harilo's journey in nepali e-commerce industry

Harilo.com is the electronic equivalent of that relative we all have who lives abroad and visits Nepal frequently. A relative with a suitcase the size of a Mary Poppins carpetbag, who doesn’t mind bringing in all the weird stuff you order online and doesn’t judge you for it either. What’s behind the success of Harilo.com?

There’s much that web entrepreneurs can learn from Harilo.com’s success. It’s a simple yet elegant solution that provides a service we’ve always wanted with minimal fuss. Co-founders Akshay Sthapit and Kim Smith share the story of Harilo.com, talk about the challenges they faced, and discuss the current climate in Nepal for internet startups.

What sparked the idea for Harilo?
Akshay: It was a combination of living here and also having lived abroad. People would ask you to bring stuff back for them and I was also asking other people to bring stuff back for me. Both situations were uncomfortable. It was also a project for a Logistics class while I was at MIT. I met Kim in Kathmandu. I was here looking for something to do and Kim was looking to start an export business. So I found a perfect partner to start Harilo.

When did Harilo start operations? How long did it take from getting the idea for Harilo to actually launching it?
Akshay: It took us one summer to do the coding and internal testing. We did test shipments for ourselves, going through all the steps a customer would, and working on any setbacks they might face. In fact, we’re still working on it. We’re always updating the code based on feedback from people who use Harilo.

Kim: We worked full-time on it. We also wanted to make sure that we were not taking loans or doing things we couldn’t afford. We just got a really small office and we were dealing with the customers ourselves.
Akshay: A lot of [our growth] was through word of mouth, we never paid for any advertising.

What challenges did Harilo face when it first started? What is the environment like for tech startups in Nepal?
Akshay: The setbacks have been mostly small ones, like getting paperwork done. Nepal doesn’t make it easy for startups. There’s not a good ecosystem where people help each other. We have to depend on ourselves to figure stuff out.

Kim: The government officials aren’t very helpful. It’s hard to even find a place where the laws are clearly written down for the regular person. A lot of it was trial and error, and it took some time just to figure out what we’re supposed to be doing. The bigger idea itself was not difficult to pull off.

What is the process like on the US side? What differences are there between American and Nepali bureaucracy?
Kim: I deal with everything on that side. I place all the orders, I track when all the shipping links are updated from the seller. If there are any problems with customer service, I act as the intermediary between the customer and the seller in the US. I also handle things like returns, export compliance, and US taxes.

Sometimes it’s easier to deal with the government here [in Nepal] because in the US, there is NO ONE you can talk to when you’re doing something unique and need to figure out special cases.

Do you have any features you are planning to introduce in the future?
Akshay: Yes, we’re looking to have more points of origin for shipping. Right now we only have Florida. If you order from Hong Kong, your item still gets sent to Florida first. So we want to introduce places like India or Thailand as points of origin as well. We’re also trying to get the Harilo courier service off the ground.

Are there any features you would like to introduce but are not able to due to government regulations?
Kim: Yes. The Nepali government doesn’t allow anything that’s digital, since it’s not something that the customs office is able to verify. And there are restrictions on mobile phones and wireless routers or trivial things like camouflage print. But we comply with the rules, even if they don’t make sense to us.

Are these restrictions holding back Internet based companies in Nepal from growing and being successful?
Kim: Because the rupee is non-convertible, the Nepali government doesn’t let us transfer money outside for digital purchases/downloads. I think it does hold back Nepali businesses in a lot of sectors. We’re not allowed to compete on a global stage. You can’t do thinks like register a Skype phone number, buy Facebook credits for advertising, or any kind of online training that you have to pay for.

All those things are restricted if you don’t have an international credit card. But if it is really important to them, people find a way. And then the government misses out on tax payments that they could have received.

Are you working on anything else?
Akshay: I’m working on a project called Node, where we collaborate with world-class children’s book illustrators and create books that we can sell abroad.
Kim: I am working on a way to streamline the process for international payments through credit cards for Nepali businesses.

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