Describes what a company needs to know to take advantage of e-commerce in the local market and covers prominent B2B websites.
The Dominican regulatory environment for electronic commerce is very supportive; Law 126-02, enacted in 2002, regulates electronic commerce, digital documents and signatures.
The general principles of Law 126-02 are oriented toward the facilitation of electronic commerce between and within nations; the validation of transactions between parties (which have been performed by means of the new information technologies); and the promotion and support of the implementation of new technologies. This modern law allows for the admissibility and legal force of digital documents and electronic signatures, providing the same legally-binding effect granted to acts under private signature.
Under CAFTA-DR, the Dominican Republic has agreed to provisions on electronic commerce that reflect the issue’s importance in global trade and the importance of supplying services by electronic means as a key part of a vibrant electronic commerce environment. The agreement provides for transparency and cooperation and specifies the following:
The parties have agreed not to apply customs duties, fees or charges on digital products delivered electronically and to apply customs duties on the basis of value of the carrier medium for digital products delivered physically.
Parties may not give less favorable treatment to some digital products than they accord to other similar digital products on the basis of the nationality of the author, performer, producer, developer or distributor of the products.
There is no differential treatment among digitally delivered products.
Current Market Trends
The Dominican Telecommunications Institute (INDOTEL) reported that the Dominican Republic recorded a cumulative growth of 12.5% in its active internet accounts in the last twelve years.
The Dominican Republic, with an approximately 11 million population by the end of 2020, has mobile phone connections of 8.64 Million (79.2% of the population) and 8.16 Million Internet users (74.8% of the population).
Domestic eCommerce (B2C)
Even under a favorable legal framework, Dominican businesses were somewhat slow to integrate electronic commercial transactions into their operations.
One positive outcome of the Covid 19 crisis is the incredible development and adoption of e-commerce in the Dominican Republic. Major supermarkets and department stores developed on line shopping, allowing customers to virtually shop and have their goods delivered directly to their door. Delivery applications also saw explosive growth in their operations, with some seeing triple digit growth. The sale of a variety of products, including PPE via social media, have also seen significant growth. Increased sales of a variety of products via Instagram is just one example of uptake in eCommerce via social media.
Within the B2C segment, the banking and telecommunications sectors is where e-commerce has shown the most growth and impact; the hospitality industry has also steadily increased its B2C e-commerce activity. A majority of hotels have web-based room-booking capability and several fast food restaurants offer on-line ordering. Additionally, several businesses offer on-line ordering of their products and services in the US that can be ordered and paid for overseas but delivered to the DR—the DR has a significant diaspora (about two million Dominicans living in the USA) which has led to an increase in this particular niche market.
The majority of cross-border eCommerce in the Dominican Republic is with the United States. However, the country of origin of many products is from China and other Asian markets. Local couriers have indicated that most international e-commerce transactions are with Amazon and eBay.
There is a growing business to business (B2B) eCommerce market in the Dominican Republic. Main sectors include banking, telecommunications, government transactions, and consumer goods.
The payment of services using eCommerce platforms have shown a remarkable growth within the last three years, allowing customers to pay all utilities services, official government transactions, such as taxes, certifications, business permits, among other services.
eCommerce Intellectual Property Rights
The GoDR, through Law 126-02 that formed the National Office of Intellectual Property Rights (ONAPI) and its National Strategic Plan, created a legal framework to protect intellectual property rights in eCommerce. However, ONAPI has identified weaknesses in prosecuting violations of eCommerce IPR, mainly because of a lack of professionalized local staff. This represents an opportunity for U.S. businesses to provide products and services to the Dominican government to increase their capabilities and awareness about violations in eCommerce IPR.
Popular eCommerce Sites
There are a number of consumer trading sites such as: COROTOS and EMARKET, which are very popular and widely used by all economic strata. Major news media publish their papers on-line, including their classified ads sections, to facilitate the flow of information.
In 2004, the Dominican Government initiated the formulation of an Electronic Government strategy with the creation of the Presidential Office of Information and Communication Technologies (OPTIC), through which important initiatives have been implemented with the objective of incorporating ICT in modernizing public administration in the Dominican Republic. Popular government sites include: http://www.dgii.gov.do and http://www.dga.gov.do.
The Dominican Republic has three platforms (Cardnet, Visanet and Azul) for the processing of payments by credit card and a platform for payments through mobile broadband (Tpago, MoniPay).
The majority of commercial banks and most financial service institutions in the Dominican Republic have websites to assist clients with paying utility bills, monitoring account status, and transferring funds.
Many entrepreneurs and companies with Dominican online businesses use widely known payments methods such as PayPal, 2Checkout, Authorize.Net, Stripe, Amazon Payments, and others. However, PayPal is the most used for its ease of opening and account, integration, and comfortable rates.
Mobile devices are the most used platform for business purposes among SME’s with a 45 percent penetration, followed by the use of computers with 10 percent, Internet and e-mail with 11 percent and 7 percent respectively and web page with only 4 percent.
The Dominican Republic has shown strong progress in the digital marketing industry with the presence of a wide range of local companies that provide digital services for the local industry and in partnership with international firms. In the last few years, the Dominican Republic has hosted some of the the most important events on digital marketing in the region. Businesses and brands continue to grapple with determining the design of digital marketing plans capable of drawing public attention and generating income through the different digital channels.
Major Buying Holidays
Major buying holidays are similar to the United States: Valentine’s Day; Easter, Mother’s Day, Father’s Day, Back To School, Black Friday, Cyber Monday, and Christmas.
The Dominican Republic has a regulation that governs the use of social networks by public institutions; the NORTIC E1: 2014 Standard for the Management of Social Networks in Governmental Organizations published by the Presidential Office of Information and Communication Technologies (OPTIC) together with the Directorate General of Communication (DICOM). The Norm A2 requires institutions to include links to their social network accounts in visible places. Any institution certified by this standard complies with this requirement.
The General Directorate of Communication (DICOM) is the body created by Decree No. 490-12, which assigns to this agency the functions of designing, coordinating and directing the entire policy that must be observed by Dominican society.
The Dominican Republic has approximately 7 million active users on Facebook, a number that has grown by one million users since 2020. The DR has one of the most active populatins on social media in Central America and the Caribbean, according to iLifebelt, an independent organization that conducts studies and technical analysis on the use of the internet and social networks in Central America (iLifebelt Studies). Instagram is significantly growing with younger populations and has played an important role in political/social life.