Colombia is steadfast on the trajectory it has drawn to position itself in the ranking of top Latin American countries in terms of e-commerce sales growth rate (24.5% increase in online shopping in 2018). Since we last reported, numbers have been increasing towards an even more interesting scenario.
Colombia’s Economy Is Gaining a Momentum
If the projections announced in 2017 predicted a favorable scenario, this year the International Monetary Fund (IMF) stated that the country’s recovery is gaining a momentum. Indeed, there are some basic indicators which stress it:
- The gross domestic product (GDP) corresponded to USD 333 billion in 2018, which in turn corresponded to an increase of 2.7% versus the previous year. It is projected to grow 3.6% in 2019.
- The financial inclusion has improved, as the income inequality been decreasing across regions and the account ownership has increased significantly over the past years;
- The GDP growth will be supported by a strong private consumption and an investment rebound;
- The country is now a full member of the OECD, having been invited, in May 2018, to become the 37th member of the organization.
It’s also important to mention that the services’ sector made the largest contribution to the country’s GDP in 2017 with a share of 57.93% (when compared to the agriculture and the industry sectors). It’s in this macroeconomic context that Colombia’s e-commerce is moving forward.
An Updated Snapshot Regarding Colombia’s E-Commerce Status
In a country with 49.7 million inhabitants (as of January 2019), around 34 million are internet users – this fact represents a 68% penetration rate. There was a 9.7% growth of internet users between January 2018 and January 2019, which corresponds to more than three million new users.
When it comes to revenues sales, the Colombian e-commerce registered USD 6 billion in 2018, and it’s estimated to reach USD 8 billion in 2022. Clothing and footwear, consumer electronics and entertainment items (such as books, music and games) were the mostly bought products online in 2017. As for e-commerce retail sales, the product’s categories with the highest estimated sales growth rate are regarding house improvement & gardening, followed by home & furniture items and video games.
Based on these data, one can draw a brief picture of the Colombian e-shoppers’ purchasing behavior and preferences.
A Brief Look at the Colombian Digital Buyers’ Behavior and Preferences
As previously mentioned, fashion & footwear and entertainment items are what Colombians prefer to buy online. Indeed, in 2018 the most visited e-commerce websites are those related to shopping, travel and online paid services. They were accessed mainly through desktop devices: shopping websites had 66.1% of digital buyers, travel had 29.4%, and online paid services 26.9%. However, 70% of pre-purchase research made in 2018 was through a smartphone.
Regarding the distribution of online shoppers by genre in 2018, 16.17 million (52%) were women, versus 14.93 million (48%) men. In 2017, Colombian online shoppers were mainly in the 25-54 age group (63.5%), followed by the 18-24 age group (19.9%). Concerning the preferred payment methods, local credit cards and cash-based payments, such as Baloto, are a popular e-commerce trend in Colombia.
Reach the Real Potential of Colombia through Local Experts
Colombia is one of the selected Latin American emerging markets (along with Brazil, Mexico and Argentina) with the most favorable forecasts regarding e-commerce. With the evolution of e-commerce practices, consumers will tend to spend more money online, across all available product categories. As we presented it earlier, there’s no doubt about Colombia’s potential market, and international companies should seize this opportunity to expand their businesses into Latin America.
Despite being attractive, e-commerce has its challenges, especially in a fragmented region such as Latin America. Therefore, it is recommended for merchants to seek a partnership with a payment aggregator, such as BoaCompra, that can help them to decipher the nuances of each LATAM market, as well as to deal with the processes underlying online transactions, including checkout optimization and the integration of local payments.