A study on the state of cross-border e-commerce in Latin America - Focus on Brazil, Chile, Colombia and Mexico
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
A study on the state of
cross-border e-commerce
in Latin America
Focus on Brazil, Chile,
Colombia and Mexico
POWERED BY
INTRODUCTION
INTRODUCTION
We present
you a new
Latin America
Home to more than 600 million We are talking about the increasing
people, Latin America must be read e-commerce penetration among
through a particular lens from now Latin American consumers, sustained
on: before and after the COVID-19 by the access to smartphones
pandemic. In this Beyond Borders and the internet, as well as the
2020/2021 study, we will briefly undergoing fintech revolution in
show you the main impacts of this the region and its consequential
unprecedented health and economic greater usage of digital payments
crisis in the region, but also the bright and banking services in general.
side of it (yes, there is one). In the end, COVID-19 has been
You will see that, despite the decisive for paving the way to
political uncertainties and the the rise of a new, more digitally
economic setbacks brought by the inclusive Latin America – which
COVID-19 pandemic, trends that is also key to the growth of digital
were already in place before the commerce in the region as a whole
coronavirus were pushed further. in the coming years.
2
INTRODUCTION
In the end, COVID-19 Beyond Borders 2020/2021 To better understand the changes
has been decisive for was made especially for that the region has undergone,
global companies that especially in the recent months, we
paving the way to the
know little about the Latin looked into renowned public sources
rise of a new, more American market and the (from the World Bank to GSMA
digitally inclusive Latin transformations that the region open reports), talked to several key
America – which is has recently experienced. industry experts, and counted on
also key to the growth Curated by EBANX experts, this figures and forecasts provided by
study provides a contextualized Americas Market Intelligence (AMI),
of digital commerce in
portrait of the behavioral a leading consultancy and research
the region as a whole in trends that shape the region’s firm specialized in Latin America.
the coming years. payments and e-commerce According to AMI, the
market. e-commerce industry “will look
wildly different than it did in
An intelligence effort 2019 or ever before”. Although
in five acts an important part of AMI’s data,
In order to paint the big picture of what travel was the segment most hit
to expect from Latin America after by the COVID-19 pandemic, and
COVID-19, our mission in the first part its behavior throughout 2020 was
of this Beyond Borders 2020/2021 study nothing like the previous years.
was to seek the most reliable external Therefore, we decided to concentrate
data about the region’s potential for the efforts of the second part of the
digital commerce, with a special focus Beyond Borders 2020/2021 study,
on the two largest Latin American based on EBANX’s internal data and
economies – Brazil and Mexico –, as on an exclusive survey with Latin
well as the fastest-growing economy American consumers, on retail and
in the region, Colombia, and the most digital goods verticals.
digitally evolved country, Chile.
3
EBANX
INTRODUCTION
EBANX is a global fintech company that They talked to us about the main
bridges the access gap between Latin drivers and barriers in their
Americans and international companies consumption journey, especially
such as AliExpress, Wish, SHEIN, Uber, when it comes to localization and
Spotify and Sony PlayStation. EBANX digital goods and services.
is heading to close 2020 with 1 billion Finally, we bring together some
transactions processed. It’s through this of the main trends that are not only
highly valuable internal data that we reshaping the region’s market today,
bring you unprecedented insights about but that will continue to do so in
the usage and the relevance of cash- 2021. From the potential of PIX,
based and alternative payment methods Brazil’s instant payment system,
(meaning all the methods except cards) to the challenges and solutions
and the influence of the exchange rate being implemented to improve
on purchases made by Latin Americans. e-commerce logistics in the country.
To further explore all this From regulatory changes in the
background, we also carried out an Chilean acquiring market to the
exclusive survey with 3,280 Latin rapidly growing fintech ecosystem
American cross-border consumers, in Colombia.
mainly from Brazil, Mexico, As a final result, in the next pages,
Colombia, and Chile that bought you will find the most comprehensive
international products and services study about Latin America’s potential
in the last 12 months. for digital commerce.
If you have any questions, do not
hesitate in contacting EBANX Market
Intelligence Team through the email
market.intelligence@ebanx.com.
4
On the
INTRODUCTION
Retail Digital goods
same page Retail is generally related to and services
physical goods, from department This is generally related to
To be sure that we are on the to grocery stores and marketplaces. products and services such
same page, let us present you But when it comes to EBANX as app downloads and in-app
a small glossary of the main internal data we are talking purchases, online gaming,
e-commerce (which we also mainly about furniture, home digital downloads, music and
refer to as digital commerce appliances, home decor, video streaming, ride-hailing
clothes, cosmetics, fashion services, food delivery, software
in the text) segments that
accessories, and electronics, downloads, open and online
we will explore in this year’s usually sold in big marketplaces courses provided by educational
Beyond Borders study: mainly by Asian sellers. institutions, and subscriptions
and recurring payments. But
when it comes to EBANX data,
we are talking mainly about
Travel streaming and gaming segments,
All services related to travel including services that require recurring
airline and bus tickets, hotels and payments most of the time.
accommodations, packages sold
by travel or tour agencies, etc.
About
Traditionally, AMI’s research is conducted document. At the beginning of 2020, AMI
using two research methodologies: 1) began updating its e-commerce dataset to
AMI’s
desk research, accessing both local and reflect full-year 2019 using the methodology
international public sources; and 2) interviews described here. Halfway through March, due
data with key industry executives. Public sources
include reports conducted by local industry
to the coronavirus outbreak, this methodology
changed a little bit. AMI scrapped all of the
chambers, associations, and research firms, as forecasting work completed up until that
well as reports made public by international point and came up with a new model to
organizations like eMarketer and Nielsen. predict what would happen in 2020 and
The bulk of the data, however, comes from 2021. The consultancy’s new models forecast
interviews with top e-commerce industry e-commerce growth by industry and cross-
executives, including payment processors border/domestic spend on a month-by-month
and acquirers, card issuers, online payment basis through 2020 and for some industry
gateways and payment service providers, and segments, through 2021. To create the
top merchants in all product verticals. Once forecasts contained in this report, AMI’s experts
data is collected from primary and secondary made certain assumptions about future
sources, AMI compared, cross-referenced, consumer behavior and consumption trends,
and triangulated all collected data points to based on what they knew about COVID-19 in
arrive at the final dataset contained in this the latter half of March and early April 2020.
