Asks for water bottle
“Isn’t it 20?”
Still he buys.
Asks for cigarettes.
“15? Can get in 10”
Still he buys.
Can I have Silk Dairy milk?
“ok, give me one”
He does not care if he paid more or not.
I can go on and on giving the kind of examples. It’s sad that everyone is up to robbing everyone here. I have never seen this kind of market anywhere else. Shall I blame market? No. Market behaves per consumers. If some charge 25 for 20 rupees water or 15 or 10 rupees cigarettes, it’s because people are paying for. Question should be why anyone would pay higher price even when knowing is being charged more for nothing? 15 for 10 rupees cigarettes is like 50% more! how can one have no problem with that? It’s not like everyone sells in same price. There are always someone who trades per MRP…but then lazy butts don’t like to try few more shops.
“Jeudo nepali lie khoi kun marya jaat le thugna sakcha” I have heard. This is what it must be.
People here really don’t value their money, do they? Or say, youths here really don’t value money, do they?? It’s not about 5 rupees, it’s about letting anyone take your money for nothing and you cowardly letting it happen. Worst thing happens is, the muteness boosted a confidence of the shopkeeper to go for new price tag, eventually creating an inflation.
There are 3 Cr people in this country and this post won’t reach to all of them, but to you educated people, please don’t be that “Jeudo Nepali.” Learn to walk out of a shop that you know is quoting more than market price, even if the shopkeeper looks poor and “bichara.” Learn to argue on why being quoted more than MRP. Learn to convert Indian currency and ask why not at the conversion rate? Even if is asking 5 rupees extra, don’t go for the number but the percentage. Ask yourself if that justifies.
Please, don’t let people rob you. Robbing has been institutionalized here because of our “hyaa leave it” attitude. It’s not hard if we learn to love our money, value every penny, and above all develop a principle of not supporting wrong trend and method and instead fight against.
Smartphones are very expensive in Nepal – Here’s Why!
It is no news that the price of smartphones in Nepal is crazy. I mean, yes, we might be used to with expensive prices, but compare those prices to international ones, or even the neighbouring country for that matter, and you’ll know. When you allocate some budget to get a good phone, you check out reviews and stuff. And just when you think you can have the one, you have your heart set on, the price differs – by a lot! And it is, of course, common to accuse retailers here of extracting a large profit, but there are also quite a few reasons why smartphones are so expensive in Nepal.
1. Taxes, Taxes
The current fiscal year of Nepal brought quite a few changes in the Nepali tax policies. Prices of almost everything went up, including electronics and gadgets. Before this new tax policies, smartphone importers paid only 13% of tax. And on top of that, 40% of VAT was refunded to them at the end of the fiscal year. That made it a net total of 7.8% on taxes.
But with the new policy, the 40% VAT refund has been waived. And in addition to the 13% tax, another 5% of excise duty has been added, making it a net total of 18.65% on taxes alone! And that is enough to stir the prices of such phones and gadgets upwards. This, however, is only for smartphones. There are other policies for other electronics and automobiles.
2. Distribution Channels
The economy of the country is not strong enough to attract official retailers themselves. For example, we only have Samsung, Huawei and Xiaomi’s official presence in Nepal. But for other phones, they arrive through various distribution channels. There are agents, regional distributors, wholesalers, etc. before the products even make it to retailers. And with each part of the distribution channel nicking off some profit, it’s only natural that the prices go up.
How does it work? First, there’s the company, i.e. the brand itself. Then come the National Distributors (NDs), followed by Regional Distributors (RDs), Retailers and Mobile Stores. NDs import the smartphones for which, they pay a certain bank guarantee to the brand. This assurace financial safety to the company as well. The same thing happens with NDs and RDs. RDs are responsible for placement of phones to retailers, who, in turn, deal with mobile brands. Hence, this creates a long chain, where each party involved has a certain profit margin.
Also, NDs have their own team of sales promoters, who promote their products in mobile stores. Ever seen someone in the company mascot’s costume? Yeah…that’s them. They also have their own marketing team, sales officers and product team who help improve sales and marketing of a product. As for RDs, they possess local level knowledge of the market, and maintain good relation with retailers. Thus, from the company’s point of view, these parties are necessary link in the chain too. So, we can see why they are needed.
And if you ask why don’t the company’s bring the phones straight to retailers, here’s why:
3. Lack of proper e-commerce
The smartphone marketplace of Nepal, or any other small developing countries for that matter, differs a lot from international scenario. Many phone companies have a strong presence in e-commerce and sell their product online via sites like Amazon, BestBuy, GearBest, etc. And they even provide various discounts from time to time. Their online presence is so strong that they even have online exclusive brands!
For example, there are brands like Realme, which is an online exclusive brand internationally. Honor, is also an online exclusive brand but is slowly moving to offline as well. Samsung’s new phones, the M-series are also online exclusive. But, in Nepal, all of these three are sold offline. Because, the e-commerce platform is not very developed. There is lack of proper e-payment gateways, and most people hesitate to buy things online, for good reasons.
This leads to popularity of brick-and-mortar stores, which increases the expenditures of phone retailers. And that too, leads to an increase in pricing. If you compare the pricing of Honor phones in Nepal with international market, you’ll know!
4. Economies of Scale
If you are a little bit familiar with the Economics, then, you probably know the economies of scale – i.e. larger the quantity, lower the price. It applies almost anywhere – from printing stuff, to banquet halls and yes, smartphones. Since the economy of Nepal is not as strong, the number of phones sold in the country are a lot less than in others.
While smartphones ship by the millions in other countries, we play in thousands here, and only among hundreds for very expensive flagship ones. This affects the cost per unit of these products, hence, adding up more burden to their prices.
5. Everything is imported!
This is no surprise. Since almost all of what we use are imported, smartphones are the same. What I mean is, there are no in-house manufacturing plants to make smartphones, or even assembling houses to assemble components. Countries like China and India have their own manufacturing plants, so, they can price the phones accordingly.
When whole gadgets are imported instead of parts, the excise duties are considerably higher. Add the distribution channelling to it, and shipping costs, you get the Nepali prices for smartphones!
So, why are smartphones so expensive in Nepal? You have the answer.
A version of this article appears on GadgetByte Nepal. Do check the website for more tech-news and such.
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