The title says it all. Does e-commerce truly work in the Caribbean market? While the region has long made significant progress in the field of digitization, this question remains relevant. Businesses in the Caribbean have had success with popular platforms like WooCommerce, Shopify, Magento, and BigCommerce, but conducting e-commerce in the region is very different from doing so in countries and regions where e-commerce has long been established. For starters, a majority of the region’s consumer markets are still tied to traditional purchasing patterns and have not yet fully embraced digital payment options.
Compounding the issue, not all platforms cater well to the Caribbean market and not all are compatible with Caribbean payment gateways like First Atlantic Commerce. And it has been reported that credit card penetration is also extremely low in the region.
But it is not all bad news
Conversely, it should be noted that the information on internet and e-commerce use in several Caribbean countries is limited and dated. But the countries of the Dutch Caribbean have proven to be the exception. In several of these islands, the B2C E-Commerce Index 2020 of the United Nations Conference On Trade And Development (UNCTAD) found that 92,9% of people aged 15 and above used the internet, with 43,6% of the population making online purchases between 2017 and 2018. And in 2017, 7% of internet users in one of those islands, Curaçao, sold items or services over the internet. This data is relatively recent, especially compared to other island nations in the Caribbean.
It should also be highlighted that, according to research based on Statista data, the Caribbean B2C e-commerce market was valued at US$5 billion in 2019 and was growing at a rate of around 25% per year. However, it further stated that due to the difficult nature of online payment integrations in the region, not all businesses can participate in this market.
There are region-specific integrations like WiPay and Paywise, but those are mostly only for businesses registered in Trinidad and Tobago, Jamaica, or Barbados. And in the Dutch Caribbean, there are also PagaDirect and CX Pay, payment gateways that offer a list of international payment methods such as credit cards and digital wallets. Then there’s also Sentoo, which sets itself apart in that it offers local online account-to-account (A2A) payments without the need for a credit card, a new payment method that is globally on the rise.
The effects of the COVID-19 pandemic
It stands to reason that the COVID-19 pandemic, and the ensuing widespread consumer shift to online shopping, likely had a significant impact on the B2C e-commerce landscape in the Caribbean after 2019. However, there have been no extensive reports to confirm this, especially with regard to the smaller Caribbean economies.
What is being reported, however, is the shift back to brick-and-mortar stores in many countries around the world now that the pandemic appears to be ebbing away. In the first quarter of 2022, higher prices and longer delivery times are all playing a part in the cooldown of the pandemic-fueled e-commerce boom. Even giants like Amazon, Etsy, and eBay have reported significant drops in sales.
But this mass user logoff from online stores and exodus to physical stores may likely be the consumer’s overzealous reaction to society’s gradual move back to the normal that they have been subconsciously clamoring for the past two years. E-commerce is likely to regain relevance once the novelty of the store carpet smell has worn off.
And when that happens, the potential hurdles notwithstanding, businesses in the Caribbean do stand to benefit enormously from embracing it. All it takes is adapting websites, along with payment and delivery methods (for example, you can allow for cash on delivery, debit card on delivery, or something similar), or partnerships with Caribbean-based payment services like WiPay, Paywise, PagaDirect, CX Pay, and Sentoo to make it easy for locals in the countries to shop online.
With the adoption of these strategies, we may see far fewer businesses be excluded from the Caribbean’s e-commerce expansion.