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eCommerce in Sri Lanka

1. Introduction
2. Demographics
3. User Interest
4. User Behavior
5. Acquisition
6. Conclusion

A Report on eCommerce Trends in Sri Lanka

Kaymu welcomes you to the comprehensive report on modern day e-commerce trends in Sri Lanka. What the future of e-commerce holds in the forthcoming era can be defined by the connected consumers, however Kaymu has created this report based on the geo-targeted e-commerce trends across Sri Lanka by carrying out an in-depth analysis of the trends demonstrated by the e-commerce community in Sri Lanka during the recent couple of years. This report intends to educate e-commerce entrepreneurs as well as those who are, in any other way, associated with this rapidly developing industry in the region.

The e-commerce industry is profoundly impacted by the rise of social networks and the proliferation of mobile devices at an enormously large scale. Since mobile devices such as smartphones and tablets have made a vast number of choices and plenty of information available at fingertips, consumers are leaving behind traces and records of their behaviors, preferences and interests; and this report aims to capture and analyze all these trends.

As modern e-commerce strategies across the globe are a result of the online activity of consumers and the resulting data record, it is a good idea for current as well as future e-commerce entrepreneurs to study this report and consequently craft effectual strategies for their online businesses. The market dynamics mentioned in the report are at the epicenter of key developments that we believe, define the e-commerce trends for the modern day and provide a sound basis for future forecasting.

Kaymu, the largest online marketplace of Sri Lanka aims on providing a single platform to buyers and sellers across the globe to buy/sell products with the ease of a few mouse-clicks. Kaymu has multiple e-commerce domains spread across many countries worldwide. Backed by the world's largest Internet incubator, Rocket Internet, this online marketplace has been successful in generating substantial amount of traffic on all its domains worldwide.

1. Introduction

1.1 Quick Facts about Sri Lanka...

  • Population: 21,866,445.00
  • Internet Users: 4,788,751
  • Average Internet Penetration Rate: 22% (vs 76.15% in the European Union).
  • Facebook Users: 2,400,000
  • Facebook Penetration Rate (/Internet Penetration): 50.12%
  • Kaymu Fans: 92,251
  • Percentage of Kaymu Fans (Facebook Users): 3.84%
  • Percentage of Total Fans: 2.80%

1.2 ... and About Kaymu Global

  • Globally, Kaymu covers more than 1 billion people in total, and 250 million Internet users
  • Out of the above mentioned 250 million internet users, approximately 68.39% have a Facebook account.
  • An approximate of 2.15% of total Facebook users in the countries with Kaymu's presence have liked Kaymu on Facebook.
  • Average Internet penetration rate is 29.14% (vs 76.15% in European Union)

2. Demographics

2.1 Age Groups

Through the research conducted by Kaymu and the facts collated, it can be observed that the population falling between the age brackets of 25-34 years account for the highest number of users, with the 35-44 and 18-24 bracket falling at second and third places respectively. One of the primary reasons behind this observation is the fact that people falling in the age bracket of 25-34 years are more inclined towards technology and its usage. These people are at the forefront of technological revolution and are more open towards online shopping.

Interest of people in e-commerce among various age brackets in Sri Lanka

2.2 Gender

If we look at the overall e-commerce activity in terms of gender and compare the males vs females ratio for e-commerce in Sri Lanka, we can observe that out of the total e-commerce activities carried out, 68% comprised of males, with females involved in only 32% of the total. However, if we compare the average e-commerce conversion rate1 between the two genders, we will be amazed to figure out that it was nearly similar.

Activity of male vs female in e-commerce across Sri Lanka

E-commerce Conversion Rate: The percentage of website visitors that actually buy online. For example, if hundred visitors landed on a website and only two of them purchased the product, the e-Commerce conversion rate would be 2%.

2.3 Geographic Trends

Colombo being the capital as well as metropolitan city of Sri Lanka, prevails the list of yearly e-commerce activity in the country with 31% of total traffic followed by Kandy at 16%. Galle which is less populated as compared to Colombo and Kandy, stands at third place with 13% of the country's total e-commerce activity each year. Other cities with the highest inclination towards e-commerce following Colombo, Kandy and Galle include Kurunegela and Moratuwa with 8% and 7% respectively.

