Some helpful advice about eCommerce & Content Marketing.
Covid-19 had an enormous effect on consumer shopping habits in Latin America, perhaps more than in any other region. Out of necessity, people became devoted ecommerce shoppers for the first time, buying essentials such as groceries, household goods, and apparel.
Those habits have continued, making Latin America one of the most rapidly growing ecommerce markets.
Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico, Panama, and Peru comprise the top online markets. Collectively in these eight countries, 79% of the population have internet access, and 50% of them shopped online in 2021, according to research firm RetailX, up from 33% in 2017.
While Costa Rica, Panama, and Peru have limited ecommerce revenue because of small populations, Brazil, Mexico, Argentina, Chile, and Colombia are showing impressive ecommerce gains.
Impediments to Growth
Hurdles remain in Latin America — primarily payments and logistics. Half of the population has no bank account. Rural areas have few roads. Hence marketplaces providing solutions for consumers and businesses dominate the region’s ecommerce.
Argentina’s Mercado Libre is the preeminent player. According to Bloomberg Intelligence, Mercado Libre’s revenue grew 90% in 2020 as the pandemic forced the closure of brick-and-mortar stores. Mercado Libre offers its own logistics service that provides shipping options and warehouse stocking for local and overseas merchants. Like Amazon, Mercado Libre has its own air cargo fleet and delivery trucks operating in larger markets, primarily cities.
Additionally, last year Mercado Libre acquired Kangu, a Brazil-based logistics company that also operates in Colombia and Mexico. And Pago, Mercado Libre’s fintech arm, serves as a payment processor. Consumers in Brazil and Mexico can also use PayPal for their Mercado Libre purchases.
Consumers in Latin America remain suspicious of the quality of online goods and rely on customer reviews. Groceries dominated online sales during the pandemic. But in 2022, electronics generates the most sales in the top eight countries, according to Statista, followed by fashion.
Mobile usage varies by country, according to Statista. Brazil has the strongest preference for mobile for online shopping at 48% in 2022, up from 27% in 2017. Colombians and Costa Ricans also are devotees of mobile commerce, but usage has not increased as much over the past few years.
The following data is from RetailX unless otherwise noted.
Brazil. In 2021 online sales were more than double what they were in 2019 and 30% higher than in 2020. Eighty-four percent of the population uses the internet, with 53% of internet users shopping online — up from 38% in 2017.
Brazilian ecommerce shoppers tend to be younger; roughly half are less than 35 years old. Only 9% are 55 or above. The average annual online spending amount is $397.
Chile. Chile has the highest proportion of internet users and ecommerce adoption. Ninety-four percent of the population uses the internet, and 62% of those users shop online. Chile has a higher gross domestic product than most Latin American countries, and the average annual spend of ecommerce shoppers is high at $780 thus far for 2022.
Colombia. In 2021, Colombia was Latin America’s third-largest ecommerce market. Forty-nine percent of internet users shop online, an increase from 28% in 2017. Fifty-three percent of those shoppers are 34 or below. Transportation networks in Colombia are poor and inadequate for fast delivery, but consumers seem undeterred.
Costa Rica. Costa Rica’s population is just 5.2 million. Eighty percent are internet users, but only 45% shop online. Nevertheless, the preference for online purchasing has been doubling since 2017. The average annual ecommerce spend will likely reach $711 in 2022 — up from $477 in 2019.
Mexico. Ecommerce revenue in Mexico grew by 81% from 2019 to 2020, according to the Mexican Online Sales Association, making it the fourth fastest-growing ecommerce market in the world.
Mexico will likely have around 77 million ecommerce shoppers by 2025 as improved infrastructure and digital literacy drive adoption. That’s up from 50.7 million ecommerce shoppers in 2020.
Mexico has experienced the most substantial shift to online of all Latin American markets, especially for groceries, which have grown over 100% since the pandemic began. Seventy-six percent of the population were internet users in 2021, with 44% shopping online, an increase from 26% in 2017. Online buyers will likely spend an average of $727 in 2022 versus 2017’s $249.
Panama. Of Panama’s 4.3 million residents, almost three-quarters are internet users. Forty-six percent of those users shop online, up from 25% in 2017, purchasing an average of $710 in 2022.
Peru. In 2021, 71% of Peruvians were internet users. Forty-four percent of the users shopped online in 2021, compared to 25% in 2017. A third of ecommerce shoppers in Peru are 25 to 34 years of age, while 20% are 45 or over.
This post “Ecommerce Flourishes in Latin America” was published here.
We hope you found the article above useful and/or of interest. You can find similar content on our blog here: blog.hostfast.com/blog
Please let me have your feedback below in the comments section.
Let us know what topics we should cover for you next.