Guatemala - eCommerceGuatemala - eCommerce
E-commerce is growing rapidly in the Guatemalan market. Guatemala has begun to use e-commerce among its chambers and associations, large banks, supermarkets, and the Exporters Guild among others. Some Government agencies, for example SAT (equivalent to IRS), the Government procurement office, and the Trade Mark Registry have recently launched new web pages offering interactive services. Culturally, Guatemalans prefer face to face engagements, but new generations are embracing technology and moving away from traditional retail. Business people, associations, and the Government acknowledge that eCommerce is a very important electronic tool in doing business.
Examples of some e-commerce companies are:
Facebook is the most used social media tool for promotion and sales. Large companies have become pioneers within the industry, and it will take some time for smaller firms to adapt. The total number of Facebook users for Guatemala is 6.9 million. 92 percent of these users are accessing the platform via a mobile device. Other popular social platforms used are: FB Messenger, whatsapp, YouTube, Instagram, Twitter, skype and LinkedIn.
A challenge for e-commerce has been the low connectivity infrastructure in Guatemala.
E-commerce in Guatemala has grown in spite of considerable challenges such as the large amount of unbanked citizens, relatively low percentage of credit card holders, and difficulties with both cross-border transactions and delivery of products.
Guatemala is currently in the early stages of e-commerce, and most purchases are conducted internationally. Many significant Guatemalan businesses have postal boxes in Miami. According to the Guatemalan Association of E-Commerce, in 2018 Guatemalan internet purchases reached $560 million from foriegn suppliers and $65 million locally. Arrangements for the shipping of merchandise to Guatemala are made by ordering companies, which lower transportation fees.
In September 2008, an e-commerce bill was approved by Congress. This bill is called “Law for the Recognition of Communications and
Electronic Signatures”, and provides a secure environment for the transmission of electronic messages, addresses the validity and efficiency of documents and electronic signatures, and contains other e-commerce specific matters.
Guatemala has a significant number of retailers with the ability to conduct e-commerce. Guatemala offers new payment methods that facilitate the development of e-commerce, not only in Guatemala but throughout the Central American Region. The most common forms of payment are personal debit and credit cards (VISA, MasterCard and American Express), PayPal Latin America, Apple Pay and wire transfers. E-commerce has allowed many Small-Medium entrepreneurs to trade their products locally, and internationally.
Guatemala has also begun participating in the “eTrade for All” initiative led by UNCTAD. UNCTAD focuses on the development of e-commerce in developing countries by:
1. Strengthening of the regulatory framework
2. Protecting the consumer
3. Protecting data
4. Strengthening capacities to innovate
For more information:
Domestic e-commerce (B2C):
There is a trend of purchasing products from the United States, considering the ease of conducting business, and the well-established delivery companies found in Guatemala. Guatemalan consumers also buy from the European and Mexican eMarkets.
Some of the most popular products Guatemala purchase overseas are electronics, clothing, car spare parts, household items, gifts, decorations, books, online courses.
According to experts in e-commerce, the greatest challenges of buying from the U.S are:
Some U.S. vendors only accept credit cards with a U.S. billing address
Guatemalan Customs Authorities will open and verify all packages from the U.S. This practice is subject to the Customs agent’s discretionary rulings, and therefore some products may end up paying more import duties than they should.
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.
Despite the attractiveness and growth of e-commerce, Guatemalan consumers and small business, can be reluctant to purchase goods and services online due to lack of trust in the system.
Another factor that concerns Guatemalans is the lack of information and certainty of privacy protections, personal identification information, and insecurity of online transactions.
As a result, some courier and delivery companies offer to pay customer’s purchases with their company’s credit card for a small fee (1-3 percent of the total purchase).
Credit Card issuers now offer security solutions for e-commerce that help mitigate the risk of fraud and chargeback rates. The Guatemalan chamber of E-commerce said there must be a legislation that facilities e-payments and punishes fraudulent activities.
There is no Government support for opening Business to Business e-commerce yet, but local firms are encouraged to innovate in the e-commerce field.
Larger companies have IT offices within their organizations to manage commercial services on their webpages. Others subcontract from local firms that specialize in developing and managing e-commerce sites. These companies will provide software to the hiring firm such as site-building tools and templates, database features and methodologies for best practices, plus transaction software.
Product supply and procurement exchanges represent another aspect. These sites serve a range of industries and often focus on a niche market. A company purchasing agent can purchase supplies from vendors, request proposals and even make bids for purchases at specific prices. These B2B websites enable the exchange of product supplies and procurement.
Guatemala is a signee of the WTO agreement on Intellectual Property Rights (IPR), and is under Guatemalan legislation as a result of the ratification of the Marrakesh Agreement. However, Guatemala tends to ignore IPR when it comes to e-commerce.
Guatemala has recently taken legal and administrative steps to facilitate the protection of the rights of intellectual property, enacting new laws related to copyright and industrial property. The Guatemalan Minister of Economy is in talks with WTO to further adress these issues.
The business model most commonly used in Guatemala is B2C (Business to Consumer). B2C is used by local retailers, international retailers, banks, fast food franchises, pay per view, movie and TV show streaming subscription services, movie theaters, supermarkets, pharmacies, etc.
In Guatemala, the Business to Business model is used, but on a smaller scale.
The Guatemalan Government has developed a platform for businesses to bid on government opportunities at www.guatecompras.gt, the site is managed by the Ministry of Finance. All Government agencies are mandated to use this site for public procurement.
As mentioned before, banks and courier companies offer the service of secure payment for an additional fee.
According to a report by Deloitte; 93 percent of the mobile users in emerging markets, and 78 percent in developed markets, look at their phones at least once an hour. 47 percent of emerging markets consumers reported using their phones to make in-store payments, compared to 20 percent of consumers from developed markets.
In Guatemala many retail stores, fast food restaurants and movie theaters have developed their own apps, and offer many discounts when purchasing in app.
Emerging trends in Latin America show an exponential growth in the online audience. Mobile phones and tablets continue to account for the growth in online traffic. This shift in the digital media landscape has changed the way marketers are communicating. Digital marketing is now at the core of the marketing mix in Latin America where consumer insights and channel selection are essential to creating successful marketing strategies. There are local and international companies offering digital marketing campaigns tailored to different budgets and needs.