Business

In Chile, online spending on retail hits 148% growth in the second quarter of 2020

According to the country's National Chamber of Commerce, online retailing developed in three months what was expected for three years

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  • The results show that in the first half of the year, online payments in general increased by 33.1% YoY, 10.8 percentage points more than the rise in the second half of 2019;
  • Regarding the quarterly result, the first quarter of the year hit a 19.8% YoY growth while the second quarter grew by 44.5%;
  • Despite retail’s great results, tourism had a drop of 48.8% in its online sales during the first half of the year, due to the hard impact brought by the pandemic.

The National Chamber of Commerce, Services and Tourism of Chile (CNC) launched its new Online Sales Index, held every six months by the organization along with data provided by Transbank on online sales made with credit and debit cards in the country. In the first half of 2020, digital payments rose 33.1%.

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The results show that in the first half of the year, online payments increased by 33.1% YoY, 10.8 percentage points more than the rise in the second half of 2019. Regarding the quarterly result, the first quarter of the year hit a 19.8% YoY growth while the second quarter grew by 44.5%.

Retail was the sector driving the greatest online spending, with an increase of 41.5% in the first quarter, while the second quarter rose by 148.3%. Considering the growth by semester, online retail ends the first half of 2020 with 102.6% growth, comparing with the same period of 2019.

The digital channel will continue to gain ground. Although once the pandemic is over the share it has reached will drop, it is also expected to double compared to what we had at the end of 2019

Bernardita Silva, REsearch Manager at CNC.
Source: CNC Studies Department with Transbank data. Image: Reproduction

Tourism, on the other hand, had a drop of 48.8% in its online sales during the first half of the year, due to the hard impact brought by the pandemic. In the first quarter of 2020, the sector recorded a drop of 13.5%, and during Q2, the decrease reached as much as 83.2%.

“The retail sector has experienced during this pandemic an explosive increase in digital sales, the share of the online channel almost tripled in the face of the closure of physical stores,” says Bernardita Silva, research manager at CNC.

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“This has also evidenced a significant increase in businesses that
use platforms and the number of customers who buy through them. Marketplaces have incorporated new suppliers and considerably increased their sales since March.” According to the report, sales coming from social media also recorded expressive growth, “something that also opens the way to a high informality in the digital channel.”

Services, comprised of education, banking, financial, and real estate, among other categories, increased by 22.6% in the first quarter of 2020, and 43.9% in the second. In the first half of the year, the sector hit an increase of 34% in comparison with the first semester of 2019.

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“This boom is at the same time creating huge challenges in logistics and customer service, since the market was not prepared for this sudden and strong growth,” Silva added. “It developed in three months, which was expected to develop in three years, which has meant quickly adjusting business models to best meet this growing and changing demand.”

According to the organization, both physical and digital channels will have to coexist, in order to increase touchpoints with the Chilean consumer. “The future challenge will then be in the agility and speed of digitization and in the ability to respond quickly and dynamically to changes in the environment.”