COVID Restrictions are Driving Demand for E-Commerce Solutions in Central America

COVID-19 is transforming business in Central America, as digital solutions offer crucial ways around physical restrictions during the pandemic.   

The trend has been most obvious with online shopping and home delivery services. International players like Uber Eats, Rappi and Glovo entered the local food delivery market in the mid to late 2010s, and have seen demand for food delivery serge in the region. 

Regional contenders are now actively seeking to increase market share. El Salvador based HugoVentures App is expanding beyond restaurant delivery services and is leveraging the powerful consortium of suppliers including Rodrigo Tona, Familia Kriete and Grupo Imperia. Hugo recently announced a multi-million dollar investment in a new e-commerce platform, hugoVentures, which will allow businesses from a range of sectors to sell and deliver goods using Hugo’s platform and delivery services. HugoVentures is Central America’s first Tech Unicorn. Newcomer, entered the arena in Costa Rica in 2020, proposing a “cost saving” model for consumers to challenge more established food delivery services. 

Local start-ups and tech companies are not the only ones to ride Central America’s e-commerce wave, as evidence shows that more traditional retailers are developing an online presence. According to a study by the Institute of Electronic Commerce for Latin America, the Coronavirus has accelerated digital uptake by micro and small businesses in Central America, 29% of which now sell or buy online. 21% do not have a website or app, but sell their goods and services via social media. In total, an estimated 60% of retailers are servicing customers through home orders in the region. 

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