According to data from different experts, between 2019 and 2020, e-commerce in Central America grew at a rate of 40%. This means that sales generated by this type of business in the region have reached more than $3.7 billion in the last two years alone. Jason Simon, an expert on Central American markets, takes a closer look at the rise of e-commerce in the region.
Although there is a wide range of products available for online shopping, fashion and technology products are unanimously the most lucrative online shopping categories for Central American countries. Guatemala and Costa Rica have been among the top 15 countries in Latin America in terms of e-commerce revenue for the past few years.
Panama, in turn, was the economy whose online segment accounted for the largest share of total retail sales. According to Simon’s estimates, fashion-related online shopping generated revenues of some $156 million in Panama in 2020, while in Costa Rica it reached $344 million. In the latter, electronics was the second most purchased item online in 2019, an interest also shared by Guatemalan consumers who, according to a survey conducted a few years ago, mainly looked for this type of product when shopping online. line.
“There is potential for e-commerce to continue to grow in Central America,” says Simon. “With approximately 50 million inhabitants and more than 60% of this population connected to the Internet, Central America has the potential to reach a large number of consumers online. In fact, the figures seem to indicate that the purchase of products and services online is beginning to supplant physical purchases.
Yet, the surge in the use of e-commerce services requires much more support to increase digital transformation capabilities in the region. According to the expert, Central America and the Caribbean will undoubtedly have the potential to generate a large number of online consumers in the years to come.
The key to consolidating the growth of e-commerce and stabilizing it is to effectively and efficiently connect the front office with the back office of businesses in the region, and strengthen cybersecurity strategies so that people can shop without worries. Simon indicates that purchases of mass consumer products through digital platforms in Central America such as app purchases, WhatsApp, phone and web pages, although slowing its growth by -7.2%, by 2021, continue win over buying households, reaching 2,216,000 buyers. This figure represents a growth of 19% compared to 2020, being an activity of 85 million dollars in Central America.
Costa Rica is the country that reaches the highest penetration and where it gains the most households in the last year. Four out of ten Costa Ricans purchase products from the basket through e-commerce. 44% of purchases are made via WhatsApp and 33% via websites or applications of supermarket chains and hypermarkets (not pure eCommerce).
“The growth of e-commerce purchases in mass consumption represents in Costa Rica 33% being one of the countries in the region with the highest growth”, indicates Simon. “Among the categories most purchased by Costa Ricans are the beauty sector, perfumes and among foods rice, cheese, milk, sausages, tuna, soft drinks, among others.”
Honduras is the second country in the region with the largest number of buyers, contributing 84% of the lost value of e-commerce for Central America, followed by Guatemala, which contributes to the contraction of 11%, decreasing by 9.8% in value, but is the third country with the most digital buyers. Unlike Costa Rica, the highest percentage of purchases are made over the phone. There, $8 of every $10 of product purchases in the cart are left in this format, including in the purchase of bottled water, corn flour or dough, toilet paper and soft drinks, among others.
“On average, 53% of Central Americans who use these means feel satisfied with the shopping experience, in particular the follow-up of preventive measures against contagion, and are satisfied because the products arrive in good condition”, underlines the specialist. There is no doubt that Central America is becoming a highly digitized region and this can be reflected in the movements that e-commerce has started to have in recent years.
About Jason Simon
Jason Simon is a fintech and digital payments expert who got involved with cryptocurrencies when they were first introduced. He is enthusiastically following what is happening in the changing world of finance, excited about the prospects that digital currencies offer to global consumerism. When he’s not helping advance the digital payments space, he enjoys spending time with his family and improving his community.
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