5
INTRODUCTION
Index
1. 2. 3.
Why Latin America, Latin America’s The payments
and why now? potential for landscape
07 Latin America’s market e-commerce 34 How Latin Americans pay:
potential versus the region’s an overview
economic setbacks 19 COVID-19 has just
emphasized this: Latin 40 Debit and prepaid cards
10 Governmental aid, fintechs America is still the next as an essential asset for
and connectivity: the big thing when it comes to subscription businesses
key factors to increase e-commerce
Latin America’s access to 41 Cash and alternative
financial services and boost 22 An overview of the payments are still very
consumption e-commerce market in Brazil, relevant in Latin America,
Mexico, Colombia, and Chile especially in the retail
16 Smartphones and internet e-commerce vertical
penetration driving 30 The main players in
e-commerce in Latin America Latin America 43 The influence of exchange
rates on international
18 Forced digitization and the online purchases: insights
newcomers to e-commerce in on Brazil’s case
Latin America
4. 5.
Consumer Seven trends for
behavior in Latin America
Latin America 68 Take a deep dive into the
region’s main digital trends
47 Why and how Latin
Americans consume online
49 Brazil
54 Mexico
58 Colombia
62 Chile
6
01
W H Y L AT I N A M E R I C A , A N D W H Y N O W ?
CHAPTER 01
Why Latin
America,
and why Latin America’s market
now? potential versus the
region’s economic
setbacks
As the whole world, Latin America
must be read now through a particular
lens: before and after the COVID-19
pandemic (or before and during, since
the disease will only be tamed with an
effective and widely available vaccine).
Back to the beginning of this year,
2020 was supposed to be a year pulled
by emerging countries, since, according
to experts and institutions such as the
International Monetary Fund (IMF),
the United States was expected to grow
less than 2%, China would probably
slow down from 6.2% to 5.7%, and the
global economy would grow by around
3% – meaning that the world’s largest
powerhouses would not be enough to
truly move the needle. In this scenario,
Brazil (2.2%) and Colombia (3.5%) were
seen as the region’s (1.6%) main driving
forces, its way out from a lost decade.
But then the pandemic came.
7
01
01 Cumulative confirmed COVID-19 cases in Latin America
W H Y L AT I N A M E R I C A , A N D W H Y N O W ?
The number of officially confirmed cases in the region’s five largest economies
Chile
Colombia
Argentina
Mexico
Brazil
In Latin America, the coronavirus In Chile, for example, a $2 billion
officially arrived on February 26th, package of subsidies was launched
with a 61-year-old man who traveled in April to help support the country’s
from Italy to São Paulo. As the only way informal workers and generate jobs
to prevent the spread of the disease, in low-income sectors, in addition
isolation measures began to be applied to a previous $12 billion stimulus
by local administrations in March. package, worth nearly 5% of the
Amid more restrictive measures in country’s gross domestic product.
some countries and a great deal of The country also allowed Chileans to
denialism in others, Latin America withdraw up to 10% of their retirement
became the epicenter of the disease in savings. In Argentina, a single transfer
May. The extent of the human tragedy of ARS 10,000 ($135) served the
is overwhelming: with only 8.2% of the unemployed and informal workers.
world population, the region accounted In Peru, the government provided
for nearly a fourth of the cases and over a $224 grant to families in poverty
a third of the deaths, until end-October. or extreme poverty in rural areas.
The scenario of reductions in GDP, In Brazil, as soon as social distancing
employment, and consumption, as was implemented by states and cities
well as warnings about an imminent as a measure to mitigate the economic
social collapse, prompted countries effects of isolation, a crucial measure to
such as Brazil, Argentina, Peru, save time for a better preparation of the
and Chile to announce emergency public health system, there was a need
measures to mitigate the economic to help vulnerable people. Informality
impacts of the COVID-19 pandemic in the labor market exceeds 40% of
– which also included minimal the country’s employed population,
income transfer programs. according to the Brazilian Institute
of Geography and Statistics (IBGE).
01 Source: WHO, Johns Hopkins Center and local health authorities.
8
The emergency aid alongside other data from the Economic Commission
01
measures taken by the Central Bank of for Latin America and the Caribbean
W H Y L AT I N A M E R I C A , A N D W H Y N O W ?
Brazil to bring liquidity to the financial (ECLAC), a United Nations body. If in
system and amount to about 17% of the beginning experts and organizations
GDP were the upside of the country’s struggled to identify and measure the
response to the COVID-19 pandemic. economic impacts of the disease in the
The emergency aid in Brazil region, two quarters later the damage
consisted of a monthly benefit of is far more clear. It turns out that
BRL 600 to BRL 1,200 (in the case of Brazil was the least affected country
women responsible for the full support in Latin America by the pandemic
of their families) between May and during the second quarter of 2020.
September; and between October and In October, the IMF disclosed its
December, in a monthly aid of BRL 300. latest World Economic Outlook report.
Latin America effectively entered a The global lender expects the world
recession after the first quarter, with gross domestic product to shrink 4.4%
an overall 1.53% setback, according to in 2020, an upward revision compared
to the 5.2% contraction it predicted
in June, when business closures
02 COVID-19’s impact on GDP
were at their peak worldwide.
Since the pandemic arrived in Latin America later than in other
parts of the world, the region’s main markets felt the greater impact For Latin America, the forecast is
of the disease in the second quarter. (GDP growth/in %) also a little more optimistic than that
Brazil Mexico Argentina Colombia Chile Peru of June: an 8.1% drop in the region’s
GDP and a rebound in 2021 of more
than 3% growth. Previously, the IMF
-9.70%
had predicted that Latin America’s
-13.20%
-16.20%
-14.90% GDP would fall by 9.4% this year.
