Over the past 20 years, the Andrean nation of Colombia has seen its population rise steadily from just over 39 million in 2000 to over 49 million in 2020, while also experiencing a relatively stable growth in GDP since the turn of the century.
More economic security and a widening middle class, coupled with nearly 60% of Colombians connected to the internet and the entry of new innovators in the space, has helped spur significant growth in the country’s e-commerce market as well.
The last decade in particular has witnessed a boom in Colombian e-commerce. Although the percentage of the total population that has made purchases online remains low (7.9% as of 2018), there was a 259% increase in the number of people who purchased items online from 2012 to 2018, according to the Colombian Chamber of E-Commerce (CCCE). And Colombia is currently the fifth largest e-commerce market in Latin America, according to venture capitalist Nathan Lustig.
And the trend toward a wider adoption of e-commerce persists. According to a study published by the CCCE, approximately 82% of Colombians over the age of 15 are now online every day of the week while technology continues to penetrate the market, which smartphones being the first means by which users in the country transact online (93%), followed by laptops (36%), desktops (28%), smart televisions (16%), and tablets (11%).
Since the first case of COVID-19 in Colombia was announced by the Ministry of Health on March 6, experts have been keeping a close eye on the ecommerce sector to monitor its effects. Here’s a look at what we know so far.
What’s been the impact of COVID-19 on Colombian e-commerce?
The outbreak of the novel coronavirus has had a significant impact on ecommerce — and the broader retail industry worldwide — and Colombia is no exception. As Colombia moved swiftly to shut down international travel and mandate shelter in place orders across the country, buying habits were impacted.
A recent study released by Argentine e-commerce giant MercadoLibre which is active in the country, revealed that four out of 10 Colombians had changed their purchasing habits through e-commerce as a result of COVID-19.
And in Colombia’s capital, Bogotá, online messaging and digital home services have increased by 28%, a higher figure compared to last March.
As in other countries around the world, certain sectors are seeing increases in online sales, while other sectors, such as travel for instance, are taking a hit.
For example, searches related to health protection products have increased by a factor of 11 in Latin America. According to MercadoLibre, in the last four weeks, the region saw a reported increase of 190,000 searches related to products in health categories such as face masks (10 million), antibacterials (3.5 million), alcohol (8.5 million), thermometers (1 million), among others.
Purchases in sectors related to basic necessities such as groceries, personal hygiene products and medications have also increased. In Colombia, the CCCE reports an 86.5% increase in online purchases of sports equipment and a 26.9% increase in tech sales online, a trend that could be attributed to people looking for ways to remain active and occupied as they practice social distancing.
Meanwhile, drastic plummets in Colombian online sales were recorded in sectors such as tourism (-90.5%), airlines (-87.6%), and real estate (-73%).
Overall, online sales in Colombia dipped by 47% from February to March, with a 29% increase in sales in the first week of April, a fluctuation attributed to the initial public uncertainty of the capacity for delivery services to operate during the outbreak, according to CCCE, a problem that they say was remedied by further explanation and clarity given on behalf of the government.
E-commerce companies from around the country have been looking to meet changing consumer behavior, however it’s still been difficult to make exact predictions for this market. We hope these most recent findings can support e-commerce businesses to better navigate through the times of COVID-19 and best prepare for challenges.
This article was authored by Sergio Granada, CTO at Talos Digital
This article includes a client of an Espacio portfolio company.
