Is Sri Lanka a potential start-up country?

• Lamudi Sri Lanka examines the capacity of the nation’s start-up culture

A growing number of internet start-ups have been investing in Sri Lanka over the past couple of years. These start-ups focus on several categories such as online real estate advertising, food reviews, delivery and travel and tourism. So, does this mean that Sri Lanka has a positive outlook for digital businesses?

According to statistics obtained from Statistia, an online statistics platform, almost a quarter of the nation’s population of nearly 21 million have access to the internet. The growth was distinguished after the civil war ended in 2009, before which the internet penetration was less than 5%. Today, the growth rate has been recorded at nine percent.

Within the past five years, internet usage has developed quite rapidly. Simultaneously, the usage of Facebook and other social media sites rose up as well. As specified by Readme.lk, nearly 2.3 million Sri Lankans had active Facebook accounts with 33% of them being between the age group of 25 and 34, as of Q4 2014.  The younger generation today, aged between 25 and 34, are highly tech savvy and are exposed to trade over the internet, consequently, creating a cash-free environment in the near future. As of mid-2014, it was identified that 950,000 Sri Lankans had purchased credit cards with an intention of purchasing goods online or to use at point of sale (POS). 

The Sri Lankan internet market is growing significantly where people are becoming more comfortable with purchases of goods online using credit cards, debit cards and cash on delivery, simply because it is very convenient. In addition, search for information of any sorts, be it statistics, market reports or international updates, the internet is being relied upon quite heavily. 

This indicates that internet and social media are key players in the near future of Sri Lanka. Retailers who were mainly focused on selling offline have achieved more sales via the use of online platforms. A renowned real estate agency, Property Line, stated that it was able to rent out properties to more than 50 customers of which most were expats, through Lamudi Sri Lanka, a leading online real estate platform.

In a recent research by MasterCard, it was identified that Colombo is world’s fastest growing city. Internet plays a major role in the city attaining its position because investors, tourists and expats explore the nation and its future potential using the internet. Additionally, major international and domestic luxury real estate developers maximise their sales using online means to achieve international exposure, thereby, attaining a strong inflow of currency into the country.

Hugh van der Kolff, Managing Director of Lamudi Sri Lanka, said: “Sri Lanka has only now moved to the digital world, while many other nations have already changed years ago. As an emerging nation, the country has room for several unique internet start-ups to satisfy the needs of the modern buyer without hassle. With developed markets reaching saturation or lack of room for new entrants, internet businesses are looking for emerging nations to invest in. So, Sri Lanka is definitely is a blue ocean for internet start-up companies.”