60% of the e-commerce transactions2 are carried out in three major cities of Sri Lanka.

- Colombo
- Kandy
- Galle

Statistics showing geo-targeted e-commerce trends in Sri Lanka

E-commerce transactions: An e-commerce transaction is completed when a user adds a product to the cart and then confirms the order.

3. User Interests

3.1 Affinity

By classifying modern day e-commerce trends in Sri Lanka with respect to users' interests, Kaymu observed that technophiles3 lead the list with 7% of the total e-commerce activity in the country, followed by TV lovers with 6%, news junkies & avid readers with 5%, shutterbugs and South Asian film fans4 with 4.5%, shoppers and travel buffs with 4%, mobile enthusiasts and movie lovers with 3.5% and music lovers/world music fans with 3% share of the total e-commerce activity across Sri Lanka.

There are several other classifications that consist of less than 3% share of the shopping profile. The following graph shows more than 65% of the major affinity categories for e-commerce in Sri Lanka.

E-commerce trends in Sri Lanka with respect to affinity

Technophiles: People who are enthusiastic about new technology.
Shutterbugs: Enthusiastic photographers, who love to take and upload pictures. Work around photography and may also work as professional photographers.
Movie Lovers: People who love to watch movies on a regular basis, are up-to-date on upcoming movies and have in-depth knowledge about movie celebrities.
Music Lovers: People interested in a specific type of music genre (for example: rock, trance, classical, or pop), watching movies, are up-to-date with music industry news and events.
TV Lovers: People who follow television dramas and shows on a regular basis.

3.2 In-Market Segment

E-commerce trends across Sri Lanka pertaining to in-market segment have remained much inclined towards electronics and mobile phones lately. The facts show that online customers in Sri Lanka are mostly interested in searching about and purchasing consumer electronics & mobile phones, followed by used motor vehicles, employment, apparel & accessories, real estate/residential properties for sale, education/post-secondary education, travel/hotels & accommodations, dating services, computers & peripherals and motor vehicles by brand respectively.

E-commerce trends in Sri Lanka with respect to market segment

4. User Behavior

4.1 New vs Return Traffic

While conducting analysis of Sri Lanka's e-commerce trends with respect to user behavior, it has been concluded that the conversion rate of returning visitors5 has remained double than the first time visitors. To be more specific: it is 130% more than that of the new customers.

Moreover, the average session duration for the new visitors6 is 3 minutes, whereas for the returning visitors, it is 6.5 minutes. There are several reasons for high session time7 and better conversion rate for return visitors. A few important reasons are:

  • Brand loyalty - Regular buyers: Returning visitors are brand loyal, spend more time browsing products, and are keen towards making a purchase as compared to the new visitors.
  • In some cases, return customers make up their minds during or after the first visit and the purchase process is carried out in the second or third visit, resulting in a higher conversion rate for return visitors.
  • Serious buyers are found frequently comparing products and browsing websites for better options & price.
  • The buying process takes a bit more time.

Out of the total e-commerce visits in a year, 51% are estimated to be new visitors, whereas the remaining 49% are returning visitors. One of the reasons for considerably good percentage of returning visitors is the low number of e-commerce competitors in Sri Lanka. Visitors have limited options available for online shopping stores.

User Type Sessions8 Avg. session duration E-commerce conversion rate
New visitor 51% 00:03:30 1.30% - 1.70%
Returning visitor 49% 00:06:30 3.00% - 3.40%

New vs returning visitors segmentation with session duration and conversion rate

New visitors: First time visitors, tracked using browser cookies.
Returning visitors: Users who were visiting the website again using the same device, tracked using browser cookies.
Session Time: The time a visitor spends on a certain website.
Sessions: Number of times users visited websites. For example: If a user visited a website three times, then it would be counted as three sessions. If five users visited a website seven times, it will be counted as seven sessions.

4.2 Engagement

Visitors who spend 0 to 10 seconds on e-commerce websites account for the highest percentage. As per findings, reasons for spending less than 10 seconds for the majority percentage of the traffic are:

  • Visitors were interested in knowing the product price.
  • Visitors werenot interested in product, after clicking advertisement link.
  • High bounce rate9 of product pages, where users don't have much options / choices.

