Industry Trend Analysis - Nascent Mobile Commerce Offers Potential - AUG 2017

BMI View : Our mobile and consumer market outlooks point to strong grow th from a low base in Sri Lanka. Organic growth will drive mobile uptake as urbanisation rises, labour productivity increase s and operators focus more on data services. While m-commerce remains nascent and held back by low per capita income, we see significant growth potential for the sector as 3G/4G penetration rises and mobile financial services gain traction.

According to BMI's consumer market forecast, Sri Lanka is the second-fastest growing consumer market in Asia-Pacific after China ( see ' Asia's Top Five Consumer Markets ' , June 5 2017), with spending growth expected to average 6.8% in real terms between 2017 and 2021. As levels of urbanisation rise and labour productivity increases, we expect stronger data services uptake, supporting the country's e-commerce outlook. According to the Central Bank of Sri Lanka's annual 2015 report, IT related activities grew by 21.1%. However, per capita incomes remain low and consumer spending will continue to be heavily orientated towards essentials such as food and drink over the medium term. The e-commerce market remains nascent, with few local players ( Takas, Kapruka,, NicNac) covering a small share of the market retail market. That said, we expect the industry to pick up pace as 3G/4G penetration rises, mobile financial services (MFS) gain traction and more favourable regulation is implemented.

Mobile Growth From A Low Base

Focus On Data To Support MFS and M-Commerce
Sri Lanka - Mobile Market (2016-2021)
e = estimate ; f = BMI forecast. Source: BMI, operators

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