Sri Lanka’s Online Market Stats in Mobile Phones

Sri Lanka’s strength in the IT and Communication Industry  

Sri Lanka’s success in adopting IT and communication began with the adoption of the open economy in the later part of the 1970s and its integration into the global economy thereafter. Computer usage which was somewhat negligent in the 1980s started picking up in the 1990s as many private and public organizations started automating their systems. Today large sections of Sri Lanka’s commercial and public sectors use computers for a host of activities ranging from financial control to day to day word processing.

Another notable aspect is that the telecommunication system was also revolutionized. For instance telephones were upgraded from analogue to digital, satellite transmissions were installed and internal coverage was expanded. Another impressive result could be seen by the fact that the teledensity (the number of telephones per 100 people) of fixed telephones within a single decade jumped up five folds. This sector is the key ingredient for ecommerce and to sustain an economy in the global arena. This variable has been clearly understood by the Sri Lankan government and wide ranging reforms have led to some impressive results in the telecom industry.

The infrastructural developments allowed Sri Lanka to connect with the ‘information super highway’ where advanced information and communication technologies enhance the use of a variety of media products, entertainment and communication.

Sri Lanka’s global position

Sri Lanka is more capable of facing the difficulties it has in meeting the IT challenges than other developing nations. For instance the country has gone through decades of trade liberalization and is an open economy. The country also had spurts of high growth in the 90s even in line with the Asian Tigers of South East Asia. Furthermore the country’s industries also increasingly became export oriented.

Sri Lanka’s export earnings from IT reached approximately $900 million in 2019. Such a development mean that Sri Lanka’s IT sector grew at a six percent average from that of 2018. The government meanwhile is targeting $5 billion in exports from the sector by year 2022 creating 200,000 jobs in the process.

Sri Lanka’s IT sector has also responded well to the Covid-19 pandemic. While the rest of the island’s economic activities were in lock down as a result of the virus Sri Lanka’s tech companies continued to service their clients. Sri Lankan tech has adapted to the crisis by efficiently moving to remote working and tech teams have put in additional hours to the normal routine to the satisfaction of their global clients.

Sri Lanka’s E-commerce Industry and Its Relationship with the Rural Sector   

One clear advantage is that Sri Lanka’s population is highly literate standing at 2011 at 90.8%, which was the highest in South Asia. A high literacy rate allows the population to make use of technology which is a key requirement in the development of the communication industry. Mean while the percent of people literate in ITC increased dramatically from 4% in 2004 to 30% by the end of 2009. 

Traditional shopping outlets are also moving into the ecommerce stream to compliment their traditional business. Odel is a relevant example. Odel has made such a move to reach more rural and urban shoppers online.

In recent years online ecommerce sits such as Kapruka and Takas.lk have increased their market size in comparison to traditional outlets. Such an achievement has been made to a certain extent by the use of cloud based platforms such as 99Retail Street, which allows companies to reach poor rural pockets.

According to e-eCommerce industry experts in Sri Lanka , the UVA province, aside from the Western province is the highest user of e-commerce. These ideas were conveyed at the seminar ‘Consumer Rights in The Digital Age’ organized by the Institute of Policy Studies (IPS).

“There are no retailers setting up mega malls there, so they buy online,” said  experts.

He also mentioned that though investors of digital services believe that returns of investment could only be made at the Western Province the gap with the Western province and the rural areas is narrowing rapidly. Yet he gave a word of caution saying that foreign brands are more in demand in rural areas.

“Every one knows eBay and Amazon, because they have invested substantially on their brands. Even a local email backed by a telco is finding it hard to break through.”

There are also some other minor problems such as attitude problems with regard to the intent. Mostly with the older people, the internet is regarded as not for them. There are also technical problems such as difficulties in obtaining computer maintenance service, user support services ect in the village.