Most of the e-commerce transactions fall under 61-600 seconds sessions.

Session Duration Session Page Views
0-10 seconds 48% 8%
11-30 seconds 4% 1%
31-60 seconds 5% 2%
61-180 seconds 13% 9%
181-600 seconds 15% 21%
601-1800 seconds 11% 31%
1801+ seconds 4% 27%
The data is read as: (example - first row): 48% of the sessions on e-commerce websites in Sri Lanka stays between 0 to 10 seconds and consisting 8% of total page views

Bounce Rate: The percentage of visitors at a particular website who navigated away from the site after viewing only one page.

4.3 Frequency & Recency

With regards to frequency, all sessions with count one are new visitors on e-commerce websites, however those with count equal to or greater than 2 are repeat visitors Kaymu e-commerce survey10 indicates that:

  • Three to five time visitors are mostly brand loyal to the specific website and repeatedly visiting website with considerably good percentage of page views.
  • Session count between 6 to 8 are interested in a specific product and are repeatedly visiting same product on a website.

Count of Sessions Sessions Page Views
1 - 2 66% 54%
3 - 5 16% 19%
6 - 8 6% 7%
9-14 5% 7%
15-25 3% 5%
26-50 2% 3%
51-100 1% 2%
101-200 0.7% 1.5%
201+ 0.6% 1%
The data is read as: (example - first row): 66% of the sessions on e-commerce websites in Sri Lanka has one to two visits, and consist of 54% of the total page views.

Kaymu e-commerce survey: A survey form having questions for online buyers and sellers.

4.4 Operating System

Traffic (%) Average duration (Min) Conversion rate (%)

When it comes to operating systems used for browsing e-commerce websites in Sri Lanka, Microsoft Windows leads the list and accounts for 73% of the total sessions, the average time duration and the e-commerce conversion rate of Microsoft Windows are also quite high. Microsoft Windows is closely followed by the Android operating system with 18% sessions. The rest of e-commerce traffic in Sri Lanka comes from other operating systems including iOS, Macintosh, Linux, Windows Phone, BlackBerry and Nokia OS.

4.5 Web Browser

Traffic (%) Average duration (Min) Conversion rate (%)

With rapid evolution of technology and the advent of new and advanced software, people make use of different internet browsers to surf the World Wide Web. Our research reveals that Google Chrome is the most popular internet browser in Sri Lanka with 57% of the total e-commerce visitors using this software, followed by Mozilla Firefox at second place with 20% of the total e-commerce visitors in Sri Lanka. The rest of the 23% e-commerce traffic in Sri Lanka comes via Android Browser, Internet Explorer, Safari, Opera, Opera Mini, UC Browser, Safari (inn-app) and Maxthon respectively. Moreover, Maxthon, Opera Mini and Google Chrome lead the list of the average session duration of e-commerce users, respectively. The conversion rate of Opera Mini and Maxthon remained the highest, followed closely by Google Chrome and Mozilla Firefox

Safari (inn-app): When a page is viewed using Mobile Safari within another app. For example, if you use the facebook iOS app, when you click on a shared blog post, it will open the site, without passing over to the Mobile Safari app. This visit would then show as "Safari (in app)".

4.6 Devices

Traffic (%) Average duration (Min) Conversion rate (%)

As a result of the research conducted by Kaymu with regards to devices used for browsing e-commerce websites each year, personal computers such as desktops and laptops lead the list with 75% of total annual traffic followed by mobile phones and tablets with 21% and 4% respectively.

E-commerce conversion statistics with respect to devices prove that visitors prefer using mobile devices and tablets to gather product information, conduct research about the product specs and compare prices, whereas they find it more convenient to use desktop personal computers and laptops to finally make an online purchase.

