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Mega Trends in Nepal, Forecast to 2025

  • Report

  • 68 Pages
  • January 2019
  • Region: Nepal
  • Frost & Sullivan
  • ID: 4745487

Analysis of Future Trends and Business Growth Opportunities

Nepal entered a phase of high economic growth of 7.5% in 2016-17, recovering from low economic growth post-earthquake and trade disruption. Nepal is undergoing a significant economic transformation, uncovering investment opportunities across a wide array of sectors. The country seeks to sustain the impressive growth rate through increased momentum in post-earthquake reconstruction and significant spending on large infrastructure projects. Infrastructure investment will be a lucrative ground for private sector investment given the government focus on adopting Public Private Partnership (PPP) model for large infrastructure projects including hydropower, smart cities, new towns, railways and roadways.

With Internet penetration reaching 63% in January 2018 as stated by a Nepal Telecom (NTC) report, Internet connectivity is available to a larger mass, which makes it feasible for online services to gain momentum. In fact, by 2025, compared to its neighboring countries - India and China, the penetration of Internet and mobile connections are predicted to be much higher as shown below. According to the International Telecommunication Union (ITU), Nepal is expected to be a forerunner in Internet penetration at 79% with China, following at a 75% penetration rate.

Similarly, Nepal is projected to lead with 124% mobile connection penetration, while India’s mobile connected penetration is predicted at a mere 98% in 2025, thus making Nepal a ‘Mobile-first’ Country by 2025. Every 1 in 2 Nepalese have access to the internet today against every 1 in 3 Indians and every 1 in 3 mobile phone users in Nepal uses a smartphone now.

As the global trend toward smart cities gains rampant pace, Nepal also follows suit. With the intention of addressing the acute necessity for adequate urban infrastructure and attaining sustainable development, smart city initiatives are being put in motion. There has been a steady rise in the number of entrepreneurial ventures or startups in Nepal, thanks to increasing Internet penetration. In the process of digitization, some of the prominent revenue garnering sectors such as agriculture and tourism have been deploying mobile applications to improve productivity and efficiency. The country has also witnessed the significant digital transformation in the space of transportation, governance, education and even agriculture.

Research Scope

This study uncovers the major trends "Mega Trends" that will impact the future development of the nation. While hydropower and tourism have traditionally been the key sectors receiving Foreign Direct Investment, the manufacturing and services sectors’ performance has been improving steadily recently leading to increased investment. This study identifies investment opportunities in sectors besides hydropower such as solar power, FMCG, real estate, smart city, and information and communication technology among others. This study also provides case studies of successful businesses from regions like India and Africa that can be redone in this region. Finally, this study also provides recommendations exclusively tailored for Nepal for the existing as well as new businesses.

Table of Contents

1. Executive Summary
  • Introduction to the Study
  • Key Findings

2. Research Scope and Background
  • Research Scope
  • Research Background

3. Mega Trend 1 - Connectivity and Convergence
  • Nepal - A ‘Mobile-first’ Country
  • Future Digital Transformation in Nepal
  • 4G Rollout in Nepal
  • BPO Business Trends in Nepal

4. Mega Trend 2 - Bricks and Clicks
  • Online Retail - The Next Big Thing in Nepal
  • Successful Participants in Nepal’s Online Retail
  • Start-up Culture in Nepal
  • Start-up Categories in Nepal

5. Mega Trend 3 - Urbanization: “City as a Customer”
  • Nepal to Get 8 Mega Cities by 2025
  • Potential Opportunities Identified Within Mega City Development Projects

6. Mega Trend 4 - Social Trends
  • Social Trends in Nepal
  • The Gen Z and Gen Y Opportunity for Nepal
  • Case Studies of Companies Catering to Gen Z and Gen Y Customers

7. Mega Trend 5 - Future of Energy
  • Solar Power in Nepal

8. Mega Trend 6 - Future Infrastructure Projects
  • China's Contribution to Nepal’s Infrastructural Development
  • AIIB Huge Investments Toward Nepal Infrastructural Project

9. Mega Trend 7 - Future Economic Trends
  • GDP Growth Outlook
  • Province-level Macroeconomic Outlook
  • Migration and Remittances
  • Evaluating the Structure of the Economy
  • Travel and Tourism’s Economic Contribution

10. Investment Opportunities Across Key Sectors of Nepal
  • Growth of FMCG Sector in Nepal
  • Case Study - Wai Wai Noddles Ventures into Foodservice Operations with Wai Wai City
  • Case Study - Nestle India is Looking to Diversify into New Segments Like Premium Coffee Business, Pet Care, Skin Health, and Cereals
  • Case Study - Tata Global Beverages Ltd and Starbucks Coffee Company Introduce Tea Retail in Indian Market
  • Case Study - Growth Story of Croma: India’s First Large Format Specialist Retail Chain for Consumer Electronics and Durables
  • Financial Services Sector in Nepal
  • Case Study - Collaborative Business Models Between African Financial Institutes and Telecom Operators
  • CG Money Dominating the Remittance Service in Nepal
  • Future Opportunities in Mobile Financial Services in Nepal
  • Hospitality Sector in Nepal
  • Airports Development in Nepal
  • Real Estate Trends in Nepal
  • Smart Cities in Nepal
  • Case Study - Tata Projects Limited Has Created a Dedicated Division to Tap the Opportunities Expected to Be Generated by the Smart Cities Initiatives in India

11. Leadership Case Studies of Regional Family Business for Nepalese Business Houses
  • Case Study - Tata Group Non-industrial Businesses
  • Case Study - Mahindra Group Businesses
  • Learning for Businesses from Tata Group and Mahindra Group Businesses for Nepalese Business Houses

12. Recommendations for National and International Business Houses Investing in Nepal
  • Recommendation for Growth in FMCG, Real Estate, and Hospitality Sector in Nepal - Are you Future Ready?
  • Recommendation for Growth in Retail, Cement, and Finance Sector in Nepal - Are you Ready to Rise?
  • Recommendation for New Business Ventures in Nepal
  • Legal Disclaimer

13. Appendix
  • List of Exhibits

Companies Mentioned (Partial List)

A selection of companies mentioned in this report includes, but is not limited to:

  • AIIB
  • CG Money
  • Croma
  • Mahindra Group
  • Nestle India
  • Starbucks Coffee Company
  • Tata Global Beverages Ltd
  • Tata Projects Limited
  • Wai Wai City
  • Wai Wai Noddles