-17.10%
ECLAC, in its turn, says that the
region’s recovery will be slower than
-27.20% that recorded after the 2008 financial
crisis, and projects drops of -9.2%,
-9%, -10.5%, -5.60%, and -7.9% for the
economies of Brazil, Mexico, Argentina,
03 GDP growth projections for LatAm Colombia, and Chile, respectively.
The IMF expects the world gross domestic product to The IMF says that governments
shrink 4.4% in 2020. (real GDP, annual percent change) needed to stay focused on their sanitary
2019 2020 2021 responses to the coronavirus and
World
Output
Latin
America Brazil Mexico Argentina Colombia Chile Peru must not withdraw all their stimulus
& the Caribbean
measures prematurely. This is crucial
for limiting the COVID-19’s damage.
Despite challenging economic
projections for the region, the
e-commerce and payments sectors,
just after the initial hit in March
and April, moved in the opposite
direction from the crisis.
02 Source: Official Statiscs Agencies. Note: Venezuela is the third economy in the region, acoording to the
World Bank, but due to its political instability and lack of reliable data, the country is not featured in this chart. 9
03 Source: IMF, World Economic Outlook, October 2020.
01
W H Y L AT I N A M E R I C A , A N D W H Y N O W ?
Governmental aid,
fintechs and connectivity:
the key factors to increase
Latin America’s access to
financial services and boost
consumption
Amid this unprecedented crisis, money provider. An “account” is
however, the emergency measures defined as one that can be used to (1)
taken to mitigate the effects of store money and (2) electronically
COVID-19 were also the backdrop of send and receive payments.
a greater-than-expected digitization Leora Klapper, a lead economist
and financial inclusion of people in in the World Bank’s Development
the region. Economics Research Group, and the
Among statistics such as the number manager of the Global Findex database,
of checking, deposits or savings told EBANX that some countries
accounts, or even people with some already consider card-based accounts
kind of “banking relationship”, it is owners as banked people.
difficult to identify the actual number But, in general, the most traditional
of people financially included in concept of banked citizens considers
Latin America, since this depends on an account not just as a way to store
a broader concept. But what is clear or move money, but as a way to access
is that the rise of those indicators investments, credit and other financial
normally lead to financial inclusion – services, and frequently used.
as we will show you in the next pages According to the latest data by
with the cases of Brazil and Colombia. the Global Findex, published in 2018,
The Global Findex research, the about half (54.4%) of adults (people
largest study about financial inclusion over 15) in Latin America and the
in the world made by the World Bank, Caribbean have an account with
defines as “financially included” a financial institution or through
someone who has an account through a mobile money service. But this
a formal financial institution—such as scenario has probably changed
a bank, credit union, or microfinance a lot, as we will see in the recent
institution—or through a mobile experiences of Brazil and Colombia.
10Brazil
01
A large survey made by the Instituto From April, when the first installment of
W H Y L AT I N A M E R I C A , A N D W H Y N O W ?
Locomotiva in 2019 has pointed the Brazilian federal government’s emergen-
+67 million out that Brazil has about 45 million cy aid to mitigate the effects of the COVID-19
people people that don’t have a bank pandemic was deposited for unemployed,
received more than account, 21% of the country’s total self-employed professionals and individ-
BRL 238 billion in population at that year. In 2018, ual microentrepreneurs in the country, to
emergency aid by
end-October in Brazil World Bank’s Global Findex found a date, more than 100 million digital savings
– which may have led slightly larger number: 70% of the accounts have been opened by the state-
to a major process of Brazilian adults over 15 had a bank owned bank Caixa Econômica Federal.
financial inclusion of
more than 30 million account – meaning that around 48.5 Among these more than 100 million ac-
people. million at that time didn’t. counts, are the ones opened to the more
than 67 million people that received the gov-
ernment’s COVID-19 emergency aid.
“This is the biggest banking In May, after the payment of the first
two installments, Caixa’s president, Pedro
process ever occurred at a global
Guimarães, and his team estimated that
level. Within the standard from one third to 40% of the beneficiaries
concept, they are people who of the emergency aid were people who had
have started to have an account no bank account before that – that is, more
than 30 million people may have gained
and who (with the extension
access to their first account.
of the emergencial aid until For comparison, between 2014 and
December) will have moved this 2017, the Global Findex research estimates
account in the last six months.” that nearly 12 million adults opened
their first bank account specifically to
JOÃO BRAGANÇA
Senior director for the financial
receive digital transfers of government
industry at consultancy Roland Berger social subsidies, public sector wages, or
pension payments in the country.
04 Access to financial products in Brazil
From 2005 to 2020*, 87.76 million individuals gained
access to a financial product in Brazil. (in number of individuals)
175M
164M
153M 158M
143M 146M
133M 138M
127M
115M 121M
104M 109M
92M 98M
87M
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020*
04 Source: Central Bank of Brazil. * Until end-September. 11Another strong indication that more While Caixa Econômica Federal
01
people were included in the Brazilian estimates that more than 30 million
W H Y L AT I N A M E R I C A , A N D W H Y N O W ?
banking system this year than in people in Brazil may have gained
other periods, is the increase in the access to their first account, as
number of people with “active banking presented in the previous page of this
relationships” (which refers to access study, according to the Central Bank
to any type of product or service in of Brazil, from March to September
financial institutions in the country, of 2020, 9.8 million Brazilians started
not necessarily an account). some kind of relationship with a
financial institution. This figure is
more than the double of the 3.5 million
“I believe that today, thinking people that entered the banking
about the Brazilian scenario, we system this way in the same period last
have a format that is the payments year, as pointed out by the Brazilian
account. I would say that an Central Bank data. It is also the biggest
unbanked person is a person annual growth registered since 2005,
who doesn’t have an investment when this historical series started to
account or a deposits account. be released by the entity. The numbers
What we have to reflect on is: gathered by the Brazilian Central Bank
“banking” means having only a do not consider payment institutions,
place to store and deposit money or which already offer millions of basic
should we look at it from a broader payment accounts in the country
perspective, like having access to today. Only Nubank, Inter and PicPay,
other types of resources within all together, have more than 63 million
customers in Brazil. Many of them
a financial institution, such as
may also have accounts at traditional
investments, access to credit, etc?”
institutions, many may not.
