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While it’s obvious that Latin Americans don’t buy online at the same huge volume of Americans or Europeans, it’s also obvious that the region’s e-commerce commerce market is no longer tiny and limited to just a wealthy few. According to a recent story from América Economía magazine, e-commerce sales in Latin America totaled $10 billion in 2007—and tripled to $30 billion by 2010. In 2011 e-commerce sales hit $43 billion and according to the magazine’s projections, online sales in Latin America will total $69 billion by 2013. While nowhere near the $161 billion in e-commerce spending of the United States in 2011, Latam has come a long way from the $1.6 billion in e-commerce sales it posted in 2003.
Brazil is the Biggest
It’s not surprising that the region’s largest country would be the biggest e-commerce market: currently Brazil accounts for 59% of the e-commerce sales in Latin America. In addition, América Economía also notes that there are 173 million credit cards in Brazil, where the population totals 195 million. While this doesn’t necessarily mean that over 80% of Brazilians have credit cards, it does reveal one important factor that drives the size of the country’s e-commerce market. Another is the e-commerce division created by Correios, the country’s national postal firm, which currently has 40% market share in a shipping market with nearly 30 competitors. The country has also encouraged e-commerce by reducing taxes, interest rates and permitting free returns for products bought online. Given this, it’s no surprise that Wal-Mart, Apple and Amazon all have plans to open offices in Brazil this year.
Mexico is #2 in e-commerce in Latin America, with 14.2% of the sales. The Caribbean is third at 6.4%, followed by Argentina (6.2%), Chile (3.5%), Venezuela (3.3%), Central America (2.4%) and Colombia (2.3%). The Asociación Mexicana de Internet released a study about e-commerce in Mexico for 2011 that covered buying habits and top-selling products. You can find it in our Resources section.
Recently, the Cámara Argentina de Comercio Electronico (Argentine Chamber of E-Commerce or CACE) released a study of the country’s online shopping market that showed growth of 49.5%. Other interesting figures from the CACE study include:
• 29.5% of Argentina’s Internet users engage in e-commerce—9 million shoppers
• 57% of dotcom businesses have implemented an m-commerce option to handle the growing amount of shoppers who use their mobile phones to shop online
• The e-commerce market in Argentina will grow 41% in 2012 to reach a total of 16 billion pesos
• 75% of Argentina Internet users research products online before buying them offline
• 89.6% of Argentine online shoppers use local firms for e-commerce and the most popular is Mercado Libre, while 10% use foreign firms like ebay and amazon
• 63% of Argentines who buy products through the Internet use a credit or debit card, 49% pay cash and 6.7% use bank transfers
Find out more here.
Other Factors in Latam E-Commerce
In its coverage of e-commerce in Latin America, America Economía noted that the original projection was sales of $35 billion in 2011. To explain why sales ended up being greater ($43 billion), the magazine cited several contributing factors:
• The launch of newer firms like Geelbe like Cuponaso to supplement larger firms like Peixe Urbano and Mercado Libre
• Social gaming sites like Vostu and Mentez that contribute to e-commerce via the sales of lower-cost online games
• Other forms of social commerce via immensely popular sites like Facebook
• Companies offering customers the option to purchase products online but pick them up at the stores, which saves both money and time for them
• The explosion of Latin America’s mobile market, which has led to users making purchases via smartphones and tablets
To read the complete América Economía story, click here.
To find out how you can reach this growing market of Latin American consumers, please contact us.