Bhutan’s e-commerce landscape is undergoing a transformation, with a noticeable shift toward video-based platforms like TikTok. However, despite this digital evolution, a new study by the Competition and Consumer Affairs Authority (CCAA) reveals that significant logistical hurdles and the presence of unlicensed online sellers are stalling the sector’s progress.
The report, titled “State of E-Commerce in Bhutan: Challenges and Government Support to Improve Service to Consumers”, offers a comprehensive look at the country’s online business ecosystem. It highlights both the growing potential and pressing limitations facing Bhutanese entrepreneurs in the digital marketplace.
According to the study, nearly 68 percent of e-commerce businesses still rely heavily on Facebook and personal websites to market and sell their products. Instagram follows closely at 47 percent, while 37 percent of businesses are branching into customised mobile apps and short-form video platforms like TikTok — signalling a move towards more dynamic, engaging methods of online commerce.
Under Bhutan’s Trade and Industry Rules, e-commerce is defined as the buying and selling of goods or services online, which can include anything from physical items to digital content.
While the sector continues to grow, over half of the 35 operational businesses surveyed cited ongoing issues with delivery and logistics. Many e-commerce companies depend on taxis and buses to handle deliveries — a system that lacks proper tracking infrastructure and often results in delayed shipments and high transportation costs.
“The absence of a coordinated delivery network is a major bottleneck,” said a representative from the CCAA. “Businesses are struggling to meet consumer expectations due to unreliable systems.”
High costs of mobile app development, unreliable digital payment options, and increasing cyber security threats were also among the key concerns raised by business owners.
Compounding these issues is the growing number of unlicensed sellers, particularly those operating informally through social media platforms. These sellers not only undercut registered businesses but also evade regulatory oversight, putting consumers at risk.
In response, the CCAA has put forward several policy recommendations. Chief among them is the need for stronger regulatory enforcement to clamp down on illegal operators. The authority also proposes creating a collaborative delivery system involving Bhutan Post and private couriers. Such a platform, complete with package tracking features, could improve delivery reach, especially in rural regions.
To further support small businesses, the study advocates for targeted government subsidies and grants. These would help entrepreneurs build functional mobile apps and online storefronts, making digital commerce more accessible and inclusive.
The findings underscore the promise of Bhutan’s e-commerce sector — not just as a tool for business growth, but also as a means of expanding consumer access and driving innovation across the country. With timely policy support and infrastructure development, experts believe e-commerce could become a vital pillar of Bhutan’s digital economy.