4.7 Mobile Devices

Traffic (%) Average duration (Min) Conversion rate (%)

Further analyzing mobile traffic (which is 21% of overall e-commerce traffic in Sri Lanka) reveals that Apple iPhones remain the most used mobile device with 13% of the total sessions followed by Apple iPads with 7% sessions and Samsung Galaxy S Duos 2 with 4% sessions. Other Samsung galaxy phones, Huawei Honor 3C and many other smartphones were also used throughout the year in e-commerce sessions and conversions. Although Android phones are more common and affordable yet Apple iOS devices are leading the mobile e-commerce market.

Furthermore it is imperative to note that e-commerce traffic from mobile devices in Sri Lanka is expected to increase due to the launch of 3G and 4G services in the country.

5. Acquisition

5.1 Traffic Sources & Segments

Free channels are more conversion oriented because unpaid visitors have somehow themselves initiated the buying process, or showed interest to know more about the product(s). The interest is initiated by subscribing to the newsletters, establishing connection with the website's social pages, or specifically searching for a product on search engines. Search engines publish paid advertisements on search engine result pages (SERPs), but, organic results are considered more trustworthy and authentic as compared to the paid ads; this, in turn, results in better conversion rate for organic traffic as compared to the paid search ads.

Let's explain each channel to have better insight of each traffic medium.

  • Google Paid: Includes Google paid advertising on search engines (also called Search Engine Marketing - SEM) and advertising on websites (also called Google Display Network - GDN)
  • Facebook Paid: Facebook is most used social advertising channel in Sri Lanka, and incorporates two types of advertisements: one under friends feed, and other on the right column.
  • Other Paid Channels: Other paid channels include Gmail Sponsored Promotion (also called GSP) and the advanced Remarketing / Retargeting traffic.
  • Organic: Visitors landed on e-commerce websites after searching on search engines, for example: Google, Yahoo, Bing etc.
  • Direct: Visitors who opened the e-commerce websites by typing web address on the browser.
  • Referral: Visitors who landed on e-commerce portals by clicking on the website links (non-paid link). For example: links on blog comments, links in articles, reference links etc.
  • Social Media: Visitors from social portals such as Facebook, Google+, Twitter, LinkedIn, Pinterest etc (non paid link).
  • Others: Traffic from unidentified sources and custom sources & mediums.

Tip: E-commerce professionals looking for increasing the overall conversion rate should focus more on free traffic generating channels. Specifically, search engine optimization (SEO), increasing newsletter subscriber base and social media marketing.

Sessions: Number of times users visited websites. For example: If a user visited a website three times, then it would be counted as three sessions. If five users visited a website seven times, it will be counted as seven sessions.

5.2 Brand Loyalty VS Non-Brand Traffic

As per findings of Kaymu Sri Lanka, hardly 14% of the total online customers would prefer to buy from the website they have ordered before (unless and until they had some issue with product quality or delivery). Rest 86% would like to conduct online research and make price comparisons, look for package deals and special promotional offers before they could finally make a decision.

Brand loyal VS Promiscuous Customers

5.3 Hours of Day

Sri Lankan people usually make online purchases between 2:00 PM and 8:00 PM. According to the research, almost half of the total e-commerce sessions in Sri Lanka are recorded at timings between 2:00 PM and 8:00 PM.

Apart from the traffic, this peak time also has the maximum e-commerce transactions. The time during afternoon and evening has maximum traffic and orders as there is no considerable fluctuation in conversion rates of hours with more traffic.

Traffic during hour of day

5.4 Peak Days

If we have a look at the peak web traffic days in Sri Lanka, we'll figure out that Tuesday remains the busiest day in terms of e-commerce traffic followed by Wednesday and Monday.

>Change in traffic depending on the days of week

5.5 Peak E-commerce Conversion Days

Since e-commerce traffic does not define the peak conversion days, Kaymu conducted a separate research and collected facts and figures to find out that Monday and Friday are the top e-commerce conversion days in Sri Lanka with Monday leading the list, followed closely by Friday.

Change in conversion rate depending on the day of week

5.6 Quarterly E-commerce Trends

After having a look at the quarterly trends, it has been found that watches remained the top selling items in Sri Lanka throughout the year alongside clothing. Moreover, mobile phones & accessories, jewelry, electronic devices and health & beauty products have also grabbed significant shares of online business in Sri Lanka during the recent couple of years.

