The Bhutanese Leading the way.
Bhutan’s E-commerce industry is growing rapidly, but many businesses still depend on an informal delivery network that relies heavily on taxis and passenger buses. While this method is widely used due to its affordability and accessibility, it lacks essential features like tracking systems, resulting in frequent delays and unreliable service.
A recent study by Gopal Pradhan and Singye Choden found that most online businesses in Bhutan continue to use taxis and buses to deliver goods both locally and across districts. Some also use private vehicles, especially for nearby orders. Courier services, such as Bhutan Post or private logistics companies, are less commonly used, particularly for local deliveries, due to higher costs or limited coverage.
This informal system has created a major gap in Bhutan’s growing E-commerce sector. Around 58 percent of surveyed businesses identified the lack of delivery tracking as a significant challenge, and 37 percent reported frequent delays in reaching customers. Without tracking systems, sellers cannot confirm the status of packages, and customers are often left in the dark after making a purchase.
Despite increased online activity, the physical and digital infrastructure needed to support E-commerce has not fully developed. Many businesses operate through social media platforms like Facebook and Instagram, but lack access to affordable, structured delivery services. Small and startup businesses are especially affected, as they cannot afford to build their own logistics systems.
This challenge is made more difficult by the presence of unlicensed online sellers, who often operate informally through social media and are not subject to business regulations or consumer protection laws. These unregulated sellers increase competition for licensed businesses while also reducing consumer trust in the online market.
The study recommends that the government, particularly departments under the Ministry of Industry, Commerce and Employment, collaborate with Bhutan Post and private courier companies to create a shared delivery system with built-in tracking capabilities. Such a model could increase delivery reliability and support rural businesses that face the greatest logistical barriers.
Other recommendations include offering targeted government subsidies to help small businesses develop digital storefronts and apps, providing training in E-commerce marketing and cybersecurity, and improving mobile banking systems like Bhutan QR to expand digital payments, especially in rural areas.
The E-commerce sector in Bhutan has shown strong potential, driven by young entrepreneurs and increasing internet usage. But without improvements in delivery infrastructure, including basic tracking and dependable service, many businesses may struggle to meet customer expectations.
