Trade experts met in a webinar organized by the Inter-American Development Bank (IDB) together with the Economic Commission for Latin America and the Caribbean (ECLAC) and the Konrad Adenauer Foundation (KAS) to discuss the role of electronic and digital commerce and to intensify efforts to achieve more effective and comprehensive policy processes in the economic recovery of Latin America.
At the meeting held on June 28, 2021, moderated by the IDB customs and trade specialist Sandra Corcuera, the report entitled “Empowering Latin America and the Caribbean to better use electronic and digital commerce in the face of the COVID-19 pandemic” was presented, prepared jointly by the IDB, ECLAC and KAS.
Mario Castillo, Head of the Innovation and New Technologies Unit at ECLAC, In his opening remarks, he pointed out that electronic and digital commerce plays a leading role in the current economic and social crisis affecting Latin America. He said that an assessment of the current trade situation is essential for the design of policies and the advancement of a regional digital market based on the participation of new economic activities associated with digitalization, where trade occupies a central place.
In the same lineMarce Gómez Marín, Project Coordinator of the Konrad Adenauer Foundation, He said that the pandemic presents opportunities for international trade, multilateralism, international cooperation and the 2030 agenda for the recovery and development of all countries.
E-commerce in times of COVID-19 at a global level
Torbjorn Fredicksoon, specialist of the United Nations Conference on Trade and Development (UNCTAD) conducted an analysis of developing regions with regard to electronic and digital commerce in the face of the pandemic.
In this regard, he said that “e-commerce and digital commerce are creating opportunities and challenges. The challenge for governments, businesses, consumers and international development partners is to ensure that e-commerce plays a positive and powerful role in national and international recovery efforts.” He noted that global gross domestic product (GDP) declined by 4,3% in 2020. Global trade in goods declined by 9% and global trade in services by 15%. At the same time, the share of e-commerce in global retail trade increased from 14% to 17% from 2019 to 2020. The teleworking, distance learning, online conferencing, gaming and digital entertainment sectors also experienced accelerations in 2020.
The UNCTAD specialist indicated that the COVID-19 pandemic led to a further acceleration of digital transformation and has reinforced the importance of removing existing barriers to e-commerce. He argued that, according to surveys, the accelerated trend towards e-commerce “will likely continue during the recovery.” He further stated that the digital economy and e-commerce “are at the heart of the SDGs,” and provide both opportunities and challenges. The latter involve overcoming bottlenecks such as expensive internet services, excessive use of cash, lack of consumer confidence, low digital skills and low government attention to e-commerce.
The specialist showed that 30% of people in Chile use the Internet for online shopping, while in the United Kingdom it is 75%. In this regard, he said that countries that take advantage of the potential of electronic commerce will be better positioned to benefit from global markets for goods and services in an economy undergoing digitalization, while countries that do not take advantage of this opportunity will be left behind.
What can countries do to improve the situation?
At the end of his speech, Torbjorn Fredicksoon made recommendations for governments, the private sector and the international arena.
The governments They can support these approaches by systematically collecting data and assessing the impact of business policies and practices, identifying critical gaps that require intervention, developing e-commerce strategies that are integrated into broader national development, fostering public-private-civil society partnerships to increase awareness and trust in e-commerce among consumers and traders, and strengthening inter-ministerial and stakeholder dialogues to achieve effective coordination. Businesses in developing countries need to be better prepared to participate in the digital economy, including by increasing their capacities to capture and leverage data, and accelerating digitalization for smaller businesses.
Al private sector It is recommended that existing barriers to speeding up the digitalisation of smaller companies, attention to digital companies, the development of skills in electronic commerce, data collection and management, as well as the strengthening of regulatory frameworks be addressed.
Al international sector It is invited to work with governments, the private sector and civil society. It is also invited to make better use of e-commerce for all, seeking synergy, avoiding duplication and accelerating aid to developing countries.
E-commerce in Latin America, in times of COVID-19
To its turn, Bernardo Díaz de Astarloa, lead author of the report, presented the following findings in times of COVID-19 in the region.
- Significant growth in domestic e-commerce during the pandemic. He described data from Mercado Libre, from August 2019 to August 2020. Sales records per week multiplied by four in markets where trade is established such as Argentina, Colombia, Mexico and Brazil. In places where it is more incipient such as Costa Rica, the Dominican Republic, Central America, Bolivia and Paraguay, the number multiplied by six. In addition, the level of sales went from 33% in the second quarter of 2019 to 102% in the second quarter of 2021 and to 117% in the third quarter of 2020.
- Cross-border e-commerce contracted. According to data from Brazil, there was a drop in imports of packages purchased through e-commerce. Through the Express channel, -22% and through the Postal Service, -35%. The same happened with exports, which were -4,5% and -58% respectively.
- Entertainment services achieved notable growth: Netflix and Gaming (Chile).
- The pandemic has exposed old bottlenecks for e-commerce to grow sustainably in the recovery. The author explained that internet access is of low quality and not affordable in many countries in the region, and the urban-rural access gap is high. The trade facilitation environment and last-mile logistics need to be improved: technology and coordination. In addition, regional integration agreements include few clauses related to e-commerce. Market access barriers persist; informality and low financial inclusion remain obstacles to the expansion of electronic payments, and there are also outdated regulatory frameworks. There are gaps in digitalization and digital skills in most SMEs in the region, particularly those led by women.
- Governments have taken measures to help businesses and consumers, but not all of them are based on strategies with clear diagnoses and objectives. However, In some countries, initiatives were implemented within the framework of a national e-commerce strategy. such as Brazil, Colombia, Costa Rica, Guyana and Ecuador.
- Platforms, sites with information and resources for SMEs, or marketplaces were the most common tools in Argentina, Brazil, Chile, Colombia, Costa Rica and Panama.
- The region had few initiatives to change the regulatory framework facilitating electronic paymentsHowever, Argentina (Transferencias 3.0) and Brazil (Pix) stand out. Both aim to accelerate the integration of companies with the banking system and digital payments.
- There are interesting regional cooperation initiatives to support the digitalization of SMEs: SIECA, Connectamericas (IDB), Kalauo (OAS) and Mipymes2030 Association
Thus, the lead author highlighted that the pandemic confirms the need for a policy agenda in the region to leverage the role of digital trade in recovery, through greater coordination between private and public links, in addition to maintaining the relationship with national digital agendas.
It also required having a A global view of e-commerce to take advantage of opportunities for international integration. And he said it is vital to “accelerate policies to improve the enabling environment for electronic commerce,” including: quality of digital connectivity, modern and agile trade facilitation, reliable and integrated logistics services, financial inclusion and modernization of the regulatory framework for electronic payments and cross-border trade, training of SMEs, measurement of the digital economy and availability of high-frequency data.
The studio “Empowering Latin America and the Caribbean to better leverage e-commerce and digital commerce in the face of the COVID-19 pandemic” is part of the UNCTAD-ECLAC research-oriented project being carried out within the framework of 'e-commerce for all'. There is an initiative, eTrade for all, which aims to address knowledge gaps on e-commerce and foster synergies between partners. (Press release of the event)
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