  • Watches
  • Phone Accessories
  • Clothing
  • Jewelry
  • Mobile Phones

Each year, watches led the list in the first quarter, followed by phone accessories and clothing.

  • Clothing
  • Watches
  • Electronic Devices
  • Health & Beauty
  • Phone Accessories

During the second quarter, Clothing peaked the list of top selling products followed by watches and electronic devices.

  • Watches
  • Phone Accessories
  • Men's Clothing
  • Electronic Devices
  • Jewelry

Watches remained dominant even in the third quarter followed closely by phone accessories.

  • Phone Accessories
  • Watches
  • Jewelry
  • Clothing
  • Health & Beauty

In the fourth and final quarter of the year, phone accessories peaked in the list of top selling products in Sri Lanka followed by watches.

5.7 Occasional Impact on E-commerce Transactions

Just like seasons have their impact on the type e-commerce transactions around the world, the special occasions also greatly boost up the sales. Occasions such as Tamil New Year (Sinhala and Buddhist new year during mid April), Holi, New Year and Full Moon Poya Day festivals provide great opportunities to e-commerce entrepreneurs across Sri Lanka to generate adequate profits and sales.

There is a considerable boost in sales of occasion related products each year. However, Sri Lanka being a tropical country with no major influence of season on sales of apparel. As per the research, Saree is the most common, popular, and in-deamnd traditional women dress in Sri Lanka.

During cricket world cup 2015 (end of first quarter and start of second quarter), there was larger number of sales for Sri Lanka cricket t-shirts, cricket bats, balls, cricket kits and accessories. Also, sales of football related products started to grow by the end of second quarter of 2014, owing to the upcoming FIFA World Cup.

5.8 Payment Methods

The top payment methods in Sri Lanka are:

  • Cash on Delivery: is the most commonly used payment method in Sri Lanka. As per estimates, more than 95% of e-commerce users in Sri Lanka prefer cash on delivery (COD) payment model.
  • Bank / Wire Transfer: Very few e-commerce businesses operate on the system of only delivering the product after receiving the amount through a wire/bank transfer.
  • ezcash / mcash: Some e-commerce websites also prefer these payment models for transferring small amounts.
  • Credit Card: Most of the e-commerce websites in Sri Lanka have merchant accounts integrated on portals to facilitate credit card transactions. However, almost all such e-commerce websites also offer multiple other payment methods and cater to the cash on delivery system.

5.9 Query Trends

As per Google Trends for the year 2013, 2014 and 2015. Mobiles and dresses remain much more in demand across Sri Lanka as compared to laptops and watches.

5.10 Search Queries Related to 'Shopping'

Top & rising web searches related to shopping across Sri Lanka, from 2013 to 2015.

Breakout: More than 5000% increment in search queries.

5.11 Search Queries Related to 'Mobile Phones'

'Mobile' related top search queries in Sri Lanka, for the recent years include "mobile phone", "mobile phones", "samsung", "samsung mobile", "mobile facebook" and "nokia mobile". "Mobile phone" being the top searched keyword of the year makes it evident that a large number of consumers visited online shopping stores and marketplaces to find out about latest mobile phone models hitting the market.

5.12 Search Queries Related to 'Laptop'

Laptops are among the top searched electronics products in Sri Lanka along with the mobile phones.The top search queries related to laptops in Sri Lanka include "laptop lanka", "laptop sri lanka", "hp", "hp laptop", "laptop price" and "dell laptop".

The rising (trending) keywords in Sri Lanka with regards to the laptop category are " laptop", "abans", "abans laptop", "lenovo laptop", "lenovo" and "abans sri lanka".

5.13 Search Queries Related to 'Watches'

Watches are not just among the top searched items in Sri Lanka, but are also among the top selling online products. The top searches with regards to watches include "watches sri lanka", "ebay watches", "ladies watches", "titan watches", "titan" and "wrist watches".

The top trending (rising) keywords with regards to watches in Sri Lanka include " watches", "edifice watches", "ebay watches", "ladies watches", "mens watches" and "rolex watches prices" respectively.

