E-commerce in the Canary Islands

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ELECTRONIC COMMERCE IN THE CANARY ISLANDS

e-Commerce grew in the Canary Islands during 2020 and today accounts for almost 6% of GDP. In order to have real information on the evolution of e-commerce in the Canary Islands, let us look at these indicators: crecimiento en 2020/19 20-25%.

Turnover in millions of euros

  • 2018: 1.607
  • 2019: 1.847
  • 2020: 2.250

The year 2020 saw a boom in e-commerce as a result of mobility restrictions imposed across the country and the consumer acceleration of digital adoption. The growth of this channel (+) in some sectors even reached close to 100% as in the case of food, which has doubled its market share as a result of the uncertainty generated by containment. Data published by ONTSI in the 2019 edition of its Report on e-commerce in the Canary Islands already indicated that the number of people who made purchases online had accounted for an increase of 18% in 2018 over the previous year's figure. The number of Internet users in the Canary Islands who made purchases on the Internet already stood at 837,324 people, and increased by 6.3% the following year, according to data from the INE.

The year-on-year growth recorded in Canary Islands e-commerce in recent years has been very significant:

  • In 2019 it grew by 15% to €1,847 million.
  • In 2020, growth was between 20 and 25%, reaching almost EUR 2.25 billion.

According to data from the Observatorio Canario de las Telecomunicaciones y la Sociedad de la Información (based on data from the ONTSI) in its E-Commerce Indicators Dossier June 2020, Within the context of the Spanish autonomous communities, the Canary Islands has the lowest rate of individuals using e-mail with 48%.

Steps taken by the regional administration to support e-commerce:

Until now, the Canary Islands have had a number of problems that have hindered the normal development of the activity. The fundamental one is its location: The phrase "no shipments to the Canary Islands", where we lead the list in the face of the problem of foreign sellers who do not attend orders to this destination with 4.5% of people who bought online in 2019.

Simplification of procedures:

To remedy this situation, the Canary Islands Tax Agency, a body attached to the Ministry of Finance, Budgets and European Affairs, activated in June 2021 a new system that simplifies the delivery of goods for items under 150 euros, thereby contributing to the deployment of e-commerce and the eradication of the well-known "not shipped to the Canary Islands" tagline. The Tax Agency's new method gives consumers the possibility to make a simple declaration themselves, for which only a valid method of identification is required. (electronic certificate, electronic ID or PIN code) and the shipping or tracking number of the package provided by the seller. You can also ask the carrier to do this if you wish.

Digital economy development bonds:

Other important initiatives of the Government of the Canary Islands aimed at promoting the use of e-commerce by companies and professionals come from the areas of knowledge, economic promotion, trade and agriculture. Among the activities carried out by the Regional Ministry of Economy, Knowledge and Employment through the Canary Islands Agency for Research, Innovation and the Information Society are the digital economy development vouchers, aimed at improving the adoption and use of ICTs by SMEs. Eligible actions include the incorporation of innovative technologies and the development of the company's online strategy: e-commerce, digital marketing and mobile application development.

Support within the framework of the Social Reactivation Plan:

In addition, in 2020, the call for subsidies for the digital transformation of companies has been made. This is a new line of aid in the form of vouchers framed in the Social and Economic Reactivation Plan promoted by the regional government to tackle the crisis caused by the covid-19 pandemic. The purpose of the aid is to carry out projects aimed at the digital transformation of SMEs in the Canary Islands, promoting innovation through the incorporation of ICTs, with the aim of improving their competitiveness and productivity. Eligible actions include the incorporation of technological innovation into production processes and the consolidation of the company's online strategy, so as to develop its digital presence and enhance it as an additional channel for communication, advertising and sales.

Canarias Aporta: 

On the other hand, the Regional Ministry of Economy, Knowledge and Employment has introduced in the 2020 call of the Canarias Aporta programme a new line, called Aporta Digital, to promote the digitalisation of companies in internationalisation processes for a maximum of three years. The projects supported by Aporta Digital, in addition to those related to e-commerce, will be those that facilitate the digitalisation of the company and the connection, through digital media, with operators located outside the Canary Islands. The Canarias Aporta Programme is a line of aid from the Ministry of Economy, Knowledge and Employment of the Government of the Canary Islands that Proexca has been processing since 2015, supporting the internationalisation of Canary Islands companies through specialised technical advice and the financing of business expansion projects outside the Islands. 

Since 2015, the Canarias Aporta programme has supported 180 Canary Islands companies to go abroad, which have achieved a turnover of more than 38 million euros in their first forays into new markets. In relation to e-commerce, the Regional Ministry of Tourism, Industry and Trade has undertaken various initiatives throughout 2020. In November 2020, the Crafts Commission was presented with the electronic marketplace developed so that Canarian craftspeople can promote and sell their products, as well as access other services of interest for the development of their activity. This is the The first internet sales outlet to be created under the Canary Islands Crafts brand with the aim of helping professionals in the sector to adopt new technologies and access a wider market, backed by the quality brand created by the Government of the Canary Islands.

Support for Canarian crafts:

It is hoped that this portal will help to reactivate sales in one of the oldest sectors in the Canary Islands, made up of 87 different trades, 43 of which are traditional and 31 of which are at risk of disappearing, according to the Repertorio de Oficios Artesanos de Canarias (Directory of Craft Trades in the Canary Islands). Through this tool, consumers will be able to obtain detailed information on Canarian craftsmen and craftswomen, as well as their physical shops and the products they can buy through this portal, categorised by craft and by the name of the craftsmen. For its part, the artisan has the opportunity to access an easy system of internet sales, with advanced payment methods, being able to choose the method of payment and the delivery system that most interests him/her.

