According to Raja Ratna Tuladhar there have been many interactions on duty-free zone between the government and the private sector players in the last five years especially on the issues of alcohol. He says it is difficult for him to predict the benefits of duty-free zone and the problems in its implementation. He further states that counterfeit goods that get in from China, Thailand, India and Singapore, minimizes the prospects of duty free retail in Nepal.

Terms

Shopping Mall

Collection of independent retail stores, services, and parking areas constructed and maintained by a management firm as a unit. The next generation of shopping malls, the large regional centre sited in a vast sea of parking lots, bears little resemblance to its small, arcaded ancestors.

Mart

A trading center or a place where goods are sold; a store.

Supermarket

A self-service store offering a wide variety of food and household merchandise, organized into departments. It is larger in size and has a wider selection than a traditional grocery store and it is smaller than a hypermarket or superstore.

Department Store

A retail establishment which specializes in selling a wide range of products without a single predominant merchandise line.

Hypermarket

A large retail facility that combines a supermarket and a department store, which carries an enormous range of products under one roof, including full lines of groceries and general merchandise.

Binod Tuladhar says that as the government is focusing more on collecting tax, there is big doubt about duty-free idea being implemented here. The government has been trying to implement this since last 14 years but to no avail. Sanjiv Keshava reckons that duty-free concept to some extent can benefit the tourism industry but it should also be backed by infrastructure development. “With the natural beauty and adventure tourism, duty free shops will augment value to tourist experience in Nepal,” says Keshava.

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Nepal as a duty-free zone

What tourists say about nepal being a duty-free zone, regional shopping destination and their rational behind shopping in Nepal?

Things are already so cheap here compared to America that even if Nepal didn’t become a duty-free zone I don’t think it would hurt tourism or shopping at all. However, with no taxes on items, I certainly think it would improve the flow of tourists. People may be more inclined to jump the open border between Nepal and India if they knew they could get stuff really cheap, as well as buy more, and the same goes for China.

Branded Items — I don’t really care for branded items, even at my home in America. Only things I buy branded are medicine and electronics. So if I was in need for either of these, I would definitely go to branded retail outlets.

Retail Centers — It’s great having the convenience of home here in Kathmandu. I go to supermarket maybe every other day for my daily needs. Before coming here, I packed all my daily necessary items, such as toilet paper, Q-tips, pens; but I can get it all here very easily and it is very nice. I like being able to do one-stop shopping as it saves time and energy. And if people know that they can get these items in Kathmandu, they will buy it here instead of bringing their own, which is good for the Nepali economy.

Souvenirs - I don’t think anybody goes to the malls to get souvenirs. Although I have been tempted to go there to get a Avril Lavigne shirt as a joke.

Regional Shopping Hub — I think Nepal could be turned into regional shopping destination. People come from all over with the specific goal such as trekking and shopping for cheap and authentic Nepali ethnic items. And I feel that if Nepal stopped outsourcing their souvenirs to nations with cheaper productions costs, the authenticity would boost sales, however without outsourcing, the cost of such items will go up, but the items should still be so relatively cheap in comparison to the cost in Western nations that it should still be a fairly profitable venture.

Rational behind buying goods in Nepal — Can I get it anywhere else? If I could buy it somewhere else, is it cheaper here in Nepal or elsewhere?  Would it make a good gift?  Will I or the person I am buying it for actually use it?

Interested to buy when shopping — When shopping here in Nepal, I go for the Nepali, Hindu or Buddhist authentic items. Or just something that would be so ridiculously expensive in America but quite reasonable here, such as a bottle of Blue Label Johnny Walker, or a tailored suit.

Nepali retail malls in terms of international standards – I don’t think so, specifically due to the lack of organization of the sales floor and the shelves of items and the amount of phony brand name items.

—Seth Ostrowski
Anchorage , Alaska, United States

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I don’t think Nepal being a duty-free zone will change things that much for me considering that things here are already very cheap compared to America. It’s difficult from my position because I am a homestay, but if I came here and only stayed at hotels then I think duty-free zones would make things cheaper and I would stay longer. However, I do think shopping will increase somewhat because of no tax, but again things are already so cheap I don’t know how much it will make a difference.

Retail centers — I haven’t once in my 2 month stay visited any big mall. Most of the things I want are tourist items that I can get in Thamel and for daily necessities I can easily get at the supermarket.

Branded Items — In terms of branded items; I buy it because I want the quality that comes with it. Here it seems as if everything is a knock-off, cheaper material, which is not worth buying. When I go shopping and decide upon a branded item, I choose that items knowing I am getting quality material. I believe that many items here are not original. However, I have not ventured much into the retail malls.

Regional Shopping Hub —I don’t know if Nepal can become a regional shopping Mecca so to speak. I think that many people though do come here to buy authentic Nepali items, so its definitely a possibility. I think the fact that once the political atmosphere calms down, it will bring more tourists. But in order for it to become a major shopping destination it needs to advertise. The mountains will always overshadow Nepal as a reason to visit.

Rational behind Shopping in Nepal — My rationale is if it’s a good price and would make a good souvenir. I want to make a good gift for a friend or family member, and I want it to be reasonably priced.