HELENA LOPES CALDEIRA
CFO at the Brazilian neobank Inter
+175 million +23 million +7 million +33 million
Brazillians or 83% of the That is the number of That is the number of That is the number of
country’s total population customers with digital customers with digital customers of PicPay, one of
have some kind of active accounts at Nubank, the accounts at Inter, one the largest digital wallets in
relationship with a financial largest neobank in Latin of the largest fintech Brazil – around 15.5% of the
institution, according to end- America, according to official companies in Brazil. country’s total population.
September 2020 data from numbers from their website, It reached this number The company has added 18
the country’s Central Bank consulted in mid-December, of customers by end- million users only during the
– a much higher banking rate 2020 – around 11% of the September – around 3% of COVID-19 pandemic in Brazil,
than that of Latin America as Brazilian population. the Brazilian population. and reached this number of
a whole. customers by end-September.
12Colombia
01
W H Y L AT I N A M E R I C A , A N D W H Y N O W ?
In Colombia, the COVID-19 pandemic between December 2019 and June
also helped to accelerate the popula- 2020. In this way, 25.8 million adults
+31 million tion’s financial inclusion, driven by fulfilled this condition at the end
Colombians (or 85.9% emergency aid programs. The latest of the first semester of 2020 – the
of the country’s adult financial inclusion report of Banca growth of this indicator during the
population) have
access to a banking
de las Oportunidades, body linked first semester of 2020 was 5.6 pp,
product or service, to Colombia’s National Planning while a year ago it was 0.8 pp.
according to first Department, shows that, in the first half According to Banca de las
half of 2020 data
from Banca de las
of this year, 31 million adults already Oportunidades, emergency aid and
Oportunidades. had access to at least one deposit or VAT compensation programs of
credit financial product in the country. the National Government played a
+3.2 million This figure represents an increase fundamental role in the progress
That is the number of of 1.6 million people who entered the observed in the indicators of access
customers of Nequi, financial system for the first time – and use of financial products.
the Colombian digital
wallet owned by Ban- an increase of 3.4 percentage points Because of them, more than 730,000
colombia – 1 million (pp) when considered the data from Colombians activated their products
of them were added December 2019 (29.4 million). A year or opened one for the first time.
between the first and
the second quarters ago this increase was only 0.6 pp. That The digital inclusion promoted by
of 2020. The company means that the financial inclusion COVID-19 also leads us to think of a
already covers about target of 85% of adults set for 2022 new concept that considers digital
6.5% of the country’s
total population. was met much earlier than planned. payment accounts, which normally
In terms of use of these products, come with a debit card and a limited
A new kind of an important metric when it comes to number of operations, and are
banking, led real financial inclusion, the number provided by fintechs, as a possible
by fintechs? of adults with an active financial new and important step for financially
The increasing number product in Colombia rose from 66% included people in Latin America,
of fintechs that offer
digital accounts, along to 71.6% of the total adult population even among high informality rates.
with the rising of digi-
tal wallets, mean that a
big change is in course
in Latin America. In
05 Access to financial products in Colombia
order to consolidate From 2008 to 2020*, 14 million adults gained access to a financial
this process, however, product in Colombia. (in % of the adult population)
neobanks and fintechs
will have to offer the
85.9%
right range of services,
82.5%
with solutions built 80.1%
81.4%
to solve historical
76.3% 77.3%
issues in the region,
71.5%
73.9%
like informality, if they
67.2%
really want to keep all
64.9%
these people inside the
62%
banking system. 57.3%
55.5%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020*
05 Source: Banca de las Oportunidades/Transunión/Departamento Administrativo Nacional de Estadística (Dane). *Until end-July.
135G? No, the 4G revolution
01
“We expect that 4G will still be the
W H Y L AT I N A M E R I C A , A N D W H Y N O W ?
Alongside the fintech revolution in Latin dominant technology for many years,
America, mobile phone ownership coexisting with the growing number of
and mobile internet access are key 5G connections. By 2025, the 4G share
to increase the financial inclusion will rise to 67% of the total connections
in the region – and, therefore, the driven by the growing number of
number of digital consumers. smartphones, whose adoption will rise
Mobile phone ownership is relatively to 79% in 2025 from 69% in 2019.”
widespread in the Latin American
ALEJANDRO ADAMOWICZ
countries, although the penetration of
Director of Technology and Strategic
subscribers to mobile phone services Engagement for Latin America at GSMA
varies by country. According to GSMA
Intelligence’s report The Mobile Economy
Latin America 2019, there were 422 has finally become the main technology
million unique mobile subscribers in Latin America, according to another
across Latin America by the middle of report from GSMA, called Region in
2019, that is 68% of the region’s total Focus, Latin America, with consolidated
population. Furthermore, 81% of them data from the first-quarter of 2020.
also subscribe to mobile internet. According to Alejandro Adamowicz,
By 2025, GSMA forecasts that Director of Technology and Strategic
unique mobile subscribers penetration Engagement for Latin America at GSMA,
will reach 73% of the region’s total Latin America is one of the top regions in
population, and that 87% of them will terms of traffic growth, driven by video and
have access to mobile internet. social networking applications. “The mobile
Besides that, an important milestone networks traffic is growing at an average
to fuel this increasing connectivity 50% per year, and in some countries is
emerged in the first quarter of 2020: 4G doubling every 12 months,” he adds.
