As recently as 2011, it was virtually impossible to buy anything online in Nicaragua; local businesses had websites to showcase their products and services, but they weren’t digitalizing their sales through e-commerce.
Two years later, the situation is starting to change. There are now more than 80 local businesses selling products and services online in Nicaragua, offering everything from rental cars and kitchen supplies to a friendly little device called the “Lady Bug Tickler.”
That last item sells for $35 on the website Sexy & Sexy Party and Erotic Supplies, one of Nicaragua’s first online-only stores. The virtual sex shop for women was launched last November and—as the sex industry tends to do—is helping to innovate the way the Internet is used in Nicaragua.
Sexy & Sexy is one of only three completely virtual stores operating on the country’s singular e-commerce platform, which was built in 2011 by ALFA, a leading Nicaraguan tech company. ALFA, which provides a full range of Internet services, also manages the websites of 77 other Nicaraguan businesses that have taken the e-commerce plunge.
But what really makes ALFA unique is that the company lends it digital POS (point of sale) to small companies that can’t afford the minimum bank deposit required to process online payments here. That means smaller businesses like Sexy & Sexy can hire ALFA to manage their site and process their online commerce for less money than it would cost them to rent a brick-and-mortal retail space in Managua.
“We pay ALFA $250 a month for all their web design services, hosting, maintenance and e-commerce platform. Where can you rent a store in Managua for that amount of money?” says Leonor Teran, co-owner of Sexy & Sexy. “In addition to renting retail space, we would need to pay a clerk to manage the store, a security guard, and water and electricity bills. An online store is a much more affordable way to do business.”
Lower overhead means Teran and her partner were able to invest more in their startup’s inventory—a titillating collection of ointments and explicitly named devices that shan’t be discussed in much detail on the prim and puritanical pages of The Nicaragua Dispatch.
Needless to say, the nature of Sexy & Sexy’s merchandise also lends itself well to the privacy of e-commerce. As the virtual store becomes known around the Internet, a growing number of women are visiting the site and making online purchases—in some cases , for the first time. The online store, which bills clients’ credit cards using a more ambiguous name than Sexy & Sexy, sends its products wrapped in discrete packaging by motorcycle currier the next day, Teran says.
“So far, most people’s reaction to our store has been very positive; we are making sales every week and already have more than 1,000 likes on Facebook,” Teran says. Most of the store’s clients are Managua women under the age of 30, she says.
Building an e-commerce culture
Even with the new e-commerce platform in place, challenges remain to doing business online in a country with only 10% Internet connectivity and little familiarity with online purchasing.
“There is a need for e-commerce in Nicaragua, but there is still no culture for it here. People are afraid to use credit cards online because they are afraid of electronic fraud,” says Sara Avilés, marketing director for ALFA.
Another deterrent to online business in Nicaragua is the lack of legislation regulating e-commerce, Avilés says. But mostly, she says, it’s a matter of educating buyers and sellers about how e-commerce works and assuring folks that safeguards are in place to protect people’s identities and bank accounts.
While 90% of the webpages in Nicaragua still don’t have any type of e-commerce platform, that is starting to change as people begin to understand the irreversible trend of online business, Avilés says.
And, as Sexy & Sexy has already discovered, many Nicaraguans are quicker to lose their fear of e-commerce when buying locally.
“I think there is less fear buying something online here in Nicaragua than buying something on Amazon or Ebay because people here know that if there are any problems they’ll be able to work it out with the seller,” Teran says. Still, she adds, some of her clients prefer to pay for their products with cash-on-delivery.
Regardless, each “Willie Wrapper” or box of “Mac-a-Weenie and Cheese” sold online by Sexy & Sexy is a minor victory for entrepreneurism in Nicaragua; it shows that the Internet does have the potential to start leveling the playing field for smaller businesses to compete in an economy that is traditionally dominated by a few big fish.
Read part I of this series here.