In this article, we’ll break down why selling online in Colombia is such an exciting opportunity for online businesses in 2021
If you’re planning on expanding your ecommerce business into Colombia in 2021, you’ve come to the right place. And if you aren’t planning on selling in Colombia – you should be!
In this article, we’ll break down why the Colombian ecommerce market is such an exciting opportunity for online businesses in 2021. We’ll talk you through what you need to know about Colombian online shoppers, and, most importantly, we’ll give you our top three tips on how to make sure your newfound customers can actually pay you for your products or services.
So, what’s the big deal about the Colombian ecommerce market?
Colombian shoppers may be late arrivals to the ecommerce scene, but they’ve been making up for lost time in 2020. Local news outlet Portafolio reports that the Colombian ecommerce sector grew by nearly 10% between March and April this year, as customers moved their purchasing online in response to the COVID-19 lockdowns. This makes Colombia the fastest-growing ecommerce market in Latin America.
Even without the boom in online sales triggered by the global pandemic, Colombia would be an exciting opportunity for digital businesses. Colombia has a steadily growing population, relatively stable GDP growth, a widening middle class and increasing economic stability. 22 million Colombians are expected to be digital shoppers by the end of 2020, and the market is forecast to grow substantially over the next few years, with a predicted value of 6-8 billion USD by 2022.
In other words, if you’re thinking of expanding your online business into Colombia at some point, now would be a very good time.
Colombian digital consumer behavior
Over 40% of the Colombian population are buying products and services online, making Colombia the 4th largest ecommerce market in Latin America. Colombian digital shoppers are 58% female, and typically on the younger side – 25 to 40-year-olds are the largest market sector. A report by Euromonitor found that multimedia products, home furnishing, fashion and food were the biggest sellers in Colombia last year. During the lockdown period, online sales of headphones, games, beauty products and game consoles also increased rapidly.
What you need to know about selling online in Colombia
If you’re planning on selling online in Colombia, you’ll need to make sure that your new customers are able to pay you. Here are our top 3 tips for converting more digital sales in the Colombian market:
- You must offer local payment methods.
Colombian online shoppers will expect to be able to pay with their usual payment methods via your digital checkout. In particular, over 85% of Colombian consumers trust Baloto Electronico, a cash-based payment method via vouchers that can be used in physical stores and online. You’ll need to be able to process payments via Baloto to be able to capture significant market share in Colombia.
You’ll also need to be able to process payments locally, and then settle outside the country – or establish a local entity. Many Colombian credit cards are not enabled for international purchases. If you’re not sure how to do this and would like to avoid setting up an office in Colombia, please feel free to get in touch – our payments experts will be happy to advise you.
- You need to optimize for mobile purchasing.
Smartphones are becoming ubiquitous in Colombia, and this is a key driver for the rise in online sales, according to market research agency Think Now. While most Colombians are still doing their online shopping on laptops or computers, 14% of online purchases are made on cell phones, and that percentage will likely increase in the coming years. So, to be ready for long-term sales performance in Colombia, make sure your online checkout is mobile-responsive. A few questions to ask yourselves (or your web designers), based on Comscore’s mobile hierarchy of needs:
- Will my customers feel like their mobile purchases are secure?
- Can they still see product details on their mobile?
- Is navigating the checkout easy on mobile?
- Is it easy to input buyer details?
- Your customers will expect to be able to pay in installments.
Colombian consumers frequently pay for products in monthly installments, and they’ll expect your business to offer this as a payment option, especially for larger purchases. This can be challenging for international businesses, as payment plans usually require collaboration with local banks. Fortunately, we can help you out there – we’ve partnered with major local financial service providers so you can offer your customers the payment methods they need, without the hassle of setting up a local branch. To see our full list of local partners, click here.
At PrimeiroPay, we help international companies expand into Colombia and other Latin American markets, quickly and easily. To find out how we can help your business make more money in Latin America, click here to schedule a free consultation call with one of our payments experts.