Distribution Management

in Nepal

Mohan Bhandari
GMMC
Distribution Channel in Nepal
 Most of the manufacturers use conventional
distribution channel
 Wholesalers and retailers are major channel
members in Nepal
 About 89% manufacturers use two-level channel
consisting wholesaler and retailer
(Koirala,1991)
 Agents are mostly used for imported
products, insurance, advertising, manpower,
education consultancy
Distribution Channel in Nepal
 Local /small producers use direct channel

 Services are distributed through direct channel

 Independent channel members dominate the

market channel

 Convenience stores dominate the retail

channel
Distribution Channel in Nepal
 Specialty stores and cooperating stores
are emerging
 Super market, departments, online stores are
also increasing
 Big retail stores are mushrooming in urban
areas.
 Wholesalers are also involved in retail
business and retailers are also involved in
wholesale business
Distribution Channel in Nepal
 Channel conflicts are common in Nepalese
channel members
 Reasons for channel conflicts are:
 Unclear roles
 Perceptual differences
 Financial matters
 Goal differences
 Lack of training and motivation
Mode of Transportation in Nepal
 Containers
 Railways (52km Janakpur-Jayanagar)
 Trucks and lorries
 Ropeways (42km Hetauda –Kathmandu,
Pokhara-Muktinath, Butwal-Palpa)
 Airlines
 Pipelines (Water)
Birgunj Dry
port
 The Dryport Customs Office was Constructed in 2000
 Train Line Constructed by Indian Government
(from Raxaul Point of India to Sirsiya of Nepal)
 Railway Agreement between Nepal & India (21,
May 2004)
 Operated from 16, July 2004
 Established as a Customs Office in 11, January 2005
 Railway Agreement with India about Flat Wagon
Cargo
from Letter exchange
Physical Infrastructure

 Nepal\'s First Dry Port Customs Office covered

Land area 38 hector
 Four Shed House, Terminal Building, Weighing
Bridge, Two Banks, Six Lines for Train
Contgainer yard
 High Mast Lights with Generator Backup
 Container Scanner
Physical Infrastructure
 Inadequate storage facilities
 Lack of mechanized material handling
 High cost in physical distribution
 Private enterprises are unwilling to market
basic products to rural and remote areas
 Public enterprises are supporting the
distribution of fertilizers, food grains, salt
sugar , fuel medicine etc.
Role of Government Sector
 Nepal Food Corporation
 Agricultural Inputs
Corporation
 Salt Trading Corporation
 Nepal Oil Corporation
Nepal Food Corporation

 Established by Janga Bahahadur in

Thapathali
 To provide food grains to army, civil servants
and religious works
 Controlled by Nepal Army
Agricultural Inputs Corporation

 Established in 2022 BS
 Governed owned enterprises
 It provides fertilizer and seeds based on
subsidy
 It imports agricultural inputs from Global Tender
 CIF (cost, insurance and freight) method from
Kolkata
 Transportation subsidy to 26 districts
Salt Trading Corporation
Limited
(STC)
 The first Public Private Partnership (PPP) of
Government of Nepal.
 Established to ensure proper supply and
distribution of essential daily consumable
goods, erode black-marketing by regulating
market and artificial scarcity and industrial
development in Nepal.
Salt Trading Corporation

 Besides salt, STC also sell sugar, wheat, oil,

rice, various other grains, tea, LP gas, paper,
coal, tyre for vehicles etc.
 It reaches out to the poor and needy people
of remote districts of Nepal especially the hilly
and Himalayan regions.
Salt Trading Corporation
 Salt: Ayo, Bhanu, Shakti and Tej.
 Sugar, Rice, Pulses
 Wheat & Allied Products
 Oil, Spices,
 Paper & Allied Products
 Cements: Udaypur and Hetauda
 Coal, LP Gas & Allied Products:
 Tyre & Allied Products: Different sized trucks
and non-trucks tyres and tubes
Nepal Oil Corporation

 NOC was established in January 1970 by the

Government of Nepal as a state-owned trading
company to deal with the import, transportation,
storage and distribution of various petroleum
products in the country.
 NOC, headquartered in Kathmandu, has Five
Regional Offices and also Branch Offices, Fuel
Depots and Aviation Fuel Depots with total
storage capacity of 71,622 Kilolitres (KL) and
around 600 employees.
Nepal Oil Corporation

 Responsible for the import and distribution of

petroleum products
 through around 1500 Tank Trucks and 1500
retail outlets owned by the private sector
Role of Wholesalers and Retailers
 Distribution efficiency
 Market coverage
 Selection facilities
 Financing
 Promotion
 Bulk buying and bulk breaking
 Market information
 Service etc.
Problems and Challenges
 Difficult topography
 Land locked character of the country
 Scarce domestic production
 Import-based economy
 Lack of proper rules and regulations
 Geographical concentration of business and
industries
 Lack of visionary decisions (short-
sightedness)
Distribution Management in Nepal

Any Queries?
Thank you!