The Latin American market potential for 2021 (in numbers)

Brazil

Brazil represents massive opportunities in volume, growth, and new users coming into the online industry for the first time.

The country is the favorite option of most international merchants coming to Latin America mainly because of its size. And even though Brazil is the largest market in Latin America, there is still a part of the population who have not yet migrated to e-commerce. The good news is that the online market is growing day by day, e-commerce users grew by 25% in 2020 to reach an estimated total penetration of 61% by the end of 2021.

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Mexico

Mexico is a large market with more than 100 million people and therefore with a large e-commerce market.

But Mexico has been particularly laggard in adoption of digital technologies. You have the upper-middle class who look and feel like folks who live in first world countries, fast technology adopters are very comfortable with e-commerce. Then you have a large segment of the population that still operates very much in cash, in the informal economy, and is much slower to adopt digital payments and digital goods. What is exciting about Mexico is the acceleration under the pandemic, that is particularly strong in the region that has a large underserved population when it comes to payments and digital adoptions.

The e-commerce users in Mexico is expected to grow 31% in 2020, already at an e-commerce penetration of 60%, pretty decent and that will grow faster than it’s growing in Brazil, at 31%. So Mexico is an exciting market for the increasing adoption of digital goods, the country has a rapidly growing market.

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Argentina

Argentina is always an exciting market to look at. Even if the country tends to be prone to ups and downs in its political and economic stability.

In 2019, Argentina has really suffered pretty severe currency volatility. What makes Argentina a very attractive market is, despite delays in modernization because of the government and the regulatory environment, a highly tech-savvy population. First adopters in technology, lovers of global brands, there is a slower rate of growth because of the higher penetration growing only 5% in new e-commerce users in 2020. This means that entrepreneurs have a very eager population to go after.

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Colombia

Colombians are really connected and strongly influenced by digital trends and technologies.

Colombia has an urbanized population who are very used to technology and are already avid adopters of digital goods. Also, outside the major cities, people are coming to e-commerce for the first time. In 2020 the e-commerce penetration was at  55%, and the online user growth at 29%. The numbers are impressive, as some of the people living in the suburbs and rural areas of the country are moving into e-commerce and are ready to adopt digital goods.

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Chile

Chile is a dynamic Latin American country, full of opportunities.

Chile has an interesting online market, a bit of a paradox, because on one hand, Chile has the most banked population in the region, almost everyone has access to a debit card and a bank account in Chile, making it really prepared for e-commerce. At the same time, because of the closed acquiring landscape in Chile, we’ve seen lower levels of new technologies moving into the region.

The country also got a deep e-commerce penetration, similar to that of Argentina, of around 61%. A slower growth rate of new people coming to e-commerce: 6%. But you’ll get a captivated audience in the region, there is a real opportunity to expand to Chile and get in the door in the early stages taking advantage of this acceleration we’re seeing under the pandemic.

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Peru

Peruvian online market is really growing. Now is the time for you to get in the door, get ahead and take advantage of all this new population using e-commerce for the first time.

The country has the largest informal economy, the largest penetration of cash and the lower levels of development when it comes to digital adoption and transformation. Entrepreneurs have a laggard country now under massive acceleration pressure, you see people are going to move to advanced stages of digitalization more rapidly and leapfrog some of those intermediate stages. While Peru has the lowest e-commerce penetration of 51% – about half of the population uses e-commerce – we see the highest growth rate of new users, at 32%. It’s your responsibility to escort these new e-commerce users through that life cycle, making sure they have a positive and personalized experience throughout their journey, and if they do, they will remain loyal customers.

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Key considerations to expand your business to Latin America:

The interesting fact is that if we compare Latin American market with other markets such as the US market or European market, we’ll see that LatAm is growing faster than the other regions. Just for instance, retail online marketing in LatAm made growth 21% in 2020, while in other regions such as European market, this rate will occur in 3 years.

Another fact that makes the Latin America an attractive market is the constant growth of internet penetration. Especially now with the COVID-19 people are buying online more than ever. Therefore you can have a broadest reach and increase your sales in the region.

It may sound cliché, but you need to explore the possibilities and be creative when doing business in Latin America. Look at the markets outside of (maybe the top one or two that you are most familiar with), look for opportunities beyond that borders and know that there are myriad ways to develop business in Latin America.