Shopping on- the -line

Pandemic drives e-commerce adoption across LatAm.

If any industry has ‘won’ from the pandemic it is e-commerce as Latin Americans were forced to overcome their long-held fears of fraud, unfulfilled orders, refunds, payment options, etc.

According to a strategy consultant, “More than 10 million Latin Americans who had never bought products or services online are now doing so regularly.” Another data point came from Mercado Libre, LatAm’s e-Bay, which saw buyer numbers increase 45% in Q2 alone.

It wasn’t all plain sailing though, many businesses struggled to deliver the promise of e-commerce, a digital entrepreneur in Peru says, “The largest e-commerce companies failed massively with logistics – nobody was prepared for the surge in online orders – but smaller businesses thrived as they could use other delivery options e.g. Glovo, Chazqui, Uber etc.”

Despite these challenges, is the boom in e-commerce going to persist, grow or recede?

“The pandemic has accelerated e-commerce by 5 years.”

Non-executive director of Chilean shopping mall business

A non-executive director of a Chilean shopping mall business operating across Latin America thinks e-commerce is here to stay but not at the same level, “The pandemic has accelerated e-commerce by 5 years due to the restrictions on the mobility of people. The pandemic will pass and the large retailers will recover market share but e-commerce is now an established option.”

The CEO of a digital start-up also talks his book, “Habits have been changed and they are here to stay, the big winner is e-commerce and in turn the consumer, the trend will continue.”

“Habits have been changed and they are here to stay, the big winner is e-commerce.”

CEO of a digital start-up

A senior account manager at a Peruvian payment platform has a more nuanced view, “It depends on the country: e-commerce has already penetrated 60 – 70% in Colombia and so is well-established but there is only 18% penetration in Peru and there are structural problems in the market that need to be fixed first.”

Governments across Latin America are increasingly excited by the growth of e-commerce and are looking at ways to benefit from the digital shift: Brazil’s Ministry of Economy is seeking to apply a 0.2% tax on electronic transactions and Mexico is discussing similar measures. The CEO of a digital platform in Colombia thinks the whole region will follow, “There is no doubt that [the government] is going to look for ways to make money from this trend, taxes will hit our margins.”

Are you looking to enter Latin America’s emerging e-commerce industry? We can help inform your local strategy, understand regulatory dynamics and assess other local market conditions that could be risks or opportunities for your business.

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