Dominican Republic - eCommerceD.R. - eCommerce
OverviewThe 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.
For the English versions of Law 126-02
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.
The Dominican Telecommunications Institute (INDOTEL) reported that the Dominican Republic recorded a cumulative growth of 4.977% in its active internet accounts in the last twelve years. The Dominican Republic moved from 134,545 accounts in December 2005 to 6,185,564 active accounts as of March 2017.
Current Market Trends
Domestic eCommerce (B2C)Even under a favorable legal framework, Dominican businesses have been somewhat slow to integrate electronic commerce transactions into their operations. Currently, only a few industry sectors offer e-commerce capability, mostly business to consumer (B2C).
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. Because there are more than one million Dominicans living overseas and sending goods and money (remittances) with regularity, several business offer on-line ordering of their products and services. These products can be ordered and paid for overseas but delivered in the DR.
Cross-Border eCommerceThe majority of cross-border eCommerce in the Dominican Republic is with the United States. However, the country of origin of many of the products is from China and other Asian markets. Local couriers have indicated that most international e-commerce transactions are with Amazon and eBay.
B2B eCommerceThere is a growing business to business (B2B) e-commerce market in the Dominican Republic. Main sectors include banking, telecommunications, government transactions and consumer goods.
eCommerce ServicesThe 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 RightsThe GoDR, through Law 126-02 that creates the National Office of Intellectual Property Rights (ONAPI) and its National Strategic Plan, creates 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 trained and knowledgeable human resources. 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 SitesThere are a number of consumers 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. The payment of services using eCommerce platforms have shown remarkable growth within the last three years, allowing customers to pay online all utility services, official government transactions, such as taxes, certifications, business permits, among other services.
Since 2004, the Dominican Government has 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 site include: Direccion General de Impuestos Internal.
Online PaymentThe 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).
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, among others.
Many entrepreneurs and companies with Dominican online businesses use widely known payments methods such as PayPal, 2Checkout, Authorize.Net, Stripe, Amazon Payments, among many others. However, among these PayPal is the most used for its ease of opening, integration and comfortable rates.
Mobile eCommerceMobiles are the most used platform for business purposes among SME’s with a 41 percent penetration, followed by the use of computers with 8 percent, Internet and e-mail with 7 percent and 5 percent respectively and web page with only 3 percent.
Digital MarketingThe 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 2015, the Dominican Republic hosted “TyCSocial”, the most important event on digital marketing in the region. Businesses and brands continue to grapple with the determining the right design of digital marketing plans capable of drawing the attention of its audiences and generate income through the different digital channels.
Major Buying HolidaysMajor 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 obliges 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 communication governmental policy that must be observed by Dominican society.
The Dominican Republic has 4.5 million active users on Facebook growing by 900,000 users since last year 2016. The DR is the second most active country in this social platform for 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).
The DR ranked 58th out of 150 in 2016 in the ranking of countries with the most active users in the Facebook, followed by El Salvador (71) and Costa Rica (74). The social network with most Dominican users is Facebook (91.2%) followed by WhatsApp (86.6%).
Dominican Republic eCommerce Industry Trade Development and Promotion eCommerce