Colombia ended 2020 with a 30,62% increase in online sales with respect to 2019. That is, during the year of the pandemic –or the beginning of the pandemic– 29 billion pesos were sold in the country through digital means (Internet, applications, others); is or are 7 billion pesos more than the 22 billion that were sold in the previous 12 months.
The first quarter of 2021 also started on the right foot: the increase in online sales during this period was 44,3%, to reach 8,5 billion pesos.
These figures from the Colombian Chamber of Electronic Commerce (CCCE) confirm what has been saying insistently for the last few months: that the pandemic accelerated the processes of Digital Transformation in the world, that electronic commerce is a fundamental strategy for businesses to face and emerge stronger from the crisis, and for people to have an alternative to expose themselves to the risks of contagion from Covid-19. In other words, electronic commerce is an important actor in the country's economic reactivation process, so promoting its development is vital for the economy.
As has happened with remote work - a modality in which lovers of presence have had to recognize that the hours spent sitting in a chair are not necessarily directly proportional to productivity - fears of making transactions in line have been gradually diluted.
And although some of them persist, the fact that the use of cash has been reduced in Colombia is a sign that confidence in digital means of payment is increasing. The 'IX Payment Trends Report', corresponding to 2019, which is carried out each year Minsait Payments, pointed out that 48,7% of Colombians used cash as their main payment method. And this already represented a decrease of 13% compared to the 2018 figure.
El 2020 report realize that 61% of Colombians decreased the frequency with which they use physical money. The trend is similar in the rest of the world, where the reduction in the use of cash stands at 50%.
Of course, this lower use of cash - to which people, in fact, have expressed having developed a certain aversion for hygiene and health reasons - has been to the benefit of the use of digital payment methods, such as applications, virtual prepaid cards and online transactions.
Figures from the Minsait report for 2020 cited by The Republic state that the use of these means of payment has increased 70%, followed by mobile wallets, while 60% of Colombians declare that they buy online more frequently as a result of the pandemic.
An increasingly active ecosystem
In addition to the above, the digital payments ecosystem continues to expand to more and more products and services, many of which were already popular before the arrival of Covid-19 in the country, but which soared as a result of the pandemic. For example, Mercado Pago and Taxia Life announced in March an alliance whose objective is to incorporate QR code technology as a means of payment for taxi services. The system is already operating in more than 1.000 vehicles in Bogotá, Bucaramanga and Manizales, and plans are to reach 20.000, also in cities such as Medellín, Barranquilla, Armenia, Cúcuta, Ibagué, Florencia and Yopal, among others.
Other figures also show the growing acceptance of electronic transactions in the country: during Mother's Day 2020, when the pandemic had only lasted a couple of months, Mercado Libre Colombia reported a 240% increase in sales made by the platform; While waiting for the 2021 figures, the expectation was to surpass those numbers.
The truth is that during the first quarter of 2021, the Mercado Libre operation increased its active user base by 61,7% (reached 69,8 million), transactions for more than 6.100 billion dollars were carried out (77,4, 2020% more than in the same period of 1,400) and net income reached more than 111 million dollars (an increase of XNUMX.%). Although these are general figures, not only for Colombia, they show a trend in which the country is keeping pace.
For its part, Domicilios.com –recognized delivery company that has just joined with iFood– pointed out that during 2020 received 70% more payments online than in 2019, which is still an interesting figure if one takes into account that a large number of the establishments it provides its services to in Colombia offer the alternative of payment in cash on delivery.
“In our app we evidenced that being an opportunity for thousands of Colombians to find what they needed when they needed it most during the pandemic, we also grew in the adoption of credit and debit card payments by our customers, and this is due to because we have more than 15.000 partner businesses and we facilitate all electronic payment alternatives in more than 21 cities and 20 municipalities where we have a presence in the country "said Felipe Ossa, managing director of Domicilios.com.
And the examples are not exhausted: during the first day of the calendar of special online sales events, the Hotsale held between March 24 and 26, there was an increase of 9,02% in sales compared to 2019. Another piece of good news has to do with the fact that The trend is that people depend less and less on personal computers to carry out transactions: Álvaro Umaña, Manager of Corporate Affairs of the CCCE, revealed that purchases through mobile devices continue to lead the Hotsale, with 85,05%, followed by computers and tablets, with 11,43% and 3,52%, respectively.
Other interesting figures of the day were the following: there were 560.512 visits during the 3 days of the event; women were much more active than men with 70,02% of participation of them against 29,98% of them. The categories that were most searched during the discount day were Technology (25,95%), Household appliances (18,72%) and Travel (13,20%). Among others with a large number of searches were Fashion, Home, Children and Sports.
In the age distribution, people between 25 and 34 years of age carried out almost 25% of the transactions, followed by those between 18 and 24 years (19,80%) and then those between 35 and 44 years (with a close 19,03%).
