Anything with a total international value approaching US$ 400 billion in a globalised economy is bound to have an impact in even the remotest corners of the world.

In the last five years the distribution, marketing, sale and delivery of goods and services by electronic means have grown exponentially with far-reaching impact on the economy.

And rather than make newspapers extinct, the dot com revolution has pumped advertising dollars into the print media. Even in India full-page newspaper ads by Internet start-ups have become a regular feature and these have grossed 15 million dollars in the first four months of this year alone.

The growth in the IT sector shows no signs of abating, and it is estimated that the value of e-commerce will grow to US$1,300 billion by 2002. By the year 2003, up to 30 percent of the world economy will be traded online.

The Nepali economy may not be able to take full advantage of this growth for some time, but a beginning has already been made in the tourism and information service industries. Holiday and trek planning through e-mail exchanges are already quite common, although the industry has not yet graduated to online booking, confirmation, and real-time payments.
The information service companies deliver their "virtual goods" services electronically. Transcriptions, software development and GIS mapping are areas Nepali companies are active in .Exposure to the international economy is forcing Nepali companies to have an Internet presence. Many brick and mortar Nepali companies now have a homepage although most have not begun to trade online.
Among those that do, Pasal.com and Dhukuti.com are credit card enabled sites. They are geared towards the foreign market, and sell traditional goods like carpets and pashmina online.

Munchahouse.com, the well-known Kathmandu general goods store, went online two months ago and specialises in gifts that the Nepali diaspora can send to people back home. They are already averaging one order a day, and total page views in June was 10,000.

"We\'ve had to change many items that we used to sell traditionally. For example, we have added flowers and paintings. And we plan to go into jewellery," says Amit Tuladhar who looks after the internet part of the family business.

Nepalshop.com is another web site that calls you back to confirm an online booking. Cyberpasal.com is also getting operational soon. But the payment mechanism is still traditional with these sites: you pay when you receive the goods in hard cash.

Vertical portals are also few. Nepal handicraft association (www.nepalhandicraft.com) set up its web site, providing links to its members. Nepal Tourism board (www.wel-comenepal.com) has also tried to create a tourism portal, but both are nothing more than an electronic edition of their printed brochures.

The Trade Promotion Centre (www.tpc.org.np) has tried to bring more by integrating database in the web site. "There are possibilities," says Lochan Lal Amatya, president of Computer Association of Nepal (CAN). "The Nepali information technology sector is at par with its counterpart in developed countries, and thus we have a level playing field,"

Information services sector is now also in a position to facilitate electronic commerce, as the infrastructure is already present. But, there are still many problems. Government regulations for both the Business to Consumer (B2C) and B2B e-commerce are non-existent, electronic transactions are not recognised, banks do not accept online payments, and the average Nepali does not have a credit card. Then there are logistical problems such as delivery since Kathmandu streets do not have names and houses are not numbered.

For B2C commerce to grow in Nepal, the price of computers and internet access have to come down to be affordable to the Nepali middle class. The traditional perception of doing business must also change.

Says Deepesh Pradhan of Yomari.com: "None of the traditional Nepali companies have prices listed on their web site. How can online commerce grow in this way?" People will simply not be interested, if they have to wait or go to the corner shop to find the price.

In the B2B arena, it is the Nepali IT companies that are furthest ahead. But they have their own set of problems. Export regulations that require proof of export is the major hurdle. Bijendra Shrestha of InfoNet Nepal, an export-oriented IT company, says: "We have traditional purchase orders, we use traditional banking channels, but we only use the Internet for export of goods. Banks are not sure how they should handle it."

Electronic payments, electronic orders, and electronic delivery of services are major incentives for international companies, but these tools cannot be used in Nepal. Neither can local companies use the Internet to order goods and services from abroad.

Until such a time as the government wakes up to virtual reality and changes its regulations to bring them in line, Nepal\'s B2C commerce will not be able to take off.