Chapter 3: Marketing and Sales

3.1 Market Analysis:

3.1.1 Overview of the market: - According to a new report by Grand View
Research Inc., the market size of bags is expected to reach USD 67.9 billion
by 2025 increasing the annual growth rate of 5.4% over the forecast period
globally. https://medium.com/@latest_trends/handbag-industry-analysis-growth-rate-
trends-and-statistics-a188d83092c7 Bags have become the most important
accessory in the fashion world which are often used as completion pieces for
a both woman’s as well as men’s wardrobe. Either for working people,
students, housewives or travellers, everybody needs varieties of bags in
order to carry their essentials. So, by looking at the higher demand for bags
in local market of Biratnagar we have come up with this idea of setting up
“Madhuri Bag Bazar” store in Biratnagar and also selling the products online
through its own website in overall Nepal.
With the increasing education and technology, people’s interest in e-
commerce has grown. There are not many online based bag store especially
in Eastern Development Region (EDR) of Nepal. Online websites set up from
Kathmandu and from other places which provides bags to customer like
Nepbay.com, PasalNepal.com, Daraz.com, and Meroshopping.com etc. are
offering their services to this region but these stores are not specialized in just
selling bags. Those services are limited and are not being able to meet the
needs of local people of EDR as observed from the survey. Because of
unavailability of specialized e-commerce in this EDR, e-commerce industry is
lagging behind from moving rapidly ahead in this competitive market. So to
overcome this problem to some extent we came up with this idea and we think
our business will be fit in here and also can be a market leader of this region
for online bag store within a short span of time. For the long term strategic
plan, our vision is to capture overall Nepali market and easily provide different
varieties of bags to people as per their choice from all corners of the nation.
3.1.2 Market Trends: - The increasing social media influence on customers from
Facebook, Instagram and Twitter especially has made young adult
population go crazy for variety of bags they see on the internet. Social media
is mainly responsible for the propensity of potential customers towards the
 market for bags. The recent market trendy bags in Nepal are shoulder bags,
tote bags, cross body bags, clutch, traveler’s bags, croissant bags, canvas
and leather, woven leathers and handmade Nepali bags. Focusing on all the
recent trendy market demand of customers “Madhuri Bag Bazar” has
planned to be one of the best destination store to provide all type of bags for
people of Biratnagar and also for people of overall Nepal where customers
can easily order online. Market trends has been analyzed by conducting
PEST analysis which will describe about how political, economic, social and
technological factors will impact our business:

PEST Analysis

 Political Factors: Nepal is such a country which has always been represented
as one of the politically instable country because very often we have to face
strikes due to conflict between various political parties, chaos and sometimes
sealing of borders also. These all strikes and chaos will lead to problem in
supply of goods and products which in turn results scarcity of products,
disruption of business and delay in goods delivery for both online and physical
store. Overall, political issues can have major impact on ecommerce and its
growth as well. However recent constitution of Nepal has given positive hope
for all the Nepalese. To carry out any business without external burdens, a
stable political scenario is must. We have to carry out our business activities
by considering all the political issues that may come in between.
 Economic Factors: In this year 2020, not only Nepal but the whole world is
facing economic crisis because of the global outbreak of COVID-19
pandemic. According to Asian Development Bank, Nepal’s economy is
anticipated to grow 5.3% in fiscal year 2020 which is down from 7.1% in 2019.
The main reason for downturn in forecast of economy in 2020 is due to
widespread damages caused by COVID-19 where maximum countries in the
world are being locked down in their home and this seems to be a matter of
concern for businesses. However, a rise from 2021 with a forecast of 6.4%
growth can show positive hope and scope for doing business. According to
 the Nepal Macroeconomic update, average inflation will rise up to 6.0% in
fiscal year 2020 which is above from 4.6% a year before, because of lower
production and supply chain disturbances due to the COVID-19 pandemic.
https://www.adb.org/news/nepals-economy-slow-fy2020

 Social Factors: Social cultural factors also have a deep impact in both online
and offline businesses. While doing our business we need to consider that
Nepal is a multi-cultural and multi-lingual nation so needs and demands of
people may vary. Today in 2020, the Nepalese population is approximately
29.14 million which ranks 49th in the world where only 4% or less of the
population are estimated to be over the age of 65 years and 57.9% of the
population lies in the age group of (15-65) years.
https://worldpopulationreview.com/countries/nepal-population/ Nepal being a
developing country, here we can see large number of young population which
has high potential to help the Nepalese economy as well as we can see the
availability of customers for our business as more youths prefer ordering
online in there busy life schedule.

