Identifies common practices used in selling in this market, including sales material that needs to be in the local language.
When selling in the local market, U.S. businesses should consider a local partner’s financial soundness, sales capabilities, and relationships with both government officials and industry associations. Foreign companies often deal directly with buyers, rather than invest in promotional marketing. There are no specific packaging requirements, and for most products, English may be used for both sales and labeling purposes. American products are often more expensive than products from neighboring countries but can compete on the basis of higher product quality and after sales service.
For product introduction, U.S. companies can visit potential buyers and make presentations or send product catalogs, brochures, or other materials directly to the target customers via email, fax, post, or courier. Alternatively, companies planning to launch consumer products frequently use exhibitions, trade shows, trade missions, catalog and video shows, and advertising in newspapers, radio, and television for market introduction and brand recognition. For companies and products that already have a presence in the Nepali market, participating in trade shows through a local agent/distributor can be an effective way to introduce new products and promote brand recognition. As indicated previously, the Embassy’s Economic section, through its “Partner Post” arrangement with the Foreign Commercial Service – Delhi, can provide commercial services, such as identifying potential local partners/distributors for American companies looking to sell their products in the Nepali market.
Trade Promotion & Advertising
Newspapers, radio, and television are the main advertising media used for trade promotion. Television reaches a limited portion of Nepali consumers – primarily the more affluent urban population – but newspapers and radio reach most parts of the country. The best choice for advertising media will thus depend on the target group. Television advertising is the most appropriate means to reach the urban middle and upper classes. For basic consumer products, advertising in newspapers and via radio is more appropriate. Advertising costs are lower for newspapers and radio than for television. Since the size of the market is so small, there are no Business Service Provider (BSP), Featured U.S. Exporters (FUSE), or Single Company Promotion (SCP) services available in Nepal. Names and addresses of major newspapers, radio and television stations, and cable television companies are set out below. Inclusion in this list does not constitute U.S. government endorsement.
The Rising Nepal (English-language daily, government-owned)
P.O. Box 23
Tel: 977-1-4255730, 4227493
The Kathmandu Post (English-language daily)
Central Business Park, Thapathali
PO BOX 8559
Republica (English-language daily) Nepal Republic Media (P) Ltd
JDA Complex, Bag Durbar
P.O. Box 19300
Tel: 977-1-4265100, 977-1-4261808
The Himalayan Times (English-language daily)
P.O. Box: 11651
Anam Nagar, Kathmandu, Nepal
Tel: 977-1-4770504 / 4771489
Singha Durbar P.O. Box 634
Tel: 977-1-4211896 / 4241921 / 4223910 / 4243569
FAX: 977-1-4211952 / 4221951
Singha Durbar P.O. Box 3826
Email: firstname.lastname@example.org, http://ntvnews.org.np/
Space Time Network Pvt. Ltd.
Business Development Division Satellite Television Service
Shantinagar, Kathmandu, Nepal
Subisu Cable Net Pvt. Ltd
GPO Box 6626
Tel: 977-1-4429616 / 4429617
Fax: 977-1-4430572 / 4240165
Pricing formulas are based on the availability of similar products, the level of demand for the product in the local market, and total costs required to bring the product to market. Before selecting a pricing strategy, the exporter should obtain as much information as possible from local agents, market research, potential customers, and competitors. Exporters should factor in applicable tariffs and taxes, which are levied on all imported products. Examples include customs tariffs ranging from five percent (for certain agricultural products) to 80 percent (for four-wheel vehicles); value-added tax (VAT) of 13 percent; excise duties, registration fees and a local development tax of 1.5 percent. For imports of private vehicles total taxes and duties can add up to 260% of the original value of the car. Import tariffs and duties for other items are generally lower than this rate. Interested businesses can request hard copies of the complete tariff schedule directly from Nepal’s Department of Customs (https://www.customs.gov.np/page/custom-tariff-new).
Imported goods are priced higher than locally produced goods. Prices of imported goods reflect transportation costs and other mark-ups. Indian manufactured goods, when available, are cheaper than imports from more distant countries. When determining a price for U.S. products, the exporter should consider potential competition from India, which has an open border with Nepal. Chinese products – mainly consumer goods such as appliances, shoes, and textiles – are imported via sea or land. Products from the European Union, Japan, South Korea, and Taiwan are also popular and help determine the local price for goods and services. Profits in excess of 20 percent are considered profiteering and violate Nepal’s laws against black marketing. Enforcement of this law is erratic.
Sales Service/Customer Support
After-sales service and product guarantees are very important for customers, especially for durable products. Given long shipping times to Nepal, concerns about after-sales service and availability of spare parts affect consumers’ choice of product. It is advisable to make arrangements with a local agent/distributor for the provision of reliable customer service and support. Providing local after-sales services is mandatory for any supplies under government procurement. Foreign companies selling vehicles, high-value machinery items, electrical appliances, and electronics in Nepal generally have arrangements in place for such services with their local agents or distributors. Often the parent company provides the technical assistance and machinery for such services, while the local company provides the actual services.
Local Professional Services
Use of a local attorney for preparing required documents can limit unnecessary delays in the process of finalizing business contracts with trading partners and other local agents. A list of local attorneys is available on the U.S. Embassy Kathmandu website. In early 2018, Embassy Kathmandu became a “Partner Post” of the U.S. Foreign Commercial Service (FCS) in New Delhi. FCS India is responsible for commercial issues in India, Nepal, Sri Lanka, and Bangladesh and for assisting U.S. companies looking to export their products and services to these markets. A number of business services/programs, some fee-based, are provided through Embassy Kathmandu’s Political/Economic Section under this Partner Post arrangement, including commercial reports for U.S. businesses and connecting U.S. businesses with local companies of interest that could include buyers, agents, distributors, sales representatives, and other strategic business partners. Requests for these services can be directed to U.S. Export Assistance Centers or to the Commercial Service New Delhi office at: email@example.com. The Political/Economic Section of the U.S. Embassy can help provide links to companies for other professional services, such as market research agencies, advertising agencies, customs clearance houses, freight forwarding agencies, and transport companies.
Principal Business Associations
The Federation of Nepalese Chamber of Commerce and Industry (FNCCI) is the largest business association in Nepal. The Confederation of Nepalese Industries (CNI) and the Nepal Chamber of Commerce (NCC) are also important associations. Most industries have associations that are represented by FNCCI, CNI, or NCC. American companies can also contact the Nepal-USA Chamber of Commerce and Industry (NUSACCI).
Besides these traditional chambers of commerce, Nepal also has numerous business associations that might be of interest to American businesses looking to reach non-traditional or more niche markets. These include the Federation of Women Entrepreneurs Associations of Nepal, the Federation of Nepal Cottage and Small Industries, the Federation of Handicraft Associations of Nepal, and the Independent Power Producers Association of Nepal. Two impact investment funds are Business Oxygen and the Dolma Impact Fund.
Limitations on Selling U.S. Products and Services
There are no limitations aimed specifically at American products or services. Nepal’s FITTA reduces to nine the number of sectors in which foreign investment is restricted or prohibited.