Guatemala - eCommerceGuatemala - eCommerce
Guatemala, through its chambers and associations, large banks, supermarkets, government agencies, and others, is actively involved and promoting eCommerce. Some government agencies, for example SAT (equivalent to IRS), the Government Procurement office, and the Trade Mark Registry, have launched web pages to offer interactive services.
Businesspeople, associations, and the Government acknowledge that eCommerce is a very important electronic tool in doing business.
The eCommerce industry is growing rapidly in the country. Large companies have become pioneers within the industry, smaller firms are adapting.
Examples of some users of eCommerce are: www.amchamguate.com, www.negociosenguatemala.com; www.industriaguate.com; www.prensalibre.com; www.guatecompras.gt; www.bi.com.gt; www.cinepolis.com.gt.
According to the U.S. Census Bureau Report, Guatemala had 6.2 million users in January 2017, a 37 percent internet penetration, which reads as an increase of 8.4 percent from 2015.
A challenging factor for eCommerce to flourish in the country has been the low connectivity infrastructure.
Guatemala’s increasing use of eCommerce is impressive, considering challenges such as large amount of unbanked citizens, relatively low percentage of credit card holders, and difficulties with both cross-border transactions and delivery of products.
Current Market TrendsIn September 2008, an eCommerce 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 eCommerce specific matters.
Regarding payment methods, Guatemala has a significant number of retailers with ability to conduct electronic commerce. The Country offers new payment methods that facilitate the development of e-commerce, not only in Guatemala but also in the Central American Region. According to sources, electronic transactions grew 28 percent from 2013 (USD 1,271 billion) to 2015 (USD 1,628 million).
Guatemala has also begun participation in the “eTrade for all” initiative led by UNCTAD. It focuses on the development of eCommerce in developing countries by:
1. Strengthening of the regulatory framework
2. Protecting the consumer
3. Protecting of data
4. Strengthening of capacities to innovate
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Guatemalans have embraced the advantages of purchasing from the comfort of their homes, offices or their mobile device.
eCommerce has also allowed a number of Small-Medium entrepreneurs to trade their products locally, and internationally.
Purchasing products from the United States has become trendy due to the ease of doing business, and the well-established delivery companies one can find in Guatemala. Guatemalan consumers also buy from the European and Mexican eMarkets.
When speaking of the most popular products that Guatemalans purchase overseas, there is not limit. In the past years, the market has been all over the board with electronics, clothing and books. Recently, consumers purchase repair parts, household items, gifts, decorations, take online courses, etc.
According to experts in eCommerce, the most important 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. Sometimes this slows the process, and on occasion there is debate over import duties.
Despite the attractiveness and growth of electronic commerce, Guatemalan consumers and small business, can be reluctant to purchasing goods and services online due to lack of trust in the system.
Culturally speaking, Guatemalans prefer face to face engagements, but the new generation embraces technology.
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 eCommerce that help mitigate the risk of fraud and chargeback rates.
There is no Government support for opening Business to Business eCommerce, yet this is a huge opportunity for local firms.
The eCommerce ecosystem in Guatemala is comprised by company websites. These websites may be accessed by anyone or only to registered members. Larger companies have IT offices within their organization to manage commercial services in their webpages. Others, subcontract from local firms that specialize in developing and managing eCommerce 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.
Another category is product supply and procurement exchanges. 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.
eCommerce Intellectual Property Rights
Guatemala, as many developing countries, does not take into consideration Intellectual Property Rights (IPR) when it comes to eCommerce. Much of this due to lack of understanding in the emerging sector.
Guatemala is a signee of the WTO agreement on IPR, and is under Guatemalan legislation as a result of the ratification of the Marrakesh Agreement.
Subsequently, Guatemala has undertaken legal and administrative reforms to facilitate the protection of the rights of intellectual property, for example, through the enactment of new laws relating to copyright and industrial property. The Minister of Economy recently began addressing these matters with WTO.
Popular eCommerce Sites
The business model mostly used in Guatemala is B2C (Business to Consumer) and it is used by many local retailers, international retailers, banks, fast food franchises, pay per view, movie and TV show streaming subscription services, movie theaters, supermarkets, pharmacies, etc.
Large companies have been the first to take advantage of this tool. It will take some time for smaller firms to adapt. Examples of some users of e-Commerce are: www.amchamguate.com, www.negociosenguatemala.com; www.industriaguate.com; www.prensalibre.com; www.guatecompras.gt; www.bi.com.gt; www.cinepolis.com.gt.
In Guatemala, Business to Business is used on a smaller scale, in which certain industries have the ability to sell their products and services to other companies like to focused on selling products or services to other companies is used less but firms like Microsoft, Google, Cisco, software developers and Amazon are widely used.
The Guatemalan Government has developed a platform for businesses to bid on government opportunities under one website www.guatecompras.gt, the site is managed by the Ministry of Finance. All Government agencies are mandated to use this site for public procurement.
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. As mentioned before banks and several courier companies offer the service for secure payment for a small fee.
Regarding accessibility to mobile services, according to the International Telecommunications Union there are 111.3 mobile phones for every 100 citizens.
With smartphones now more affordable than ever, most of Guatemalans have a full-time internet connection in their pocket. Mobile commerce has allowed Guatemalans younger demographic to jump straight to eCommerce.
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 within an hour or less of when waking up. 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 through the application.
Emerging trends in Latin America show an exponential growth for 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
According to a report from Digital Strategy Consulting from January 2017, there are 6.2 million active social media users, and 5.7 million active mobile social users. Their numbers also suggest a digital annual growth of +32 percent in internet users, +29 percent in social media users, +8 percent in mobile subscriptions, and +33 percent mobile social users.
Major Buying Holidays
Due to the proximity and influence from the United States, many holiday’s and shopping trends are similar.
- Mother’s Day (May 10)
- Father’s Day (June 17)
- Valentine’s Day
- Black Friday
- Cyber Monday
- End of Year Holidays – December
- Easter Week, a major Guatemalan holiday, usually marking the warm season. (March, April)
The total number of Facebook users for Guatemala is 6.2 million. 92 percent of these users are accessing the platform via a mobile device. Facebook is the most used social media tool, where the majority of promotion and sales takes place. Other popular social platforms used are: FB Messenger, WhatsApp, YouTube, Instagram, Twitter, Skype and LinkedIn.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.
Guatemala eCommerce Industry Trade Development and Promotion eCommerce