5.14 Search Queries Related to 'Dress'

Clothing remains one of the leading product categories in Sri Lanka's e-commerce sector. It has been observed that "dress up", "girls", "girls dress", "games", "without dress" and "dress up games" remained top search queries during all four quarters of each year.

The rising (trending) keywords for this category in Sri Lanka include "lace dress", "long dress", "frock designs", "saree designs", "dress styles" and "party dress" respectively.

5.15 Search Query Trends

The following graph shows overall search trends for Sri Lanka on A closer look on the trend shows more than double volume as compared to the start of 2013, which means, at-least 100% growth in search engine searches across Sri Lanka.

As per Google Transparency Report, fraction of worldwide traffic for Google search in Sri Lanka is normalized roughly between 25 and 45.

How its calculated: The graphs give a representation of the ratio of Sri Lanka's search request rate to the worldwide request rate. For each time period and Google product, Google divides the traffic for each geographic region by the total worldwide traffic, giving a number between 0 and 1. Then, its multiplied all numbers by a constant, which normalizes but does not change the shape of the graphs.

5.16 Shopping Cart Abandonment

According to the in-depth e-commerce analysis conducted by Kaymu Sri Lanka, it can be concluded that the average conversion rate from all traffic channels lays within 1.30% to 3.40% (reference: New vs Return Traffic). This conversion rate is established when the customers add products to the cart and confirm the order.

However, there are also some online visitors who add products to the cart but do not actually confirm it. The visitors, who do not confirm the order after adding products to the cart, account for about 52% of the converting traffic. These visitors spend time on e-commerce websites and add products to the cart but log out and abandon their shopping carts. On the other hand, 48% of the remaining converting visitors reach the final phase of payment and complete the purchase procedure.

Estimated percentage of confirmed and paid orders

6. Conclusion

6.1 Growth

Sri Lankan e-Commerce market is expected to achieve more than 72% growth in e-commerce transactions in the near future. This consensus is based on 10% exponential growth in e-commerce transactions for each passing quarter.

Effective growth during 2014 and expected growth for 2015 and 2016

6.2 E-commerce Predictions for the Coming Era

  • Larger screen phones signify mobile traffic that converts and the coming era might be the one for mobile phones. Users with large screen mobiles might prefer to do transactions on mobile devices as compared to the desktop & laptops.
  • Re-targeting: Audience building is the new list building. E-commerce platforms using retargeting / remarketing in their online marketing strategies will grow much faster.
  • Email marketing is here to stay on smaller screens, with more people preferring mobile devices. Newsletter campaigns would look attractive on mobiles as well as on larger screens.
  • Social platforms and mobile apps will offer enhanced user experience and convenience for online shoppers. Social portals such as Facebook and Twitter are already working on facilitating secure e-commerce transactions.

6.3 Glossary

  • E-commerce Conversion Rate: What percentage of website visitors buy online. For example, if 100 visitors landed on a website and only two of them purchased the product, the eCommerce conversion rate would be 2%.
  • E-commerce Transactions: An e-commerce transaction is completed when a user added product to cart and then confirmed the order.
  • Technophiles: A person who is enthusiastic about new technology.
  • Shutterbugs: An enthusiastic photographer.
  • Returning Visitors: Users who were visiting the website again using the same device, tracked using browser cookies.
  • New Visitors: First time visitors, tracked using browser cookies.
  • Session Time: Time a visitor spends on a certain website.
  • Sessions: Number of times users visited websites. For example: If a user visited a website three times, then it would be counted as three sessions. If five users visited a website seven times, it will be counted as seven sessions.
  • Bounce Rate: The percentage of visitors at a particular website who navigated away from the site after viewing only one page.
  • Kaymu E-commerce Survey: A survey form having questions for online buyers and sellers.
  • Breakout: More than 5000% increment in search queries.

6.4 Sources

  • Kaymu Survey
  • Marketing Reports
  • Google Analytics
  • Google Transparency Report
  • Google Webmaster Tools
  • Google Trends
  • Business Intelligence (BI) Data
  • Data from e-commerce Analysts

Researched and Compiled by Regional Head of SEO - Asia: Haris Khan
Copywriter: Sameer Akbar Malik
Web Developer: Gautier Husson