The portal also has useful information related to the sector, including a calendar of events, with fairs, conferences and other meetings, and an artisan's blog, as well as other information related to the official craft shops open in the Canary Islands. Another of the new features of the portal concerns a specific section dedicated to consumers, where buyers will be able to assess the quality of the products purchased, with a view to continuing to promote the quality of the products marketed under the Artesanía Canaria brand.

Support for small businesses:

In addition, in December 2020, Consume Canarias was presented, a directory of small businesses in the Islands, with a total of 1,812 geolocated businesses. Through this directory, consumers can easily find information on the nearest shops in 18 categories, depending on the type of product or service they are looking for. Businesses interested in being listed in the directory can start the membership process by filling in a form on the website or by contacting associations, chambers or councils.

The launch of this directory coincides with the launch of a promotional campaign, in collaboration with Cajasiete and the Federation of Urban Areas (Fauca), which includes the distribution of vouchers or cards loaded with a balance of 20 euros among the first to register with Consume Canarias. This action is part of a plan to support the commercial sector, which plans to carry out training and aid actions for businesses that want to open their own sales website or integrate into e-commerce platforms. In the field of commerce, it is worth mentioning that new legislation is being prepared to regulate consumer claims, complaints and suggestions.

Support for Canary Islands products:

The new decree would allow users to download complaint forms from the companies' websites and send them electronically to the administration. In addition, aims to harmonise the procedures used by the various administrations involved in consumer complaints. In the primary sector, the Regional Ministry of Agriculture, Livestock and Fisheries has designed a digital platform to make visible and promote the consumption of Canarian products, as well as distributors and shops that are committed to the sale of these products. The winners of the various official Agrocanarias competitions in 2020, which recognise the best Canary Islands gofios, salts, wines and cheeses, can participate in Regala Agrocanarias, and distribution points that work or want to work with these products can also register on the website. 

Creation of export channel:

In addition, in November 2020, a tender was launched for a service to implement and manage an online export and marketing channel for the sale of agri-food products produced and processed on the islands. Its main purpose is to give Canarian producers and manufacturers the possibility of selling their products in mainland Spain and Europe to meet the demand of individuals and professional customers. The service, worth more than 280,000 euros per year and for a period of five years, includes a website for the publication of the product offer, the management software and the logistics operation between the producers and manufacturers up to the end customer purchaser. The website, in four languages, will act as a showcase for the export of products at no cost to producers who wish to use this marketing channel. Island initiatives 

Island initiatives:

In 2020, various initiatives have also been launched by the island councils to promote the use of the internet as a promotional and sales channel. For example, in October the La Gomera Island Council presented the platform "Llévate La Gomera" for the sale of local products through the internet. Local artisans and traders have at their disposal this marketing space with free shipping and return postage for the first year. Other actions such as training in areas such as digital marketing and social networks will be added to the start-up. In the case of La Palma, the "La Palma Fashion Market" space has been set up, dedicated to island companies specialising in textiles, accessories, footwear and jewellery that are members of the Isla Bonita Moda project. The Cabildo of Tenerife has launched the Pesca Tenerife website to support the local fishing sector, which includes an online sales platform for fresh fish caught by the ten fishermen's guilds of Tenerife, with the guarantee of the Pesca Artesanal brand.

In December, the Fuerteventura Island Council, has presented ComerciArte, a web and mobile application that will function as an interactive directory for the promotion of local commerce, to associations and town councils on the island. Another initiative is MercaFuer, the digital marketplace launched to boost Fuerteventura's primary sector. The market is managed by the producers, who can market their products directly through it, without intermediaries.

CONCLUSIONS:

All these measures give a clear idea of the firm commitment of the institutions and the business community to e-commerce, which, as mentioned above, represents almost 6% of the Canary Islands' GDP, compared to the 3.49% it represented in 2018. The upward trend is more than evident. Purchases made by users from companies located in the Canary Islands have seen a very significant upturn. indicators that make it possible to see e-commerce as an activity of the future in the Canary Islands and therefore a good opportunity for entrepreneurs and investors. In 2020, online shopping is much more widespread among Canary Islands companies with fewer than ten employees, and is used by 17.4% of the islands' SMEs, compared to 9.2% for the national average.

These are some of the conclusions of the Report on the Digital Society in the Canary Islands 2020 (eCanarias 2020 Report), which analyses the main indicators on the digital transformation process in the islands in business, as well as in households and citizens, the ICT and audiovisual sector, education and e-government. The fourteenth report reveals that Canary Islands companies with less than ten employees have a similar availability and use of ICT resources to the national average, being below in website use (18.2% compared to 22.5%) and above in the use of social media (31.3% compared to 27.5%). Website availability in Canary Islands companies is growing after two years of decline.

791 PT3T of Canary Islands companies with fewer than 10 employees have an Internet connection. 7.0% of these companies sell via the Internet, compared to the national average of 9.5%.

ADDITIONAL INFORMATION OF INTEREST:

In the east link (see+) you will find official information from the Government of the Canary Islands, current news and available resources related to e-commerce in the Canary Islands.

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TASK

Now that you have learned all about this Tip, you should be able to answer these questions:

  1. Do you consider that the Canary Islands offer you the necessary conditions to set up your e-business?
  2. As an investor from abroad, what is the factor that worries you most about starting up your business in the Canary Islands?
  3. Do you think that the Canary Islands can be a useful platform to extend your e-business to the rest of the world?

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Fernando Weyler

Fernando Weyler

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