Colombia cross-border e-commerce: huge potential in the early market

As the fourth largest economy in Latin America, Colombia’s e-commerce market is in the early stages of development, bringing abundant opportunities to cross-border e-commerce. From 2015 to 2016, the Colombian e-commerce market experienced explosive growth, with a growth rate of 64%. As of 2017, there were approximately 12 million online shoppers in Colombia, completing more than 87 million online transactions. According to Statista, e-commerce transactions in Colombia reached approximately $4.8 billion in 2017, a 22% increase from the previous year. In addition, the Colombian Electronic Commerce Association (CCCE) reported that e-commerce output accounted for 5.61% of GDP in 2017.

The increasing number of mobile devices and network coverage

In 2019, the number of Internet users in Colombia reached 34 million, and major cities across the country have achieved 3G network coverage. In order to cope with the rapidly growing demand for mobile Internet services, the Colombian government is actively promoting the construction of 4G network facilities. According to predictions from the Colombian telecommunications department, by 2020, the number of devices using mobile Internet across the country (including mobile phones and tablets) will reach 400 million.

Broadband penetration rate and distribution

Colombia is the third largest country in Latin America in terms of broadband subscriptions, after Brazil and Argentina. The country has close to 4 million fixed broadband subscribers and more than 2 million mobile broadband subscribers. However, despite high overall broadband penetration, infrastructure remains weak in most of Colombia’s 32 provinces, with fiber broadband mainly concentrated in urban areas.

The rise of online banking payment methods

In terms of payment methods, 57% of Colombian netizens prefer to use credit cards to pay for online shopping. Supported by government policies, domestic mainstream banks have cooperated to launch a localized online banking payment method – PSE payment. Since March 2014, the monthly transaction volume completed through PSE has exceeded 2 million, becoming the main choice for Colombian consumers to pay for online shopping. It is worth noting that after PayPal announced its withdrawal from the Colombian market in 2015, many users turned to other payment channels such as PSE payment. For Colombians who are accustomed to paying via bank transfer, PSE payments fit perfectly into their payment habits, even if it means they may have to go to a distant bank to queue up for business.