E-commerce in Colombia has seen rapid growth and rapid change over the last few years. We look at everything international e-commerce merchants need to know to tap into this evolving market.
Introduction
Colombia, as anyone who has visited in the last few years will tell you, is a rapidly changing country. A recent study by the Colombian Chamber of Electronic Commerce (CCCE) reports that 9 out of 10 internet users above the age of 15 now engage in some sort of e-commerce activities. As we have written previously, this is translating to an ever-growing e-commerce market in the country. In total, Colombia saw a 27.1% increase in online shopping in 2017, with e-commerce making up 5.61% of the country’s GDP. But what effect is this growing market having on the shopping habits of the population? We look at the changing ways Colombians are selecting and paying for products online.
What do Colombians want to buy online?
The first step to understanding the rise of e-commerce in Colombia, is in understanding what Colombians are looking for online. The breakdown of Colombian online purchases is something that we have looked at in detail in previous articles. Multimedia products were the most purchased item in 2017, followed closely by home and furniture items, house and garden improvements and food and beverages. Video games also show huge potential for growth, with a projected increase in market size of 815.5% from 2017 to 2022. However, it is important to note that growth projections for each category are not the same across the board. House and garden improvement is projected to show the largest growth by 2022, with categories like fashion and consumer electronics remaining a similar size.
Importantly, Colombia is also seeing a rise in the use of mobile phones to make online purchases. A 2018 study reported that 67.8% of Colombians intend to use mobile or e-wallet payments online in 2019.
How are Colombians making their purchases online?
This move towards online shopping is having a knock-on effect in the ways Colombians pay for items. Recent years have seen a rise in the use of debit cards, with 2 debit cards existing for each credit card in 2017. Additionally, the average ticket size for debit and credit purchases in Colombia far outperform those of its more affluent LATAM neighbors like Brazil and Chile. In 2017, most countries making up the LATAM region had a similar debit card ticket value of 28 USD, however in Colombia that figure is 43 USD. For credit cards this figure is 88 USD, outstripping its closest rival Chile with 77 USD. It may be that this high-ticket price is a result of the purchases Colombians make online. Financial (17%), retail (15%) and government (13%) are the three highest performing categories for Colombians. This is different from their neighbors, Chile and Brazil. Brazil shoppers prefer health/ cosmetics & fragrances (16.4%), and fashion & accessories (13.6%). Chile, conversely, spends most on travel & tourism (29%) and financial services & real estate (24%). This distinction makes it likely that the high-ticket price could be as a result of different online spending habits.
While debit and credit cards are the most popular payment methods online there are interesting variations in payment method by category of purchase. As evidenced above, cash payments are still vitally important to the online shopping payment infrastructure. Efecty, Baloto and Gana are three of the most popular cash payment systems. As such, it is essential for international e-commerce merchants to provide a number of different methods of payment to properly capture the Colombian market. Partnering with a local expert, like BoaCompra, will ensure you offer the best checkout experience for your customers.
Conclusion
The Colombian e-commerce market is both rapidly growing and changing. As such it represents an interesting prospect for the international e-commerce merchant. With large debit and credit ticket sizes and growing market segments, it also outperforms many of its LATAM neighbors. However, it is important to understand, and cater to, the various ways Colombians pay for items online, in order to truly have an impact.
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