Given this promising scenario, will the Latin American region become the golden pot at the end of the rainbow?
It’s an undeniable fact that e-commerce in Latin America is witnessing a steady growth. During 2019, the region had a sales growth rate of 21.3%, slightly above the worldwide average of 20.7%. To these encouraging numbers, there are to add two significant drivers: 430 million internet users (Central & South America), 155.5 million digital buyers, and a social media penetration rate of 64% (Central & South America average).
For the next years, experts expect Latin America to continue on the growth path, as they foresee an increase in e-commerce sales:
Of particular note are cross-borders spending numbers, considering that traditionally Latin Americans prefer domestic online retailers.
When it comes to targeting the e-markets of this fragmented region, growth is the common denominator. Overall, Brazil is Latin American’s leading market, ranked #9 in the world’s biggest economies for 2020, with 2.5% GDP growth and USD 2.201 trillion GDP, according to Focus Economic forecast. And this leadership extends to e-commerce.
But Argentina, Colombia, Mexico, and Peru are also standing out, as the performance indicators reveal:
Given the performance of the above set of leading markets, estimates released for 2020 and beyond seem to confirm that e-commerce will thrive:
Considering that Latin America is the leading region with a 36.03% m-commerce sales growth in 2019, above the worldwide average of 27.5%, the social media usage and the expected smartphone penetration rate of 71% in 2020, m-commerce is the driver that will boost Latin American e-commerce.
Another business opportunity lies within the increasing cross-border spending, not only for retailers but also for payment aggregators due to the role of local payment methods in Latin American countries.
As encouraging as the projections are, merchants will have to overcome some challenges common to the markets in this region:
Although the e-commerce market growth is a foreseen reality for the Latin American countries, it remains the fact that this is a fragmented region – different cultures and traditions, specific characteristics and challenges. A local expert such as BoaCompra is a key partner that will help companies unveil each market’s 2020 forecast report.
Get in touch with us to learn how BoaCompra can help your company expand to this promising market: