Current Status of Ecommerce in Colombia, Why Invest There?
Over the past few months, several of our customers have been asking and requesting information about the economic growth of Ecommerce and market maturity in South America. Their main objective is to understand a bit about the sales growth they could achieve with their own brands and products, the challenges to face, and most importantly, which categories they could participate in.
One interesting aspect of South America related to this request is the constant mention of Colombia. I can understand that it is an ideal destination because it could be considered a politically stable country, and both the language and culture are not barriers to reach an agreement. Additionally, and as a curiosity, at Lievant, we opened our offices and continued our professional expansion in this territory because it feels quite like Mexico.
For all the reasons mentioned, I took on the task of summarizing some of the most outstanding points about this great country regarding Ecommerce, starting from the global to the specific.
Global Overview
If we compare digital sales in 2023 with the top two global leaders (Figure 1), we can observe that Colombia sales around $0.15 trillion USD, or in other words, $15 billion USD. The difference is enormous compared to China and the USA.
When compared to Mexico, we can see that it is a little more than a third. Many might conclude that it is too small, but when we talk about $15 billion USD in 2023 in a country where the Ecommerce industry is growing and continues to receive investments to keep increasing, this is where it becomes interesting.
Figure 1
Ecommerce Sales Compared to Other Countries
Focusing directly on Colombia, we can observe that the growth it has experienced in recent years has been remarkable, exceeding double digits. It is estimated that by 2024, the percentage will be between 8% and 11%, closing at approximately $17.03 billion USD.
Below is the following table, Figure 2, where you can see the year-on-year growth percentage and sales in billions of USD. Information taken from Statista.
Figure 2
Year-on-Year Sales and Growth Percentage in Colombia
(Mantilla, 2024)
Internet Penetration and Ecommerce Buyers
Once we focus directly on Colombia and understand that the Ecommerce industry is quite lucrative with its nearly $17 billion USD forecasted for this year, what we need to analyze is the infrastructure in terms of internet access and the number of buyers.
According to Statista, it was reported that in 2023, internet access among the population of this nation is approximately 40 million, corresponding to nearly 77% of the population. These figures are interesting considering that Colombia has nearly 52 million inhabitants. Another important point is the number of users who browse from their mobile phones, which is around 35 million.
Moving on to more specific data regarding the population in the Ecommerce industry, it is estimated that by 2025 the number of users actively making digital purchases will be almost 23 million, and from 2028 onwards, it is estimated to be nearly 30 million.
These figures are very valuable because they indicate an economically active population that will continuously make digital orders. Why is this interesting? Because we are talking about a population that is willing to buy, with a more mature consumer profile, and we avoid having to evangelize about the importance of Ecommerce. These buyers perfectly understand the value of acquiring their products or services digitally and do not require further convincing.
Most Important Categories and Subcategories in Ecommerce
It is important to analyze the categories that are currently in vogue. This will help greatly in defining a more appropriate strategy and understanding whether we are landing in a blue ocean or a red ocean. As a recommendation, I suggest reading the current behavior of Colombia versus Mexico or the USA to try to predict changes in the coming years.
In the next chart, Figure 3, obtained from We Are Social, we can see that there are two categories that as of January 2024 are generating billions of dollars: number one, electronics, and in the second position, the fashion industry. Both are very relevant and practically exhibit the same behavior in countries like Mexico, Brazil, the USA, etc.
Figure 3
Sales by Category in Ecommerce, Year 2023
(Mantilla, 2024)
If we zoom in on each of these general categories and divide them into their subcategories, we can see that Colombians have a greater interest in buying clothing, followed by footwear. In third place is the purchase of food and beverages, and in fourth position, we find everything related to electronics. Below is the full chart obtained from Statista.
Figure 4
Consumption Level by Ecommerce Subcategories, Year 2023
(Statista, 2023)
Conclusions
With its potential $17 billion USD forecast for 2024 and a digitally active purchasing population of nearly 23 million by 2025, Colombia can be considered a highly attractive country for investing in the Ecommerce industry. Additionally, both the growth expectations for sales and consumers in the coming years are quite positive.
Another important point is the capitalization of categories; we observed that the fashion industry in general and electronics are well-positioned, leading to higher purchase volumes and a greater frequency of repeat purchases.
For the rest of the categories, the fact that they are not yet generating billions of dollars does not mean they are lower options. On the contrary, their growth is on the way, and they are highly recommended industries to enter. I would consider them blue oceans, which is very helpful for experimenting, launching, testing, and positioning oneself.
Comments
My name is Andrés Jauregui, and I am an Ecommerce specialist at Lievant Studio for North and South America. Feel free to contact me to brainstorm ideas, plan strategies, and launch business models applicable to each country and platform.
Additionally, I am an expert in marketplaces, specifically Amazon MX, USA, Canada, unified European accounts, and Mercado Libre Mexico and South America. With my team, we have launched over 250 projects and hope to assist you.
Mexico Cell: +52 4775517289
Email: [email protected]
Bibliography
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CHUBB. (2024). CHUBB. Retrieved from Ecommerce: Conoce cuáles son las tendencias en Colombia: https://www.chubb.com/co-es/pymes/articulos/ecommerce-tendencias.html
ICEX. (2023). Informe e-País El Comercio Electrónico en Colombia. Bogotá: ICEX España Exportación e Inversiones, E.P.E.
KEMP, S. (2022, Febrero 15). datareportal. Retrieved from DIGITAL 2022: COLOMBIA: https://datareportal.com/reports/digital-2022-colombia
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Mantilla, R. (2024, Junio 20). enviame. Retrieved from ECommerce Colombia: La Guía Más Completa Del Mercado [2024]: https://enviame.io/co/ecommerce-colombia/
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