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E-commerce in Sri Lanka

E-commerce in Sri Lanka

Apr 11 2023


In recent years, e-commerce has been on the rise in Sri Lanka, with more and more organisations shifting their focus to the online market. The COVID-19 pandemic has also accelerated the growth of e-commerce in the country, as people have increasingly turned to online shopping to avoid physical stores.

At present, e-commerce accounts for a small but growing percentage of retail sales in Sri Lanka, with the e-commerce market in Sri Lanka being projected to grow by 15.59% (2023-2027). However, the potential for growth in the e-commerce sector is immense, and businesses that invest in e-commerce now will have a significant advantage over those that do not.

Why E-commerce is Important in Sri Lanka

The rise of e-commerce in Sri Lanka can be attributed to several factors. Firstly, the country has a young and tech-savvy population, with a high percentage of internet and smartphone users. This means that there is a large potential customer base for e-commerce businesses.

Secondly, the logistics infrastructure in Sri Lanka has improved significantly in recent years, with better transportation networks and more efficient delivery services. This has made it easier for e-commerce businesses to operate in the country.

Thirdly, the Sri Lankan government has taken steps to encourage e-commerce, by reducing taxes on e-commerce transactions and promoting digital payments. This has created a favourable environment for businesses to invest in e-commerce.

The Current Scope of E-commerce In Sri Lanka

As per the insights of experts the current e-commerce market is in continuous progression and is expected to reach US dollars 665.0 million this year. Furthermore, it accounts for 24.3% of the total commerce industry in the country and is expected to increase further in the years to come. Also, experts state that the industry’s expected compound annual growth rate for the next four years (CAGR 2023-2027) will be 13.5%, resulting in a projected market volume of US$1,104.5 million by 2027.

This is a promising situation for digital entrepreneurs of new and old. Since, they will have ample opportunities to work and new avenues to explore in the many years to come. This will help them curate long-term stratagems that would prove efficacious in the long-run. Moreover, it will also allow them to upscale growth through the integration of new technologies that will be introduced in the forthcoming years.

Challenges Faced by E-commerce Businesses in Sri Lanka

Despite the potential for growth in the e-commerce sector in Sri Lanka, there are several challenges that businesses face. Firstly, there is a lack of awareness and trust in e-commerce among Sri Lankan consumers. Many people still prefer to shop at physical stores, and are hesitant to make online purchases.

Secondly, there is a lack of regulatory framework for e-commerce in Sri Lanka. This has led to issues such as the sale of counterfeit products and the violation of consumer rights.

Finally, there is a shortage of skilled workers in the e-commerce sector, particularly in areas such as website design, online marketing, and logistics management.

How to Succeed in E-commerce in Sri Lanka

To succeed in e-commerce in Sri Lanka, companies need to overcome the challenges mentioned above and adopt a customer-centric approach. This involves creating a user-friendly website, offering competitive pricing, and providing excellent customer service.

Enterprises should also focus on building trust with their customers, through measures such as offering secure payment options and providing transparent product information.

In addition, businesses should invest in digital marketing to increase their visibility and reach more potential customers. This can include strategies such as search engine optimisation, social media marketing, and email marketing.

Finally, firms should keep abreast of the latest trends and innovations in e-commerce, such as mobile commerce and artificial intelligence. By staying ahead of the curve, businesses can gain a competitive edge and position themselves for long-term success in the e-commerce sector.


E-commerce in Sri Lanka is still in its early stages, but the potential for growth is immense. By overcoming the challenges and adopting a customer-centric approach, businesses can succeed in this burgeoning sector and gain competitive advantage. With the right strategy and execution, e-commerce can be the future of online business in Sri Lanka.

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