 Technological Factors: In this 21st century the whole world is running after
inventing and using various new technologies. However, Nepal is still lagging
behind in new technological innovation as well as implementation of latest
trending technologies due to lack of huge capital. But we can see the use of
internet growing rapidly among youths. According to Nepal
Telecommunications Authority (NTA), the number of internet users has
 increased to 21.2 million https://english.khabarhub.com/2020/05/73461/ with
internet penetration rate of 63% https://www.nepalitelecom.com/2018/01/internet-
in-nepal-users-rapid-increase.html as of November 2019 which indicates that
large number of people can be reached through our ecommerce website.

3.1.3 Market Barriers to Entry and how “Madhuri Bag Bazar” will overcome
these barriers: - To start up and to establish a brand name through both
offline and online platform in this highly competitive market is very
challenging in a developing country like Nepal. But it is also truth that online
business is growing day by day and also it is being a profitable approach.
Though there will be several barriers for doing any business but if everything
is pre-planned and correct decision is made at right time than it will be easy
to overcome those barriers. So, our business “Madhuri Bag Bazar” also has
to face market barriers to entry in the market of Nepal and they are
described below along with description of how we can overcome those
barriers:
a) High start-up cost
For the start-up of any business, it requires huge amount of money from
bringing the raw materials from suppliers to delivering those finished products
to potential customers. We have also planned to sell our products through
online platform which also requires main outflow in marketing to establish the
brand value. Accordingly, this can be a major fear for us while entering the
market. So, to overcome this we will be seeking loan from investor so that we
won’t have to run out of money in the initial phase of doing business.

b) Socio-political barrier
This socio-political barrier can also be one of the main barrier for our entry in
doing online business. Generally, the people of Nepal prefer in traditional
approach of shopping i.e. going to the physical store and purchasing items
which many of the people also mentioned while doing our survey. So to
overcome this we have planned to create user friendly website, we will also
be available in social media platform such as Facebook, Instagram and our
helpline number will also be provided in the website which will help the
 customer to purchase the bags. They can easily ask if any confusion or
queries arises to them as customer satisfaction is a key for successful
business.

c) Brand recognition and lack of trust

For the Biratnagar market, it is not that hard to capture the market share as
there are less number of bag stores which provides large varieties of bags.
Though many people prefer online shopping these days but in the context of
bags people feel afraid to buy it online because of lack of trust of the online
bag stores. Many people think that, “What they see in pictures are very
different from what they are getting from online stores.” So to overcome this
barriers we will be giving our first priority towards customer satisfaction
through physical store and if they are satisfied with our products, we will be
suggesting them to leave some reviews about the bags so that, person who is
willing to buy online can see the reviews from people and can easily buy.
These days word of mouth plays a huge role in marketing of any product or
services. Our USP will also be to provide live chat so that customers can any
time visit our website/page and ask about our products to be confirmed and
satisfied before purchasing.

d) Payment portal
This will also be one of the threat for us to enter in the market. As many
people still hesitate to do online payment. So, keeping this in mind we have
planned to come up with various payment option such as credit/debit card,
bank transfers, and cash on delivery etc.

3.1.4 Market competitors:-

Now talking about the market competitors, there are some of the retail
stores in Biratnagar itself which are providing the bags for customer but they
don’t have large product variety and they are also not serving the products
online. There are some online websites for bags stores from overall Nepal
which are providing bags to customer but we came to know that they don’t
have the large product variety to choose from and also some of the online
shopping platform like Daraz.com, Nepbay.com, and PasalNepal.com are
 not specialized platform for just selling bags. So, by focusing the problems
of those customers who are willing to buy bags from specialized bag store
only, we have come up with this idea. We have classified our competitors in
terms of direct and indirect which are as follows:
 Direct Competitors:
i. DS Collection Bags (DS Nepal.com)

ii. Bags traditional retailers all over Nepal

iii. Different online store only available in Facebook and Instagram page
such as “Mad about Bags”, “Online bags collection”, “Bagsyayy”, “Bags
Nepal”.

 Indirect Competitors:
 i. Nepbay.com

ii. Daraz.com

iii. PasalNepal.com
iv. Meroshopping.com

v. Bhat bhateni