The state of eCommerce in the Caribbean

By Ed Kennedy

The future of the Caribbean is digital. The rise of the online economy is set to grow new businesses and transform existing ones. Though the foundations of this change are strong within our region‚ growth will not just happen. This is evidenced in the field of eCommerce‚ where much progress has been made but more can still be done.

What is the state of eCommerce in the Caribbean?

At its core, there is a key theme seen across a number of areas in regional business. It is clear that the people of the Caribbean hold great talent and the potential to seize upon the advantages offered by eCommerce but traditional – what we could now only call outdated – structures have limited its capacity to grow.

This issue is not confined to our region alone. That’s why even though Japan is viewed as a hyper-modern economy on the cutting edge of technology in Asia, its heavily cash-dependent economy also sees it behind the pace in some economic indicators that laud digital finance and transactions.

How will eCommerce grow in the Caribbean?

While other nations and regions around the world have looked to rapidly shift to a financial architecture that seizes upon the future‚ the Caribbean has been slower to create change in our banking system and practices, change that enables regional entrepreneurs and businesses to quickly and easily shift their business from bricks and mortar to online operations. Even when they do‚ greater fees or red tape can be an inhibitor to generating new ideas and enthusiasm.

More widely‚ there’s the challenge of regional co-operation. The potential for the Caribbean to grow greater trade ties and relationships within our region is considerable but shifting that longstanding potential into actionable policy is more difficult. Underpinning all this is the irony that the Caribbean is recognised as a leader of global finance (controversies in it notwithstanding).

But it is in this field that good results can be pursued on the ground floor, ones that benefit not only the billionaires who may bank in our region via a Citizenship by Investment Program but also the entrepreneurs looking to start a new venture‚ and existing businesses seeking to go digital and build for their future.

Put simply‚ the Caribbean already leads in one field‚ so the architecture exists to build a leading advantage in the other.

Where will action come from?

eCommerce in the Caribbean has potential but it must not remain something ‘with potential’ for too long; it will need clear and steady signs of growth for the region to capitalize on it.

The International Monetary Fund has cited strengthening the business environment as crucial to the Caribbean’s future. Signing a new free trade deal or creating 10,000 new jobs cannot be done with the stroke of a pen but regional governments creating a more proactive culture for eCommerce growth is more a matter of modernizing reforms over gigantic changes. As progress on these reforms could occur relatively quickly, so could seeing strong results from it.

While governments will play a vital role in this field‚ the real momentum to drive change will come from business. This can be an area where big and sweeping change is brought in – which chamber of commerce wouldn’t be delighted to think the next Amazon is being built in its community? – but it can also be small things.

The development of local eCommerce content, like plug-ins, is something that could be done inexpensively locally‚ but really help build the Caribbean brand in eCommerce regionally and globally.

Nonetheless‚ while the greatest innovation may come from the private sector‚ it’s a reality that government that will play a core role, no matter what, due to eCommerce’s need for good infrastructure, namely electricity prices and internet speeds. It’s here that initiatives like the GO Network pilot in St. Lucia could not only improve our country’s digital brand in tourism but jumpstart a new era for eCommerce.

The growth of eCommerce in the Caribbean would also bring benefits beyond the online arena, chiefly‚ the possibility to cut through existing irritations in daily life.

Customs and charges

Many members of the Caribbean family have known the frustrations of a run-in with customs and border controls. You’ve bought a gift from overseas (and are likely annoyed by, but ready to pay, high shipping and insurance fees), only to find on arrival here that your wallet needs to open again.

This was the experience of Lorne Charles, a manager of a popular holiday resort in St. Lucia. Having arranged for a friend to buy him an iPhone for his son as a 2017 Christmas gift, the experience soon turned sour. First there was a delay in shipping, even though Charles had paid for express post. Then the real pain came, when Charles found out that the St. Lucia Customs and Excise Department had detained his phone.

After being informed that he would have to pay in excess of EC$1,000 (US$370) to secure release of the phone, Charles elected to return the phone. He was then informed that he would have to pay 35 percent of the phone’s total value, simply to send it back.

The world is shifting to an online and globalized economy but this experience led Charles to feel that he was doing business far from that world.

Growth in eCommerce will not remove overnight existing problems in other areas of regional businesses, like customs and tariffs, but it would shine a light on them. Many professionals like Charles still prefer to buy goods from the United States or EU market as the diversity of their offerings can go beyond local supplies.

It is easy to identify why so many consumers in our region would be enticed by the idea of a local business intent on delivering change here: a local eCommerce business that can buy in bulk, drive a hard bargain on shipping and handling fees, and deliver products locally, more quickly.

The urgency factor

In some respects there is time on the region’s side. It is estimated that only 50 percent of the world has internet access‚ and only 43 percent access the online world via mobile.

To a degree, this means that the digital audience is still growing. As it does‚ many local entrepreneurs and businesses that previously felt the timing wasn’t right may then throw their hat in the ring and start up an eCommerce operation.

Just like running a race‚ every nation may be progressing to a digital economy‚ but there is a big difference between those leading and the ones who will follow. The challenge for the Caribbean is to embrace the speed of competition‚ and look to lead it.

The eCommerce competition

In an era where the world is seeing an increasing convergence of dominant tech companies – with the likes of Google, Apple, Facebook and Amazon being so far ahead of competitors as to make many comparisons simply redundant – the potential for the expansion of these companies (especially the eCommerce giant that is Amazon) means that our region must not mistakenly regard internet speeds and eCommerce as a chicken and egg scenario.

It is clear that one can come before the other, and indeed must. Pursued in this vein, with an ambition to source locally and sell locally, over time the potential for the Caribbean to not only reduce costs at home, but begin to build a new business identity abroad in the digital era, is a very exciting one.

The original version of this article was published in The St. Lucia Star.