Browsing for bargains, Online shopping surges in 2009
Published: Sunday | November 8, 2009
Internet usage has increased significantly in Jamaica since 2003 and, with that has come a surge in the numbers shopping for goods online, reflected in the membership growth of courier company memberships.
"Business is very good even considering the whole recession," says Christopher Barrett, chief executive of the seven-year-old Global Courier Services Limited.
"I would say we have grown about 20 per cent January to October 2009 over the same period last year. We now have 7,000 members."
Barrett believes his business and others like it have taken off because Jamaicans love to shop, they want more variety than they are currently getting from local retailers, "and also, the prices are much better. Even when tax is added, it is less expensive," he said.
Among his own membership he notes that women appear to favour Victoria's Secret and JC Penny, while everyone goes to NewEgg.com for computers.
Amazon.com also sees high usage.
a third branch
In Kingston, Colleen Phillips, managing director of the 11-year-old MailPac - a subfranchise of Aeropost International Services Inc - has opened a third branch in Ocho Rios on the back of this kind of growth.
MailPac, she states, now has 10,000 accounts.
Those operating in the sector estimate that when the smaller service providers are factored in, Jamaica's eshoppers may number as many as 50,000.
At MailPac, items frequently purchased online include computers, computer accessories, electronics, clothes, shoes and books.
Ronald Stevenson, CEO of the one-year-old website hosting VirtualMalljamaica.com, which will, in December, launch its own online mall and an electronic payment card, says there is a big enough market out there.
"The only thing is for Jamaican stores to position themselves to take advantage of this," Stevenson said.
A poll by Bill Johnson released in April 2009 indicates that 16.2 per cent of those who go online locally use the Internet for shopping quite often, and that 37 per cent have actually made an Internet purchase at some point.
Those who shop the most fall within the age range of 18 to 44.
The Information Economy Report 2009 published last month by the United Nations Conference on Trade and Development (UNCTAD), states as well that 47.65 per cent of Jamaicans now use the Internet, a 22.13 percentage rise over 2003 levels of 25.5 per cent.
For the pleasure of shopping throughout the year, Jamaicans pay membership fees ranging from J$1,500 to US$40 (J$3,560). Shoppers also pay the cost of freight and customs duties for the goods they buy.
At Global Couriers, the annual membership fee is J$1,500. To send a one-pound package, the cost is US$5.38; for two pounds, it is US$8.74.
Non-members cannot use the service.
Discounts are gained through a seven-rewards programme where, after the seventh package, five pounds are credited towards the next purchase.
At MailPac Services, which is located in Kingston and Montego Bay, as well as Ocho Rios, the annual membership fee for opening an account is J$3,630, which allows users access to two overseas addresses - one for mail, magazines and catalogues, and the other to receive packages.
Walk-in clients pay no membership fees, but for them, freight charges are higher and they have no access to the mail, magazine and catalogue service.
For regulars, the charge for one pound of freight is US$6 per pound and US$9 for two pounds. For walk-in clients, the charge is US$8 for one pound and U$$11 for two pounds.
There are no limits on weight, but customers are asked to bear in mind that air freight is used, and this is costly. Once in the island, the object will attract local tax charges and insurance billed at a rate of US50 cents for every US$100 of freight.
Christopher Barrett of Global Couriers states that total duties depend on the nature of the object purchased, but, in general, these can amount to 45 per cent of the cost of the item.
"A radio, for example, attracts 20 per cent duty, plus GCT of 16.5 per cent and a 5.0 per cent cess on top of that," he said.
"There is also an environmental levy, which is two per cent."
Even then, he says, "90 per cent of the time, it is still a better price than what can be had in Jamaica".
Popular items purchased at Global Courier include computers, computer parts, clothing, household items, bedroom items, televisions, auto parts and health supplies, mostly from the United States.
According to Barrett, since mid-October, his clients have been able to bring in very large items as the service has struck up a partnership with a shipping company to carry ocean freight.
"If you want to ship anything from anywhere in the world, we can do it."
To shop at Global, members can use a personal in-house credit card or MasterCard debit card on which the maximum obtainable is US$2,500. Membership entitles clients to one other card as well.
Damian Harris of VirtuallMallJamaica.com, which hosts 55 'stores', up from eight, after its 2008 start-up - including some which are being prepared for a pre-Christmas launch - says the sites are currently more effective as information portals than for shopping.
Stores featured include Boss Furniture, Home Choice, which sells Jamaican food including pepper shrimp and Solomongunde, Creative Framing, Oh Baby, which sells baby products, and others, which sell metal art, security devices, including cameras, alarm systems and pet supplies.
Websites are constructed for $15,000 and then hosted for $5,000 on a monthly basis.
"Traffic for most stores has been good. We are getting a lot of browsing," said Stevenson.
The VirtuallMallJamaica.com CEO says he will be launching the shopping portal shopvmj.com on November 25, which will showcase products form all 55 merchants and that shoppers will be able to buy directly with an electronic payment card, starting in December.