Sri Lanka - Country Commercial Guide
Selling Factors & Techniques
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Overview:

Price is generally the most crucial factor in selling.  As U.S. products have a reputation for high quality, product quality and after-sales service are also becoming important selling factors in the Sri Lankan market. 

Consumer education is also a vital selling factor.  Appointing an agent/distributor is recommended for marketing and sales.  Most government purchases are made on the basis of cost and available financing, subject to meeting the required specifications. 

Participating in regional exhibitions is another effective method of creating awareness and introducing products to the local market.  The events are well attended by both the trade and consumers. 

Trade Promotion & Advertising

Mass advertising and marketing on a range of mediums is common.  Newspapers, radio, and television all accept commercial advertising and internet-based marketing and targeting, including through social media, is growing as internet access and mobile phone penetration increases.  There are several English-language newspapers, as well as dailies in the Sinhala and Tamil languages (see below).

Colombo hosts a number of trade exhibitions and fairs but the fairs attract few international participants. 

Resources

  • Lanka Academic Network                                    
  • Lanka Page                                                  
  • Sri Lankan Embassy in Washington DC (https://slembassyusa.org/)
  • US Embassy Colombo (lk.usembassy.gov)
  • Lanka Business Report                                          
  • Sri Lanka Web Server                                 
  • Economynext

Major English-Language Newspapers

  • Daily FT                                                                       
  • Daily Mirror                                                  
  • Daily News                                                     
  • The Island       
  • The Morning                                
  • Sunday Observer                                                        
  • Sunday Times                                            

Major Sinhala-Language Newspapers

  • Dinamina                                                     
  • Silumina                                                       
  • Lankadeepa                                  

Major Tamil-Language Newspapers

  • Virakesari                                                    
  • Business Journals
  • Echelon                                                         
  • Business Today                                         
  • Lanka Monthly Digest                             

Major Advertising Agencies

  • Grant McCann Erickson                         
  • JWT, Sri Lanka                                           
  • Phoenix Ogilvy                                           
  • Leo Burnett Solutions Inc.                    

Pricing

Price, the most critical buying factor, should be on par with the prevailing market price.  A local agent or distributor can provide helpful suggestions and market intelligence to enable companies to make informed pricing decisions.  Some firms have successfully offered special, low introductory prices on consumer products to gain a foothold in the market and develop customer awareness and loyalty.

Sales Service/Customer Support

After-sales service and customer support are becoming increasingly important factors in selling in this market.  Local companies with comprehensive support services have proved successful over the years.  U.S. firms should consider this factor when appointing an agent.  

Local Professional Services

Accounting is based on the British model and is generally considered active and competent.  The source of accounting standards is the Institute of Chartered Accountants of Sri Lanka and standards are regularly updated to reflect current international accounting and audit standards.  KPMG, Ernst and Young, PricewaterhouseCoopers, and Deloitte are represented in Sri Lanka.

There is also a competent legal profession.  Sri Lankan commercial law is almost entirely statutory.  The law was codified before independence in 1948 and reflects the letter and spirit of British law of that era.  It has, by and large, been amended to keep pace with subsequent legal changes in the United Kingdom.  All agreements made with local partners and agents should be in writing.  In the event any disputes or problems arise, it is helpful to have written records for the purpose of supporting a legal case.  The Embassy’s Consular Section maintains a list of some attorneys in Sri Lanka, a copy of which may be obtained upon request.  The leading law firms in Sri Lanka are also listed in the International Law List published in the United Kingdom.  The legal system, however, is slow and cumbersome, and there are concerns about politicization of the judiciary.

Principal Business Associations

Companies interested in operating in Sri Lanka should contact the American Chamber of Commerce (AmCham) for guidance and networking assistance.  Those companies that do invest in or establish a presence in Sri Lanka should consider becoming members of the Chamber.

The American Chamber of Commerce in Sri Lanka brings together more than 225 leading Sri Lankan and American companies engaged in trade, business, and investment activities between Sri Lanka and the United States.

AmCham Sri Lanka is affiliated with the U.S. Chamber of Commerce, the largest business federation in the United States.  AmCham is also a member of the Asia-Pacific Council of American Chambers of Commerce (APCAC).

AmCham offers several advantages for member companies:

· Networking events and business services

· Lobbying/advocacy efforts

· Industry-specific development programs

· Trade events

· Quarterly newsletter

For more information on the American Chamber of Commerce in Sri Lanka, visit their website at:  https://www.facebook.com/AMCHAMSL/

Limitations on Selling U.S. Products and Services

The Sri Lanka Trade Information Portal (https://srilankatradeportal.gov.lk/) is a one-stop point for information relating to import into and export from Sri Lanka. Implemented by the Department of Commerce, the portal provides an accessible, logical, helpful gateway for traders to access important regulatory and procedural information needed to export, import, and transit.  The initiative is also in line with the government’s commitment to the requirements of World Trade Organization to comply with Article 1 of the Trade Facilitation Agreement.

Imports of beef and pork are now permitted for special purposes including for use in the tourism and hospitality industries.  Sri Lanka reserves the right to prohibit genetically modified (GM) agricultural commodities.

The importation of drugs is subject to the approval of the Drugs and Cosmetic Devices Committee of the Ministry of Health.  In May 2019, the Government of Sri Lanka issued regulations setting maximum retail prices for 60 medicinal product formulations (https://nmra.gov.lk/index.php?lang=en).  The price control applies to all branded and generic versions of drug-formulations in the schedule.  Medical device registration is a cumbersome process and can take anywhere from six months to two years to obtain.  Furthermore, in the event a foreign principal wants to discontinue services of a local agent, the foreign principal must convince the existing agent to provide a no-objection letter.  Without this no-objection letter, the foreign principal cannot appoint a new representative/agent.

The Ministry of Defense controls the import of firearms and ammunition for use by the armed forces, police, and civil security.  Certain military-related or dual-use items are prohibited or controlled.  Radars, night-vision devices, beta lights, armored vehicles, explosion-detection equipment, digital-jamming equipment, infrared illuminators, GPS equipment, and laser designators are prohibited.  Imports of laser/radar range finders and thermal-image devices are subject to Ministry of Defense approval.  Remote-controlled toys are also under license control for public security reasons.  There are restrictions on the import of toxic and hazardous chemicals and pesticides.  Used and reconditioned air conditioners and refrigerators are under license control for environmental protection.

For additional descriptions of import barriers, please visit the Customs, Regulations & Standards Section and the Sri Lankan Sri Lanka Department of Import and Export Control site http://www.imexport.gov.lk/index.php/en/ and Sri Lanka Customs site https://www.customs.gov.lk/.