"It is very important for us to see how the online channel continues to be among the first options for consumers and users when it comes to buying both luxury goods and basic necessities and, above all, taking advantage of the fact that these can be discounted. Also to see how a category such as travel and tourism returned to rebound and be in the top 3 of the most sought after, contributing a very important growth in this sector that was hit so hard last year "declared Umaña.
Another example? During the third Day without VAT, which was held in Colombia on Saturday, November 21, 2020, more than 477.000 million pesos were sold, almost 8 times more than what is sold on average on an average Saturday.
The challenges posed by the current landscape
An increasingly active ecosystem, such as the one that occurs in Colombia and Latin America in general, poses challenges that must be faced in order to continue opening the way to electronic commerce in Colombia. The CCCE highlights the following:
- Limited access to the financial system: Financial inclusion is decisive for the proper development of electronic commerce and other economic activities in the country. One of the most used means of payment in ecommerce is the credit card and in 2019 only 27% of the adult population had acquired this means of payment, which impacts digitization processes.
- Little coverage in national connectivity: The panorama in the country is marked by a large gap between the main cities and remote regions (such as Vaupés, Vichada, Amazonas, Guaviare, Guainía, Putumayo, San Andrés, La Guajira and Cauca), which by 2019 had 5 or less accesses for every 100 inhabitants.
- Improve consumer confidence for digital transactions: A large part of the Colombian population was encouraged to buy for the first time through a digital platform, without neglecting concerns about the security of personal and banking data when making online transactions. Although the pandemic represented an opportunity to simplify the buying and selling processes, the issue of security has represented a lack of confidence to attract new users.
- Logistics: This issue continues to be one of the most important challenges for electronic commerce. High costs, delays in deliveries and a new more demanding consumer focused on practicality, are some of the aspects to strengthen. Today, people value faster delivery alternatives and contact with whoever carries their product to rate their experience, and this is the great challenge: responding to consumer expectations.
On these challenges, María Fernanda Quiñones, executive president of the CCCE, points out several things. The first of them, that although progress has been made in the connectivity issue, there are still efforts to be made in fixed and mobile connections: According to the Confederation of Chambers of Commerce (Confecámaras), in 65% of the departments of Colombia the Internet subscription is 10%. These deficiencies prevent digitization and the approach of thousands of Colombians to the opportunities offered by electronic commerce ”.
The executive adds that for the growth of electronic commerce to be sustained and to continue contributing to the competitiveness and economy of the country, once the situation is over, the pending areas must be strengthened: "We must provide tools to make Internet marketing a pleasant and safe experience, and work together, as a society, to articulate the factors that will lead us to a digital and inclusive economy", concludes María Fernanda Quiñones.
Either way, during the event 'E-Commerce: one-click reactivation, carried out by Impacto TIC, María Fernanda Quiñones highlighted that one of the positive situations that have arisen during the pandemic is that Colombians have begun to make more purchases related to basic goods than to luxury items. In fact, the ticket Average (the value paid in each transaction) fell from 204.365 pesos in January 2019 to 134.750 pesos in December 2020, which in the face of the increase in transactions, shows in some way that online purchases are already more involved in the day-to-day of the country.
An eye on safety
While the figures show that trust in digital payment methods has increased, concern about the security of online transactions has decreased, but continues to carry weight among users. A report by Eset, a leading company in the world of computer security, identified as 'Global financial technology (FinTech) research' notes that only 29% of Internet users feel 'very safe' when shopping online. This, despite the fact that 61% of those surveyed transact more frequently now than before the pandemic. The number of people who do not feel 'safe at all' or 'particularly safe' reaches 16%.
Yes, 69% of those surveyed say they could identify a fraudulent email (phishing) try to imitate one of the online stores that you usually use.
The study was carried out with information from 10.000 consumers in the United Kingdom, the United States, Australia, Japan and Brazil, which somehow makes it clear that fears are not an exclusive phenomenon of the Colombian user. The good news is that the increase in online sales seems to be here to stay. 40% of consumers expect to continue shopping online even more now than before the pandemic.
"Covid-19 has limited our personal interactions in a very significant way. Therefore, no one is surprised by the rise of online commerce –Affirms Ignacio Sbampato, Business Director at Eset–. However, what has surprised us is that this movement will foreseeably continue even when restrictions on mobility have been lifted. With this in mind, we are concerned that less than a third of shoppers will transact with confidence. If we do not improve awareness of security measures when shopping online, users will continue to consider themselves at risk when making payments. It is essential that both buyers and businesses keep data securely throughout the purchase process ».
Carlos Gómez, SonicWall Sales Engineer for Latin America, assures that one of the most important challenges of electronic commerce is to give the client confidence to continue buying through online platforms, an aspect in which security is vital.
However, he recognizes that when it comes to thinking about it, some companies see it as a secondary objective. But just as when putting a physical premises a lot is thought about security, electronic businesses also have to put 'good locks'. In this process, says Gómez, security should not be an obstacle for sales to be successful.