06 Mobile subscription evolution in Latin America
The historical evolution of mobile unique subscribers in Latin America from 2000-2020.
426M
378M
AVERAGE
ANNUAL
308M GROWTH*
11.1%
163M
52M
2000 2005 2010 2015 2020
*The CAGR measures the average rate that unique subscribers (i.e. human users of mobile services) grew in this region per year from 2000 to 2020.
06 Source: GSMA Intelligence. 1401
07 Mobile internet
W H Y L AT I N A M E R I C A , A N D W H Y N O W ?
Latin America World
overview in LatAm
4G finally becomes the 4G
prevalent mobile technology 34%
43% 51%
in Latin America. 53%
(in % of total connections)
3G 41%
36%
32% 25%
2G 26% 21% 22%
17%
Q1 2018 Q1 2019 Q1 2020 Q1 2020
66% 67% 68% 66%
77% 79% 81% 75%
63% 66% 70% 66%
“Smartphone technology “Across the world, people “This is one of the main
has allowed us to change increasingly do their factors for us to democratize
our consumption, work, banking through mobile financial services. Currently,
and shopping habits. And phones or the internet. the technology already allows
these innovations tend Mobile phones—including anyone with a smartphone
to be accentuated next smartphones—not only to access complex financial
year with 5G technology help previously excluded services. Just a cell phone,
when we will have an adults get financial secure internet connection and
increase in the offer of services. Research also some installed applications,
products and services suggests they can help such as PayPal’s digital
via cell phone. Our people manage economic wallet, for example, and this
expectation is that this risks and deliver a host of taxpayer has, in the palm of
will bring a new universe development benefits.” their hand, a powerful tool
of possibilities for services LEORA KLAPPER
to buy, sell, pay their bills,
and consumption that Lead economist of the World Bank’s make investments etc. It is a
will be commercialized. Development Economics Research revolution in motion - and
Group, and manager of the Global
In addition, they will Findex database one that will not stop. These
demand innovative mobile technologies are much
payment solutions and we faster to develop and have
are prepared to serve this a gigantic capillarization
market.” capacity.”
AUGUSTO LINS CARLOS NOMURA
President at Brazilian Head of Payments at
company Stone PayPal Brazil
07 Source: Region in Focus, Latin America, Q1/2020, GSMA Intelligence. 1501
W H Y L AT I N A M E R I C A , A N D W H Y N O W ?
Smartphones and internet
penetration driving e-commerce
in Latin America
As already mentioned, connectivity
is taking the region by storm, making
“The biggest contributing
room for new digital commerce factor [for e-commerce
strategies to flourish, and this is one growth in the region] has
of the main reasons why the region is
been the widespread use
such a key market for e-commerce.
According to Ricardo Sfeir, digital of smartphones.”
commerce expert at Euromonitor, SOFIA MERCER
countries with greater development Research analyst at AMI
in the region, such as Brazil and
Chile, also tend to have a high share “The smartphone is
of mobile versus desktop access,
at the center of digital
something that discloses the evolution
of the sector, and beyond that: the transformation for
greater use of apps for purchases and consumers in the region,”
activities in general. EDUARDO TUDE
Indeed GSMA’s Region in President of the Brazillian
consultancy company specialized
Focus, Latin America report, with in telecommunications, Teleco
consolidated data from the first
quarter of 2020, shows that regular
digital application engagement in Latin
America is the highest in the world
and a key driver for data traffic growth
– and therefore, for digital goods and
services consumption in general.
16“Live Streaming-driven
01
sales have become one
W H Y L AT I N A M E R I C A , A N D W H Y N O W ?
of the hottest trends in
e-commerce, reshaping “Mobile data usage in According to the company’s head
the retail industry Latin America doubled year for Latin America, Ken Huang, during
on year, reaching 4.7 GB this year AliExpress’ global ‘Summer
by developing a ‘see-
per subscriber per month Sale’ Shopping Festival, its first large-
now, buy-now’ trend in 2019. And usage is ex- scale sales event after the pandemic,
that offers consumers pected to grow more than live streaming took the festival by
instant gratification.” fivefold by 2025. This trend storm. “Customers from 213 countries
has been boosted by strong watched 1,844 live streaming sessions to
KEN HUANG
AliExpress’ head for smartphone adoption rates purchase products. Over 1,300 brands
Latin America in the region (around 70% at and 109 influencers participated in
year-end 2019),” stated the the sessions, covering 32 languages.
organization. Russia, Spain, France, Brazil, and Poland
Another key factor when were the top 5 countries that led the
it comes to the region’s potential for live streaming viewership,” Huang told
e-commerce is how passionate about EBANX.
social media and online engagement In late May, the company launched
as a whole Latin Americans are. As a platform called AliExpress Connect
consumers in the region spend more that bridges influencers and the
time online, they also consume more company’s top sellers and brands, and
online. sees in Latin America one of the main
As forecasted by the marketing markets where the initiative can most
Saas company Socialbakers, even develop itself.
before the COVID-19 pandemic, This scenario, combined with Latin
2020 was set to be the year that social Americans’ willingness for sharing
commerce would take off worldwide, their lives through social media and
reaching Latin America as well. for mobile engagement as a whole,
Alibaba’s international online urges e-commerce companies and
marketplace AliExpress, which has digital services providers to look at
Brazil as one of its top 5 markets this social commerce potential, but
in the world, is one of the pioneers also to understand its particularities
when it comes to shopping videos. and strategies that encompass local
preferences, language and payment
methods.
17Forced digitization and the newcomers
01
to e-commerce in Latin America
W H Y L AT I N A M E R I C A , A N D W H Y N O W ?