- Yoni Liebling
Philadelphia , Pennsylvania, United States

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I don’t really have a take on making Nepal a duty free-zone. Because I’m not here to shop; it doesn’t matter very much to me. It would be convenient in the airport, perhaps, but I think that no matter where you go there will be extra fees for tourists, whether or not the things you buy are duty-free.

As a tourist, I make an effort to skirt around unnecessary purchases so I don’t have to pay extra. Nevertheless, I’m always prepared with extra cash — just in case. No matter where you go you will always have to pay some sort of hidden fees.

I like to think that as a tourist I’m here to do more than just buy stuff, so I wouldn’t change my trip based on Nepal’s duty-free status.

Compared to prices in Canada, everything here is a lot cheaper. If you add taxes the price of an item usually turns out to be about regular, Canadian price. I don’t really think tourists deserve a discount — aren’t they here to spend money anyways?

Daily necessities - The malls and department stores really helped me with daily shopping. When you’re new to a country it is hard to figure out how to buy things, and when it is all laid out in front of you in a mall it is much easier to handle. I also feel like I can trust the packaging more than if I’m buying it on the street, and in terms of food, department stores are wonderful — my guide book provides grave warnings about eating food from the street, and I feel like the food in the department stores is a bit safer. That said, when I figure out how to do my shopping outside of the mega-stores I make a point to do it because I would rather support local business.

Souvenirs - I would never, ever buy souvenirs at a mall — there’s nothing in the malls that I can’t get in Canada.

Nepal Regional Shopping Hub — Perhaps Nepal could turn into a shopping destination, but I think there would have to be some sort of incentive. For example, if you can buy things here that you can buy in Canada, the price would have to be cheaper here to make me want to travel to Nepal for shopping.

Rational behind Shopping — Depends what the goods are — usually I am buying food because I’m hungry, or I’m buying clothes because it is cold. I’m not a big shopper. In fact, I really dislike shopping. I never buy trinkets, souvenirs or things I don’t need because I don’t want to carry all that junk around.

Stuff I need — mostly grocery items like food and shampoo. I will admit that I love buying the same kind of shampoo that I can get at home — it is great that the big stores have it!

Retail malls and their standards — I don’t really know what the rules are about international standards, but I would say that the malls I’ve been in match Canadian malls pretty well. They look the same, they’re just as clean, you can get all the same stuff — they even smell the same!

Chelsea Jones
Saskatchewan , Canada

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Nepal is already a very cheap country for the western foreigners. The money that tourists would save by not having to pay taxes is pretty insignificant compared to what it represents to the national income of Nepal. Since tourism is a big source of Nepali revenues, the number of tourists that would be encouraged to buy more because of duty free is very small compared to how much it would actually brings to Nepal in terms of revenue. I think it’s not worth it.

Tourists tend to buy a fixed amount of souvenirs (for example, they bring back x amount of gifts for x number of persons), they rarely have a budget of how much to spend. As said, most tourists consider that gifts here are very cheap, so they would not see the difference between a 900 rupees buy (tax free) or a 1000 rupees buy (with taxes).

Branded items — Branded items can be attractive to some tourists as they are very cheap in Nepal. However, most tourists coming to Nepal are looking for objects they could not find somewhere else or made in Nepal (pashmina, wool hats, traditional clothes).

Daily necessities – retail center just like Bhatbhateni supermarket is very useful for me as I can find many daily necessities. However, tourists only spending a couple days or weeks in Kathmandu, will find everything they need in regular supermarkets (food and hygiene products).

Souvenirs — I’ve been to United World Trade Center mall and I regularly visit Bhatbhateni supermarket and I could never find souvenirs there. Everything is made in China and the products sold can also be found in western countries. There is thus no point in buying anything there. Tourists, as said, are usually looking for unique souvenirs, hand made or made in Nepal (jewellery, wool hats, pashminas, cushions covers etc) since this is what Nepal is famous for in the outside world, rather than branded items.

Regional Shopping Destination — I don’t think that Nepal could be a regional shopping destination. China is already pretty huge in branded items, as is Thailand, but Nepal has its own domain in tourism. I think that building up more malls in Nepal and trying to modernize it would actually remove a lot of cachet and some tourists might actually give up the idea of visiting Nepal if it would become a major shopping destination as it maybe not different from anywhere else in Asia. Malls and supermarkets are very useful for locals and it is certainly a way of modernizing Nepal to build more malls. But I think that most tourists visit Nepal to escape this modernization.

Rational behind shopping in Nepal — I am looking for something cheap (cheaper than at home) and unique. I also like to bargain the price, so I don’t think that malls would attract tourists in that sense.

Interested to buy — I am interested in souvenirs that people would not be able to find at home— traditional stuff. So far, I have bought pashminas, wool hats, jewellery, traditional things and DVDs.

Nepali retail centers in terms of international standards — I think they are pretty good. Retail malls are a practical thing because you can find everything you want in one place. But I think it is more useful for locals. When shopping for clothes, they can also shop for furniture or dishes. United World Trade Center for example looks like the average mall in a western country and it is very convenient for the Nepalis themselves.

Virginie Gagnon
Montreal , Quebec, Canada

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