Colombians can save around $ 30 on each purchase and online commerce is expected to grow with the arrival of the third largest company in the world

The largest player in global electronic commerce, Amazon, announced its arrival in Colombia by July 2018. Thus, Colombia will become the third country in the region to host the digital commerce platform, after Brazil and Mexico.

Leer en español: ¿Qué ganan los colombianos con la llegada de Amazon?

Currently in Colombia, to access Amazon products, it is necessary to enter the US web portal and use third-party services, such as virtual mailboxes and parcel companies, to make shipments. But once this company installs its 'market place' (virtual market) specific to Colombia, both sellers and buyers can trade directly with Amazon, which takes care of shipping with national coverage in all countries in which it operates directly.

Eliminating intermediary shipping services can save Colombians about $ 30 on each purchase, compared to the current cost of using the Amazon portal in the United States. While that difference in costs gave some advantage to local platforms such as Linio and MercadoLibre, the Colombian consumer may now begin to consider Amazon as one of their first options.

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Amazon comes at a time when e-commerce in Colombia is in full development. Between 2016 and 2017, the number of online transactions increased 24%, a figure that indicates the potential of this sector of the market in the coming years and that should have been attractive to the company of Jeff Bezos.

However, despite the growth, electronic commerce in Colombia is still comparatively small. Only 1% of all trade in Colombia is through the Internet, which, compared to other countries in the region, such as Brazil, Mexico or Chile, where this figure is around 3%, or the United States, where ranges between 10 and 15%, shows that Colombia is lagging behind.

The arrival of Amazon, then, can be perceived more as an opportunity to consolidate the growth of e-commerce in Colombia, boosting the penetration of the sector and increasing the total volume of sales through the Internet.

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For Jaime Ramírez, Country Manager of Mercado Libre in Colombia, the arrival of Amazon is not a threat, but a step in the right direction for electronic commerce in the country, as it ensures that Mercado Libre sales accelerated with the arrival of Amazon to Brazil and Mexico, resulting in growth in the totality of online commerce.

"The arrival of Amazon should think less about how it is going to divide that cake of the market that we have today and more on how each slice will grow" adds Ramírez.

Amazon, the third largest company in the world already had operations in Colombia, but these had to do with providing web services and storage in the cloud for companies under the name of Amazon Web Services, and not with online commerce.

Then, the arrival of the market place from Amazon to Colombia can be very beneficial for both the consumer and the industry. The first will find access to the Amazon catalog at a considerably lower price while the second expects to find a popularization of purchases through the internet that will grow the total e-commerce market.

Amazon is expected to start operations in Colombia next July selling only electronic products, such as smartphones, tablets and televisions, as well as decoration and kitchen items.

Latin American Post | Pedro Bernal
Translated from “ ¿Qué ganan los colombianos con la llegada de Amazon?”