The COVID-19 pandemic put digitization 2020, more than double the amount “Consumers
to play a role at an unprecedented expected prior to COVID-19. that repelled the
pace in the region. Latin Americans By 2022, e-commerce is likely to reach idea of using an
are buying on digital channels like 63% penetration of the total population, online service
never before. And this wave of rapid compared to the 45% penetration at have no choice
digitization is likely here to stay. the beginning of 2020, winning 84 but to. And
Those who had not yet bought online million new consumers (70% more the better the
before are being highly encouraged than would have done so organically). experiences,
to do so in the current stay-at-home The reality has shown that the more open
circumstances. They are using digital business and payments digitization you are to using
tools to shop, compare prices, and pay. has left the realm of trends: stores and trying out
In Latin America as a whole, will need to think of ways to deliver different forms.”
AMI data points out that 52 million everything; banks will need to
SOFIA MERCER
new latino consumers are expected offer efficient, instant, and easy- Research analyst
to buy online for the first time in to-use access to their services. at AMI
08 Newcomers to LatAm’s e-commerce 09 E-commerce consumers
COVID-19 more than doubled the estimates about new per country
online consumers in Latin America. Consumers that have never bought online
(in millions of consumers) before are being highly encouraged to do so
in the current stay-at-home circumstances.
63% e-comm
penetration
% of the population that are % of the population that will be
e-commerce users, January 2020 e-commerce users, December 2020
52 M
55% e-comm 64% 68%
penetration 61% 60% 61%
55% 57%
49% 51%
46% 43% 43%
23 M
Brazil Mexico Colombia Argentina Chile Peru
Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22
25% 31% 29% 5% 6% 32%
Time period Forecast pre-COVID Forecast under COVID-19 2020 expected growth in the number of e-commerce consumers
EBANX TIP
In this scenario, the e-commerce industry must devise ways to
make its channels and platforms convenient and user-friendly
enough to entice the recently digitized Latin America.
08 Source: AMI.
09 Source: Visa plus local open sources, AMI analysis. 1802
L AT I N A M E R I C A’ S P O T E N T I A L F O R E - C O M M E R C E
CHAPTER 02
Latin America’s
potential for
e-commerce
COVID-19 has just emphasized this:
Latin America is still the next big
thing when it comes to e-commerce
Currently, both consultancy firms The reason for this comes
Americas Market Intelligence (AMI) from an undergoing change in
and Euromonitor place Latin America the distribution of e-commerce
as the second-fastest-growing market expenditure caused by the COVID-19
for e-commerce in the world, only crisis, not just in the region, but
behind South East Asia. worldwide. The travel vertical
AMI estimates that, in 2020, was the most hit by the crisis due
e-commerce market in Latin America to the isolation measures caused
will grow almost 8.5% over 2019, by the pandemic, pushing down
which is a number surprisingly low e-commerce sales as a whole.
when compared to the double digits Retail and digital goods were also
growth registered in the past years. affected, but reacted faster (see the
In 2019, e-commerce grew 20% over details in the next page).
the previous year, reaching $177.56
billion in TPV. The region, however, is
expected to gain a new pace in 2021.
1902
If we consider the forecasts for 10 GDP growth versus e-commerce growth
L AT I N A M E R I C A’ S P O T E N T I A L F O R E - C O M M E R C E
economic growth in Latin America in Latin America
and other regions, however, we can Despite the political uncertainties and the economic setbacks,
the e-commerce sector is growing way ahead of the region’s
infer that the region could become general economy.
“the” fastest-growing region for
GDP growth* E-commerce growth **
e-commerce, alongside SE Asia.
“[In our view] Latin America will
experience an -8.5% decline in GDP
20%
19.43%
growth in 2020, compared to -8% in
Europe, -10% in South East Asia, and
8%
-3% in Africa. As a result, we expect
3.6%
Latin America to match SE Asia in 0.8%
e-commerce growth, whereas in
the past it was trailing just behind,” -8.1%
evaluates Lindsay Lehr, associate
2019 2020 2021
managing director at AMI.
Retail Travel Digital goods
It is growing at 21% this year, and This segment experienced the and services
it will have recovered by 2021, but biggest hit, falling almost to zero An industry that has been
growing to similar rates to 2019. in April, and slowly recovering growing 20% to 30% YoY, in 2020
throughout 2020, but still is reaching 45% growth.
Key drivers for growth after ending the year with negative
COVID-19: home-office, gym, performance. AMI expects a 37% Key drivers for growth after
and home gym, toys for kids, drop in travel this year. For the COVID-19: delivery apps,
electronics to support being at consultancy firm, this segment grocery delivery, streaming,
home. will take around two years to online content, online gaming.
fully recover from the COVID-19 Other emerging categories:
impact. online education, telemedicine,
productivity services, SaaS.
Key drivers for growth after
COVID-19: local/domestic
tourism, and business trips.
But only with a vaccine will the
segment really recover.
10 Sources: *annual growth and projections by the IMF; **projections by AMI. 20Ricardo Sfeir, a digital commerce 11 Latin American international vs. domestic
02
expert at Euromonitor, emphasizes e-commerce spend
L AT I N A M E R I C A’ S P O T E N T I A L F O R E - C O M M E R C E
that the region held the second- The cross-border share of e-commerce spend suffered in 2020 due
to COVID-19, but it is likely to fully recover by 2023. (billion of USD)
highest growth in digital commerce
in the last five years, from 2014 to
Total volume
2019, and it will probably be the one International
Domestic
leading the sector’s growth in the
coming years (2020-2024).