“Sometimes small and medium-sized companies see security as something that can be very complex, but you don't have to start from zero. The important thing is to get advice from companies specialized in this area and to be able to have the guarantees that sales will have the appropriate elements in terms of security ", Affirm the SonicWall spokesperson.
Either way, the concerns are not unfounded, especially considering that by 2025 the global payments market will reach $ 2.000 trillion, but losses of $ 200.000 billion are expected as a result of fraud. This, according to the report 'Fraud Prevention: The Anatomy of the New Scammer', conducted by BPC Banking Technologies. And according to a Nilson Report cited by BPC, Card crimes, especially non-present payment cards, will represent global losses of $ 32.000 billion by the end of 2021.
“Faced with this phenomenon, there is a need to share knowledge to increase awareness among the parties involved in the online payment business. Innovative risk management solutions allow data from different transactional channels to be analyzed; thus it can be mitigated efficiently in terms of cost and time through the integration of high-tech tools through a comprehensive strategy ”, says Santiago Egas, Executive Vice President of BPC Banking Technologies.
But beyond the use of technology, the awareness that Egas refers to is fundamental. 69% of people who could recognize a fraudulent message cited by Eset say that it is on the right track, but the idea is to educate users so that this number is increasing.
How to 'get on the bus' of e-commerce?
Implementing an ecommerce strategy is not a blow and bottle affair. Therefore, last Thursday, June 3, Impacto TIC hold the event 'E-Commerce: reactivation at a click', a space for reflection on the impact and importance of electronic commerce in the last year. Experts from different Colombian and international companies and organizations participated in the event, who spoke about the fundamental points that must be taken into account in the development of strategies to enter the world of online sales.
When asked what makes an electronic commerce a winner ?, Luis Beute, Vice President of Sales for Latin America and Europe at Fastly, affirms that it is a mistake to measure the profitability of the electronic commerce channel as something independent from the rest of the company. "Omnichannel has been changing and today, to assess whether their e-commerce strategy is successful, many companies are already looking at the total impact it has on the company."
Emilia Ramírez, business director and co-founder of Nilo Business, a company specialized in consulting for the development of digital businesses, pointed out that beyond making many sales, one of the most important indicators is the buyback. That is to say, that the client does not go and buy only once, but that their experience is so positive that they return to the establishment in the future.
“We see many companies making huge investments in marketing, in advertising, in influencers, in social networks to bring in new clients and new clients, when the secret is in the buyback. […] And the buyback is achieved if I have a good user experience, if my data was processed securely, if I do not have friction processes in the logistics of the last mile… », said the director of Nilo Business. He added that not only does customer satisfaction lead to buyback, but the satisfied person will influence their circle.
Douglas Montalvao, general manager of Adobe Experience Cloud for Latin America, affirms that today, in the virtual scenario, the product and the price are commodities. «The great differentiator that an e-commerce has today are the digital experiences that it can generate, the experiences that go beyond the moment of sale. Because as a consumer, I see my [buying] cycle as something that goes from learning about the product, buying it, paying for it; when paying, understand that my data is safe; that they deliver the product to me on the date they promise me, and the after-sales service. A big mistake that we see many times is thinking that it is enough to be digital. Customers today are already much beyond that, for them being digital is the basics. You have to think about the differentiated experiences that are delivered at all stages [of the purchase].
Montalvao affirms that the relationship between the business and the customer does not end when the pay button is pressed, but rather that this relationship begins at that moment. And he highlights that in terms of customer experience, one of the best things that can be achieved is surprising them with unexpected details, which can be a simple recommendation, a simple return process and without conditions, an adjustment in the price in favor of the customer. ...
A point on which the participants in the event of Impacto TIC is that the client must be in the center: “[The strategy] can start by designing the value offer around the consumer. Many businesses in the 80s and 90s were very successful developing their value offerings around the product. But digital, just as it opens up competition, opens up possibilities. That I have the possibility of accessing an electronic commerce from anywhere in the world with one click challenges those who always bought the product, because now they have to offer me a 'wow experience' ”, affirms Emilia Ramírez. This occurs throughout the entire experience.
Ramirez advises companies that are beginning to surround themselves with good strategic allies, who already have the knowledge and experience, instead of starting to 'invent the wheel' from scratch.
Luis Beute, from Fastly, concluded: «The customer at the center of everything; an experience not only from the electronic portal, but the entire value chain, to the after-sales service, designed around the customer. You have to look at the entire ecosystem.
Over the course of the next few weeks, Impacto TIC will publish content in which the topics of the event will be expanded and others related to the e-commerce. So we invite you to relive the details of the broadcast.
Although the event is aimed at companies that want to take advantage of the world of electronic commerce, topics such as customer experience will be on the agenda, so they can also participate in the conversation on social networks, using # ReactivationAUnClic.
And to involve users now, we share this infographic made by Mercado Libre, on the occasion of Safe Internet Day (February 8), with recommendations to know if you are making a safe purchase online.
Main image: rawpixel.