E-commerce grows 40% in El Salvador

E-commerce through different strategies among the most common B2B, B2C, has become a global boom in which El Salvador is no exception. According to the magazine Strategy and Business “trade through the Internet grows by leaps, opposite the traditional trade in physical; some dare to calculate to be 40% for the first and the remaining 60% for the second.” [1] . The lack of regulations in El Salvador in terms of e-commerce and in some cases the exception of some taxes pay, has done that El Salvador has had this phenomenon in terms of the growth of electronic commerce.

“This is a market that could reach to Costa Rica in five years,”

Image courtesy of estrategiaynegocios.net
Image courtesy of estrategiaynegocios.net

According to the general manager of Aerocasillas in El Salvador, Roger Sibrián, and being that the Salvadoran market represents, on average, around 8,000 transactions per month or same number of customers, and Costa Rica is 10 times more than that, approximately, explained. [2]. Purchases through the internet have also been favored by the carriers of this type of merchandise in the beginning made high charges for the provided lockers or P.O. Box and now even are free, which also has encouraged the population to make this type of transactions.

Another factor that makes e-commerce to flourish in relation to trade physical not only in El Salvador if not also in the Central American region is due to the high prices that have local firms in terms of technology and gadgets mainly which could cost in some cases up to twice the cost for internet in any website like ebay.com or amazon.com, although some local companies have implemented its own system of online sales have not had major impact to the people while trying to enter the business of trade online are still very high prices.

Competitive companies are carrying out parcels of the United States (principal country in which Salvadorans buy stuffs) is this growing which is good on one hand for buyers because costs go the product to the country are kept or lower and on the other hand this also encourages people to keep buying over the internet.

According to data from the International Telecommunication Union, telecommunication of the Organization of the United Nations specialized agency, Costa Rica, in 2012, reached up to 50% (47% of Costa Rican households) Internet penetration, while El Salvador alone reaches 11% or 12% of homes, until last year, according to data from the United Nations program for development (UNDP). [3]

A good Branding of local companies as international in El Salvador encouraging electronic commerce not only could capture an interesting market with respect but this also reveals the opportunity that also exists in other Central American countries since if after Costa Rica El Salvador, the other countries of the Regal can be considered as emerging as regards the type of online business.

Image courtesy of ski-systems.com
Image courtesy of ski-systems.com

Some of the main challenges facing the development of e-commerce in the region are:

  • Lack of Technical Expertise: The current strategy of e-commerce was not born as such, they have had to build it based on experience since some of them have leading WebStore by managers who are not professionals in computer science and therefore did not know about business on the Web; that is why they have had to learn on the road. [4] .
  • Under Developed Business Support Infrastructure: Among other aspects that apply to companies with e-commerce: application of outsourcing activities which no principal in the company, e.g. safety, online payments, delivery orders, among others. [5]

These challenges tells us that in El Salvador we still need to develop real strategies to be able to generate a pure e-commerce, taking advantage of the main advantage that is has in the country as it is the lack of regulation of the same.

In El Salvador, the e-commerce already exists. Not only because customers can order books, articles for babies and of office, via the Internet, any provider in the world, but because they can make it here by their own. [6]

Commercial transactions can already be done, even if they are legal, “need to be properly regulated”, as recognized by Sigfredo Figueroa, executive director of the Épais programme, which carries out the technical secretariat of the Presidency of the Republic. [7]

In order to fulfill the expected growth rates, companies engaged in e-commerce and branding them will depend on the development of the necessary infrastructure and expertise, to attract more international customers. Realistically e-commerce is the future of the sales, and the development of such strategies and business is crucial to survive worldwide.

 

References

  1. http://www.estrategiaynegocios.net/blog/2013/12/20/el-salvador-compras-virtuales-crecen-40-en-ultimos-cuatro-anos/
  2. Ibid. Ref. 1.
  3. Ibid. Ref. 1.
  4. http://www.ugb.edu.sv/resumenes-de-investigaciones-usulutan/tecnologia-usulutan/item/42-uso-del-comercio-electronico.html
  5. Ibíd.  Ref. 4.
  6. http://www.elsalvador.com/mwedh/nota/nota_completa.asp?idCat=6374&idArt=3326370
  7. Ibíd. Ref. 6

About Jorge Mastrapa

Dr. Jorge Mastrapa is an international author, speaker, executive coach, and entrepreneur. His areas of expertise include cultural diversity, global leadership, organizational culture, and human capital management.

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