At your convenience: Improved internet access has led to a surge in e-commerce transaction volumes


With rising numbers of internet users and improved access to telecoms services across the country, Colombian consumers are turning to e-commerce as an easy option for shopping.

So far, online transactions have focused on a select group of products. However, expansion of e-commerce activities promises to expand online shopping into a growing number of products and services as a rising number of retail outlets and online platforms strengthen their presence within Colombia’s online market.

The rapid growth of mobile internet connections and increasing consumption of data services have become an essential vehicle for the growth of e-commerce. Competition between telecoms operators has increased options for mobile users and lowered prices for data. Although some barriers to quicker uptake of e-commerce remain, they are more linked with the difficulties of selling retail products online, rather than with any issues specific to the Colombian market. As confidence in online transactions and shopping continues to grow, sales figures are expected to follow.

Setting The Stage

A combination of factors has been driving the adoption of e-commerce in Colombia over the past decade. First, the percentage of the population living below the poverty line fell from 42% in 2008 to 27.8% in 2015, according to the World Bank. An emerging middle class, with higher disposable incomes, has been adopting consumption patterns in tune with modern retail practices, and e-commerce expansion is a result of that trend.

In parallel with rising incomes, the number of broadband internet connections in Colombia jumped from 2.13m at the start of 2010 to 5.89m in the fourth quarter of 2016, according to figures from the Ministry of IT and Communication (Ministerio de Tecnologías de la Información y las Comunicaciones, MINTIC). On a broader scale, investment in infrastructure deployment has allowed expanded internet access to all urban centres and towns of more than 100 inhabitants, and the percentage of homes in Colombia without any internet access fell from 60% in 2007 to 47% in 2015, according to a September 2016 report by BBVA Research.

Furthermore, government legislation on electronic transactions and online data security, which was first implemented in 1999, is helping to shape the sector by providing the security that can promote continued adoption by internet users.

Rising Volumes

Increasing e-commerce sales in Colombia is also part a regional trend. Growth in online shopping has been apparent across Latin America, amounting to $47.4bn in total sales in 2015, according to a March 2016 report by Business Insider’s BI Intelligence. This figure is expected to almost double to $85bn by 2019. Regional expansion is led by large-scale e-commerce markets such as Brazil, which represented 42% of regional sales in 2015, and Mexico, which accounted for 12.3%.

Economic growth in Colombia has been galvanising buyers and encouraging domestic retailers to establish new platforms to reach the country’s online population. The Colombian Chamber for Electronic Commerce (Cámara Colombiana de Comercio Electrónico, CCCE) registered a 64% increase in e-commerce sales in 2015, reaching total sales of $16.33bn through 49m transactions.

Although this figure only accounted for around 1% of total retail sales, e-commerce in Colombia is growing at a rate of 40% per year, compared to an average growth rate of 30% for Latin America, according to local media reports.

A CCCE study published in August 2016 found that up to 76% of internet users in Colombia had bought a product or service online over the previous 12 months. This represented a 24% increase compared to the CCCE’s previous report, in reference to 2013.

Online shopping in Colombia remains highly concentrated within a handful of companies, products and service segments. Approximately 35% of online shoppers use the internet to buy fashion or clothing items, while 28% used it to access technological products. In terms of services, 30% of online buyers access online shopping to purchase plane tickets, according to the CCCE’s figures.

The study also showed a moderate shift in the way online shopping is done. Up to 94% of Colombian online shoppers used a PC or computer for their purchase, compared to 97% in 2013. Still, the percentage of online shoppers that accessed goods and services through their smartphones increased from 30% in 2013 to 49% in 2016. Tablets, on the other hand, were only used by 26% of shoppers in 2016, down from 32% in 2013.

One of the largest online operators in the Colombian market, Mercado Libre, reports that 17.3% of its transactions take place via mobile phone. OLX, a classified ads website that focuses on an array of products, reports that 60% of its ads in Colombia are announced through smartphones.

Furthermore, specific segments have increasingly adopted digital platforms as a means of reaching more potential buyers., for example – a website that allows buyers and sellers of cars and motorcycles to look for new and used vehicles – currently accounts for 25% of the 1m cars sold in Colombia annually, according to local media reports. Although the site does not actually handle transactions, and only connects buyers and sellers, it is another example of the impact that digital platforms can have on established markets.

Competition Drive

A mix of domestic and international digital platforms have increasingly solidified their presence in Colombia. The study by the CCCE found that the online market with the most traffic in the country was regional giant Mercado Libre, which sells products in categories ranging from motorised vehicles to beauty products, and that is the most-visited online retailer, followed by international heavyweights Amazon and eBay. Linio is in fourth place, offering technology, perfumes, watches and other accessories.

The rising profile of these online platforms is having a multiplying effect on the market. Mercado Libre, for example, offers a range of products that can be bought directly through the site, as well as on a marketplace to connect buyers and sellers. More importantly, the platform offers the opportunity for entrepreneurs to create their own personal e-commerce platforms. The CCCE study also established a clearer profile of the Colombian online shopper. On average, online customers purchasing air tickets through the internet spent COP2.77m ($830) and were 34 years old. Average expenditure on technology items by online shoppers was COP1.68m ($500), according to the CCCE study.


Expansion of online transactions has been matched by regulatory reform. Law No. 527, which was enacted in 1999, legislates commerce on the web and the use of data from digital messages, and adoption of digital signatures.

The sector was bolstered by regulation to adapt to Colombia’s private and public efforts to develop a digital economy. Law No. 1581 of 2012 further strengthened the distribution and use of personal data online by, among other things, requiring all commercial databases containing online customer information to be registered with the Superintendency for Commerce and Industry, which oversees not only commercial disputes for online transactions, but also personal data protection through its Office for the Protection of Personal Data.


Despite the favourable structural environment, the current economic situation may reduce the speed of expansion for e-commerce activities in the short term. The fall in oil prices has affected state revenues, leading to fiscal reform in 2017 that included implementing a 3-percentage-point increase in value-added tax for most products, raising the rate to 19%. This is certain to negatively impact disposable incomes, leading to expenditure constraints in Colombian households.

On the other hand, the convenience aspect of e-commerce will likely draw a growing number of people, especially in the larger urban centres such as Bogotá, where a trip to the shops during rush hour can be a time-consuming hassle.

This points to another challenge that online retailers operating in Colombia need to face: logistics. Away from the biggest urban and economic centres, road links and accessibility can be an issue, making delivery times and the handling of customer expectations a critical aspect of the business. However, this is set to improve in the coming years, as a series of major infrastructure projects promoted by the government and the private sector reduce transportation costs and delivery times across the country.