Latin America’s first and biggest
economy, Brazil remains the
regional giant, representing 58%
of total e-commerce spend in 2019,
according to AMI. By 2023, the
market intelligence firm forecasts
that the region will surpass $300 Y-o-Y growth in total volume International e-commerce
share of the total spend
billion in e-commerce volume. Domestic International
“Delivery apps have
gotten Latin American
consumers used to a
greater array of things
online, becoming more
comfortable with the
online channel in
general. This has lifted
digital goods overall.” 12 E-commerce volume per country
Brazil and Mexico are the largest markets in Latin America,
LINDSAY LEHR but Colombia and Chile are growing at a faster pace. (billion of USD)
Payments expert and associate
managing director at AMI
Brazil
12.09% Mexico
Colombia
13.77% Chile
19.43%
8.35%
21.37%
14%
17%
25%
12%
18% 27%
32%
9% 16%
28%
25% 1% 23% 31% 25%
2018 2019 2020 2021 2022 2023
11 Source: AMI. *Projections.
12 Source: AMI. From 2020-2023: Projections. 21An overview of the
02
L AT I N A M E R I C A’ S P O T E N T I A L F O R E - C O M M E R C E
e-commerce market
in Brazil, Mexico,
Colombia, and Chile
Brazil
The Brazilian E-commerce
Association (ABComm) estimates an
18% growth for e-commerce in 2020, 45% 32% 61%
reaching BRL 106 billion in revenue It is the share that It is the share that of the Brazillian
the digital goods the retail segment adults will be online
– but as the sector gains ground with segment will have of will have of the total consumers by
newcomers pushed by the pandemic, the total e-commerce e-commerce market the end of 2020, a
this forecast is likely to be surpassed, market in Brazil by the in Brazil by the 25% growth when
end of 2020, a 42% end of 2020, a 23% compared to 2019.
according to the organization. growth over 2019. growth over 2019.
AMI, in its turn, forecasts a 10%
growth for the country’s domestic
e-commerce market, and a -11%
13 E-commerce in Brazil
drop for the cross-border market.
The largest e-commerce market in LatAm is likely
This negative growth on cross- to more than double its growth next year.
border e-commerce reflects a scenario
where international purchases Historic and projected
decreased during this year, ending market growth Volume, in billion of USD Y-o-Y growth
up with only 7% of 2020’s total share
of the e-commerce market. In 2020,
21%
19%
as travel was the most impacted
14%
sector, digital goods is likely to take
12%
the lead as the main vertical in terms
8%
of expenditure, with a projected $50
billion spend, out of $112.4 in total
2018 2019 2020* 2021* 2022* 2023*
volume (please check the “market size
by vertical” graphic, on the next page).
“Brazilians tend to be first movers, fast technology
adopters. [The country] is already a very vibrant
ecosystem for digital goods and services. We see Brazil as
a very fertile ground for digital goods; it is most likely the
most competitive market.”
LINDSAY LEHR
Payments expert and associate managing director at AMI
13 Source: AMI. *Forecast. 2202
Cross-border e-commerce vs. Domestic e-commerce
L AT I N A M E R I C A’ S P O T E N T I A L F O R E - C O M M E R C E
Volume, in billion of USD Total Cross-border Domestic
2020 Cross-border
share* Domestic
Y-o-Y growth Split by vertical
2019
2019-2020* growth
Cross-border
Domestic
Digital
goods
Retail Travel
Total
-15 -10 -5 0 5 10 15
E-commerce by device (desktop vs. mobile)
Volume, in billion of USD Total Desktop Mobile Y-o-Y growth
2019-2020* growth
Mobile
2020
share* Desktop
Total
Desktop Mobile 0 2% 4% 6% 8% 10% 12% 14% 16% 18%
Market size by vertical
Volume, in billion of USD Total Retail Travel Digital Goods Y-o-Y growth
& Services
2019-2020* growth
Retail
2020 Travel
share*
Digital Goods
Total
Retail Travel
-40% -30% -20% -10% 0 10% 20% 30% 40% 50%
Digital Goods & Services
13 Source: AMI. *Forecast. 2302
L AT I N A M E R I C A’ S P O T E N T I A L F O R E - C O M M E R C E
Mexico
The second-largest market in the with an underserved population when it
region, Mexico has been showing a comes to payments and digital adoption.
digital goods growth of 37% during
2020 and an e-commerce penetration
For Ricardo Sfeir, digital commerce
expert at Euromonitor, Mexico has
30%
It is the share that the
that grows faster than in Brazil. two major traits that define its digital digital goods segment
But according to AMI, Mexico has market: low internet penetration, but will have of the total
e-commerce market
been particularly laggard in the adoption a massive economy. “This difference
in Mexico by the end
of digital technologies. “You have the explains why the country is still far of 2020, a 37% growth
upper-middle class who looks and behind Brazil in the development of when compared to 2019.
feels like folks who live in first world e-commerce, for example. However,
countries, fast technology adopters any increase ends up causing a
63%
It is the share that the
very comfortable with e-commerce. massive boost due to its economic size, retail segment will have
Then you have a large segment of the which results in the country filling of the total e-commerce
population that still operates very much the second place in the ranking of market in Mexico by
the end of 2020, a 16%
in cash, in the informal economy, and is digital market size,” says Ricardo. growth over 2019.
much slower to adopt digital payments Digital payments, however, are still
and digital goods,” stresses Lehr. a hurdle: “The expectation is that the 60%
According to her, the landscape is country will follow the steps of Brazil in of the Mexican
adults will be online
changing, fueled by the pandemic. The terms of speed in the rise of digital, but consumers by the end
acceleration towards digitization is we know that Mexico is still way behind of 2020, a 31% growth
particularly strong in Mexico, a country in the development of digital payments.” when compared to 2019.
14 E-commerce in Mexico
The second largest e-commerce market in LatAm has been showing
an e-commerce penetration that grows faster than in Brazil.
“Mexico is an
Historic and projected market growth Volume, in billion of USD Y-o-Y growth exciting market
for the increased
32%
adoption of digital
25% goods.”
