PRESIDENT of the Couriers Association of Jamaica, Mark Gonzales is not swayed by arguments from retail business owners that their earnings will dwindle from the Government’s decision to increase duty-free allowance on personal items by 100 per cent effective April 1.

His stance is that consumers should have the option to choose between different shopping modalities, but he also believes that the increase of US$50 on the current free on board (FOB) value of US$50 is still not significant enough to put a dent in the revenue flow of local brick and mortar stores.

His sentiments echo that of Opposition Leader Mark Golding who has been urging the Government to consider raising the duty-free allowance further to US$150. Additionally, the PNP leader had reiterated its proposal to lower the cost of clearing barrels at the wharf, currently at $6,500 per barrel.

“I hear local retailers are worried about it but it’s just like when it was moved from US$20 to US$50, there will be some pushback. With the movement in exchange rate and all that, if you put it into perspective US$100 is really not that much,” Gonzales told the Jamaica Observer.

But local retailers say they were already feeling the pinch from customers’ migration to online shopping over the past five to 10 years. They anticipate that sales will shrink even further with the Government’s decision to increase the FOB value to US$100. Additionally, the threshold for Jamaicans returning with goods bought overseas will move to US$1,000, up from US$500.

Finance Minister Nigel Clarke says the move will result in the Government giving up between $1 billion and $1.5 billion in annual revenue.

E-commerce has fundamentally altered the way companies market their goods, how consumers make purchases, and how they receive their items. The concept has been around since the 1960s but evolved significantly with the introduction of new technologies like mobile devices and social media platforms.

Amazon, eBay, Shopify, and BigCommerce were some of the early e-commerce giants, and as the Internet and technology advanced, e-commerce has expanded from large multinational corporations to include small online shops.

The changes over the years in how consumers shop has caused some to reshape their business model, but it’s the disruption in traditional industry structures which has also pushed some businesses into death valley.

“It often comes down to how willing a company is in repositioning itself to respond to the needs of the market. Quite frankly, I don’t see a great fallout from the increase because there are persons who want the instant touch and they will continue to go in the stores,” Gonzales said.

“Because the global market is available and the options are there, so persons will search and find the goods that are below the threshold — and right now a lot of the items that are coming in are very small items [such as] cellphone cases, a charger, or a clothing item.

He added that if people can find similar items in Jamaica, of like quality and at a reasonable price, more often than not they will opt to purchase the product in-store.

Data coming from local brick and mortar stores, and courier companies with forwarding service in Miami, are that consumers’ purchases continue to be a mixed bag. Both local stores and courier companies saw a significant uptick in purchases over the four-day Black Friday and Cyber Monday sales period.