The market for eCommerce in Peru could reach $14 billion by 2022.
In 2019, eCommerce accounted for $4 billion in purchases in Peru, with 65 percent concentrated in the capitol, Lima. ECommerce opportunities have significantly increased through the use of the internet and smartphones. Although Peru is a small market in the eCommerce industry, ranking sixth in Latin America, it has taken a significant leap in the last decade. Peru grew from 1.27 percent of the value of electronic commerce in the region in 2009 to 5 percent in 2019.
Peruvian consumers prefer to use cash for transactions, which limits the penetration of eCommerce in the country. However, according to AMI analysis, the market for eCommerce in Peru could reach $14 billion by 2022. eCommerce transactions that are carried out from mobile devices, smartphones and tablets have been grown significantly. Of the total of eCommerce transactions, $1.7 billion were completed through mobile devices, while $2.3 billion were from desktops.
Thousands of companies have been adversely affected by the sudden slowdown prompted by the COVID-19 pandemic. Consumers have had to adapt to new processes for purchasing products and services in order to satisfy their needs and safeguard their health. Faced with this, eCommerce has become an indispensable tool for small, medium and large companies as they have found it necessary to leverage the recovery of their businesses.
In Peru, the number of eCommerce transactions grew by 120 percent between February and March 2020. ECommerce accounted for 12.5 percent of credit card transactions between January and March 2020, growing to 45 percent by June 2020. Likewise, the average customer ticket has increased by 48 percent, currently standing at an average $67 per transaction.
For business to business (B2B) eCommerce, businesses are beginning to use their own custom email domain servers instead of using an informal personal email address (Hotmail or Gmail) to conduct business. This new trend of owning one’s own email domain servers allows Peruvian businesses to legitimize their online presence.
There have been advances in the use of the internet in several Peruvian government institutions, including the tax collection agency, SUNAT, the public registry, SUNARP, and the Peruvian state-owned bank, Banco de la Nación (which handles the Treasury accounts). Additionally, the National Elections Bureau, ONPE, is testing electronic voting and improving internet usage.
The Peruvian consumer generally expects different prices and offers as opposed to promotions created to deplete a stock. Consumers are starting to prefer making purchases electronically over visiting the store. At the same time, they expect variety and simplicity, as navigation can be a barrier at the time of purchase. Additionally, it is important to highlight other benefits that promote online access and electronic commerce purchases. For example, delivery companies or taxi services have managed to convey differential advantages that have quickly resulted in their growth. These changes are a reality and growth is usually exponential once technological adoption occurs. Companies should be looking at how to take advantage and strengthen this channel.
Online Payment and Government e-Services
The Peruvian government has established a special task force, E-Gob Peru focused on online payments. It is managed by the Secretariate for Digital Governance (SEGDI) under the President of the Council of Ministers. This office is continuously developing Gov2Citizens solutions for tax payments, and providing information on customs and foreign trade, as well as Gov2Gov transactions to reduce expenses within different agencies. Operational services include a citizen ID service portal and business-assistance services for small and medium-size companies. Additionally, the Peruvian government is implementing an Electronic Procurement System (SEACE: Sistema Electrónico de Adquisiciones y Contrataciones del Estado) with a goal of improving transparency and efficiency of government purchasing.
A report from the Peruvian Chamber of eCommerce – CAPECE, shows that Peru has the lowest smartphone utilization among the main economies in Latin America, but estimates show mobile eCommerce purchases will reach 57 percent of total eCommerce purchases by 2020. The study also remarks that as of December 2019 there were 31 million smartphones in Peru, of which 77% have an Internet connection.
Currently the main means of digital marketing in Peru are:
- E-mail marketing
- Social networking sites
- Search engine optimization (SEO)
- Publicity (banners) in search engines
In 2019, 67 percent of online shoppers reached vendor sites through social networking sites. Additionally, according to recent surveys, the main retail companies plan to develop mobile marketing strategies.
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