Poverty, drug lords, violence… All these come to mind when foreigners think about Colombia. Media and pop culture portrayal blurred the reality of the immense opportunity Colombia’s e-commerce market is.
Colombia is not only one of the largest economies in Latin America, but it also has the 5th largest e-commerce market in Latin America. This is HUGE!
The Colombia e-commerce sector grew by 64% between 2015 and 2016, and slowed down to a steady 22% by 2017.
The market will continue to steadily grow with the Coronavirus pandemic forcing businesses to adapt their models into an online format.
Do not turn a blind eye to the opportunities! Read ahead to find out more about the state of the market and resources available to entrepreneurs.
The Player that Disrupted Colombia’s e-Commerce Market
Despite being one of the biggest economies in Latin America, Colombia struggled getting its foot in the door with e-commerce. Problems ranged from the country’s geography, lack of integration with international markets, and people’s lack of trust in online retail platforms.
Let’s explore the player that disrupted the Colombian e-commerce sector and what they did to lead the disruption.
Rappi is an app that allows users to order anything they want from their platform. Founded in 2015, they gained millions of followers in the country. But, what made them so popular?
First of all, they tackled logistic issues such as delivery and payments. Millions of Colombians do not own a bank account. Many online platforms do not allow for payments other than credit or debit cards. The founders realized they could not segregate a big chunk of the potential market. So, what did they do?
They made cash payments available upon delivery. As a result, they democratized access to online purchases to those that do not have a bank account.
Now, 57% of e-commerce users in Colombia pay via cash upon delivery. Other popular payment methods include platforms such as PayU and ePayco. These platforms allow for online money transfers, similar to Venmo.
You have now read about what the company did, but what exactly has the government done to promote e-commerce in Colombia?
Government Initiatives to Boost Colombia’s e-Commerce Market
The Colombian government prides itself on the different initiatives they have taken to grow their e-commerce market.
For starters, Colombia is the only country in Latin America to have a Ministry of e-Commerce. Additionally, they teamed up with the Ministry of Technology to create a nonprofit called E-Commerce Observatory.
The entity’s main function is to measure and monitor the growth of Colombia’s e-commerce sector.
Furthermore, they tried to soothe foreign investors’ concerns regarding illegal activities in the country. To be more transparent, they implemented a mandatory e-invoicing for all Colombian businesses in 2019.
This regulation allows for a more transparent tax collection and financial analysis processes.
Resources Available to You!
There are also resources available for Colombian entrepreneurs seeking to expand their businesses online.
Colombia’s Chamber of e-Commerce (CCCE for spanish) has a wonderful resource available for you and your business to enjoy. They created the virtual platform yaestoyonline.co, which means “I am Online”.
This platform was designed to build up the digital capacities of small and medium-sized businesses across the country.
It is helpful to businesses that want to sell online that have no idea how and want to increase their online visibility.
The online tool offers a free online business directory as well as training content from online market leaders. Furthermore, they have a spection that specializes in women entrepreneurs and micro-entrepreneurs.
There are a series of requirements to access all training videos and materials available in the platform.
Want to Learn More About Colombia’s e-Commerce Market?
Every year, more and more Colombian businesses are adopting an online strategy. Now, you can find almost anything online, compared to a decade ago. As more Colombians gain access to the internet, the e-commerce market will continue to grow.