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The Challenges of e-Commerce in Chile

23/04/2018

e-Commerce Chile

Chile is the Latin American country with the highest growth in e-Commerce in recent years and is ninth in the world according to the 2016 e-Commerce index. E-Commerce is growing exponentially in a country where 80% of its population has access to the Internet. Currently, there are more than 15 million people connected in Chile, of which more than 30% (5.5 million) make purchases over the Internet. Also, perspectives invite optimism. In 2017, e-Commerce grew by 20% in Chile and forecasts point to an acceleration of up to 35% in 2018. In absolute terms, online sales would be $5 billion in US dollars and will reach $8 billion in US dollars by 2020 according to data from Santiago’s chamber of commerce.

Technology to win the client

A good example of the commitment to e-Commerce is Falabella, one of the leading fashion distributors in Latin America. The Chilean group has managed to increase its online sales in 2017 by 36% more than in 2016, which was $769 million dollars. The digital transformation of the business is focused on improving customer service. Thanks to the application of technology, it is achieving sustained growth, automating processes, improving stock management and streamlining delivery. Using omni-channels is the company’s strategy to continue growing and it has developed applications that improve the shopping experience and the satisfaction of its customers. It is not only about guaranteeing the sale but also about retaining the client.

However, Falabella’s case is not isolated. The arrival of giants like Amazon is forcing the retail sector to rethink its commercial approach. The development of e-Commerce provides a way for companies, especially medium and small companies, to diversify sales channels and use electronic commerce as a tool to serve the customer.

E-Commerce Challenges in Chile

The level of the population’s connectivity, together with the change in consumer habits in favor of online shopping, predict a promising future for Chilean electronic commerce. However, the road is not free of obstacles and globalization means being prepared to compete in an international market in which the levels of the technological development of companies impose the highest barriers. While e-Commerce in Chile is in a good position, analysts point to several challenges:

  • The increase in the use of e-Commerce by small businesses: only 37.6% of micro businesses in Chile use e-Commerce as a sales channel. Its incorporation into the online channel is important since in recent years, local commerce has been affected and e-Commerce is presented as a key way to be more competitive. Even for companies that decide to focus on the local customer, e-Commerce is a way to do that because shopping habits are changing due to daily rush and lack of time.
  • Greater investments in technology to clear the main barriers that stop Chilean consumers when making online purchases. Some of these barriers include distrust, the quality of the purchasing process, the means of payment and logistics. The latter is a fundamental pillar of e-Commerce. It grants flexibility to the distribution of the products and allows for adaption to the clients’ requirements (schedules, locations). It is another way to retain and add value. For this reason, it is important, in order to achieve sustained growth, to have an adequate logistics partner that guarantees customer satisfaction until the end process.
  • Compete globally. It has been calculated that 72% of large companies use e-Commerce. During Santiago’s 2018 eCommerceday, held on April 10th, the Minister of the Economy, José Ramón Valente, highlighted the need to improve infrastructures to overcome the gap that separates Chile from the more developed countries in the Organization for Economic Co-operation and Development of the large companies.

Technology is the door to globalization

Depending on digital and electronic communications is essential nowadays for any business that wants to have options to compete in the market of its choice. Staying in a traditional channel is risky and subtracts competitive advantages in a world that advances toward digitalization in public and private areas.

In this regard, the study, “Mastering Omni-Channel B2B Customer Engagement” from Forrest Consulting states, “In order for B2B companies to be successful for the future advances in digital commerce, they will have to reconsider the approach they give to customer engagement (what marketing means in terms of creating solid and lasting relationships with users, generating commitment between the brand and consumers) and how they get involved with people processes and technology to boost that loyalty in all channels.”

What does digital and electronic technology offer to companies?

  • Connects with an international market of potential clients that can be scaled based on the company’s opportunities. (B2C)
  • It connects with a broader market of suppliers that make it possible to improve costs, the quality of raw material, the variety of products, etc. (B2B)
  • Makes loyal customers through a good shopping experience.
  • Enables the development of the omni-channel and the company can communicate and interact with the customer through different channels (physical store, Internet, mobile, Contact Center, etc.) as a management strategy.
  • Increases sales.
  • It allows for the automation of management processes through various tools that improve the productivity of departments in the company: administration, sales, customer service, warehouse, distribution, etc.
  • Reduces costs when optimizing processes.

EDICOM is an international business and leader in B2B e-Commerce solutions that develops technology for the exchange of electronic transactions between clients, suppliers and logistics operations. With EDICOM, you will have access to the best range of solutions for communicating with business partners.

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