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Is e-Commerce Undercutting Local Businesses?

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If anyone has any doubt that e-Commerce is here to stay, then they should take a look at the number of brick and mortar businesses that have closed their doors in the last five years. For those businesses that adapted to the advent of e-Commerce technology, the switchover couldn’t have come any sooner.

e-Commerce is Here to Stay

The fact is, e-Commerce is here to stay. eCommerce, or electronic commerce, is the buying and selling of goods using the internet. Jamaican consumers, ever on the lookout for bargains, see online shopping as a lower cost option to traditional shopping. Such online shoppers consider convenient services and high-value items as good reasons to shop online.

While not all local companies are convinced that the Jamaican consumer is moving online in droves, there is enough indication that the shopping landscape is shifting. Reports suggest that Jamaicans under the age of 35, and those who travel overseas regularly, are more likely to shop online.

More Jamaicans Choose Online Shopping

As technology changes for the better, more transactions are taking place online. Indeed, there was a time, not too long ago when Jamaicans shied away from online shopping. They preferred, instead to shop the usual way. With the emergence of strong online shopping sites as Amazon, Shopify, and eBay, Jamaicans are more inclined to pull out their credit or debit cards for an online product. Things even got easier with the various shipping options now available from courier services like DHL, MailPac, and ShipMe.

Not surprisingly, the number of courier services that offer international delivery grew from seven in 2015 to more than 20 companies today.

So, are local businesses preparing themselves for the inevitable spread of e-Commerce?

Jamaica is in a Good Position for e-Commerce growth

The reality is, Jamaica is in a good position to capitalise on the growth of e-Commerce. First, the country has an E-Transaction Act that came into effect twelve years ago – in 2007. This is the legal framework that allows for a secure electronic commerce process for Jamaicans. Banks, utility companies, and large companies adapted to the rapidly changing e-commerce landscape by offering online services to their customers.

Unfortunately, medium and small companies lag behind the eightball. Few medium and small businesses have a website to send customers. Just as few have a strong social media presence or any at all. Regardless of the findings from the 2017 National Population Census that 84 percent of Jamaican household possess mobile phones, and 35 percent of Jamaicans access the internet, few Jamaican companies are fully capitalising on this trend. Undoubtedly, access to the internet by Jamaicans is moving upward. Already, Jamaica in the World Economic Forum’s 2017-18 Global Competitiveness Index is 89 out of 137 nations for access to the internet (measured as a percentage of internet users in the total population). This is a very strong signal that the future of online transactions in Jamaica is bright.

Adjust Import Duty Regimes – Says PSOJ President

Meanwhile, Dennis Chung, the ​​​chief executive officer of the Private Sector Organisation of Jamaica (PSOJ) suggests that Jamaican government should bring about policies that capitalise on the growth of e-Commerce. He believes that with the introduction of duty-free shopping, for example, Jamaica can become a sought-after shopping destination. This move will, according to him, also eliminate goods smuggling into the island. He is calling on the Jamaican government to pay more attention to the changes taking place in the global economy.

With regards to the imposition of import duties on goods, Chung argues:

“We put so many barriers up that if that trend actually continues, then local businesses can lose out. We don’t have to produce the goods, but we can be seen as a shopping destination like other islands.”

Once Jamaica adjusts its duty regimes, more e-commerce activity will take place. Such a move would be to the ultimate benefit of the island’s economy.


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