19%
18%
17% 17%
14%
LINDSAY LEHR
12%
Payments expert and associate
managing director at AMI
2015 2016 2017 2018 2019 2020* 2021* 2022* 2023*
14 Source: AMI. *Forecast. 2402
Cross-border e-commerce vs. Domestic e-commerce
L AT I N A M E R I C A’ S P O T E N T I A L F O R E - C O M M E R C E
Volume, in billion of USD Total Cross-border Domestic
2020 Cross-border
share* Domestic
Y-o-Y growth Split by vertical
2019-2020* growth 2019
Cross-
border
Domestic
Digital
goods
Retail Travel
Total
0 2% 4% 6% 8% 10% 12% 14% 16%
E-commerce by device type (desktop vs. mobile)
Volume, in billion of USD Total Desktop Mobile Y-o-Y growth
2019-2020* growth
Mobile
2020
share* Desktop
Total
Desktop Mobile 0 5% 10% 15% 20% 25%
Market size by vertical
Volume, in billion of USD Total Retail Travel Digital Goods Y-o-Y growth
& Services
2019-2020* growth
Retail
2020 Travel
share*
Digital Goods
Total
Retail Travel
-60% -40% -20% 0 20% 40% 60%
Digital Goods & Services
14 Source: AMI. *Forecast. 2502
L AT I N A M E R I C A’ S P O T E N T I A L F O R E - C O M M E R C E
Colombia
With a fast-growing pace of digital For Euromonitor, although
goods (63%), Colombia has in a local Colombia is the most delayed
player one of the major drivers for its country among the largest 18%
digitization. According to AMI, Rappi, economies in the region when it It is the share that the
the popular Colombian super app, has comes to development of digital digital goods segment
will have of the total
been boosting the digital category in commerce and connectivity e-commerce market in
the country, and beyond that: preparing rates, the country has the highest Colombia by the end
Colombians to adopt digital goods growth rates in digital commerce of 2020, a 63% growth
over the previous year
and services, as well as e-commerce, and its rapid and steady increase
in all areas of their daily lives. in the penetration of mobile 68%
“Similar to Mexico, Colombia has two devices is having an effect on the It is the share that
worlds: urbanized people who are very development of the local ecosystem. the retail segment
will have of the total
used to technology and are already avid “The country, for instance, ends
e-commerce market
adopters of digital goods, and outside up having higher rates of digital in Colombia by the
the major cities, people who are coming payments under total digital trade end of 2020, a 19%
growth over 2019.
to e-commerce for the first time,” points than Mexico,” points out Sfeir.
out Lehr. E-commerce penetration in the
55%
country is likely to reach 55% in 2020. of the Colombian
adults will be
online consumers
by the end of 2020,
a 29% growth when
15 E-commerce in Colombia compared to 2019.
The country has the highest growth rates in digital commerce.
Historic and projected market growth Volume, in billion of USD Y-o-Y growth
“Colombia is perhaps
46%
the most favorable
32%
market for digital goods
28%
21%
25%
27%
adoption in 2020.”
16%
LINDSAY LEHR
9%
Payments expert and associate
managing director at AMI
2015 2016 2017 2018 2019 2020* 2021* 2022* 2023*
15 Source: AMI. *Forecast. 2602
Cross-border e-commerce vs. Domestic e-commerce
L AT I N A M E R I C A’ S P O T E N T I A L F O R E - C O M M E R C E
Volume, in billion of USD Total Cross-border Domestic
2020 Cross-border
share* Domestic
Y-o-Y growth Split by vertical
2019-2020* growth 2019
Cross-border
Domestic
Digital
goods
Retail Travel
Total
-20% -15% -10% -5% 0 5% 10% 15% 20%
E-commerce by device type (desktop vs. mobile)
Volume, in billion of USD Total Desktop Mobile Y-o-Y growth
2019-2020* growth
Mobile
2020
share* Desktop
Total
Desktop Mobile -5 0 5% 10% 15% 20% 25%
Market size by vertical
Volume, in billion of USD Total Retail Travel Digital Goods Y-o-Y growth
& Services
2019-2020* growth
Retail
2020 Travel
share*
Digital Goods
Total
Retail Travel
-60% -40% -20% 0 20% 40% 60% 80%
Digital Goods & Services
15 Source: AMI. *Forecast. 2702
L AT I N A M E R I C A’ S P O T E N T I A L F O R E - C O M M E R C E
Chile
With the most banked population has experienced a surge in digital goods
among all the other Latin American during the pandemic and is likely to see
countries, almost everyone in Chile this segment reach a share of 26% of all 26%
has access to a debit card and a e-commerce volume. It is the share that the
bank account. According to Euromonitor, Chile digital goods segment
will have of the total
On the other hand, due to the closed leads the internet penetration rate in the e-commerce market in
payments acquiring landscape, there are region, with 86.1% of consumers online Chile by the end of 2020,
lower levels of new technology moving in 2019. On the other hand, it is the only a 53% growth over the
previous year.
into the country. “On the e-commerce country that has the highest percentage
side, we have really sophisticated and of use of desktop as an online shopping 51%
advanced online retailers and players in device: a cultural trait. Chile is also the It is the share that the
the travel industry, but less movement in only country in the region, along with retail segment will have
of the total e-commerce
digital goods because of this less flexible Brazil, to have bill payments as the
market in Chile by the end
payments infrastructure, that has held main industry within digital commerce, of 2020, a 25% growth
back the fintech revolution a little bit,” with good levels of internet banking over 2019.
points out Lehr. Even so, the country nationally.
61%
of the Chilean adults will
be online consumers
16 E-commerce in Chile by the end of 2020, a 6%
growth when compared
It has the most banked population among all the other Latin American countries.
to 2019.
Historic and projected market growth Volume, in billion of USD Y-o-Y growth
“Chile is the smallest market
38%
31%
in terms of the number of
people [...] But you have got
28% 23%
an opportunity to really
26% 25% 25%
get in the door in the early
stages and take advantage
1%
of this acceleration of digital
goods we are seeing under the
2015 2016 2017 2018 2019 2020* 2021* 2022* 2023*
pandemic.”
LINDSAY LEHR
Payments expert and associate
managing director at AMI
16 Source: AMI. *Forecast. 2802
Cross-border e-commerce vs. Domestic e-commerce
L AT I N A M E R I C A’ S P O T E N T I A L F O R E - C O M M E R C E
Volume, in billion of USD Total Cross-border Domestic
2020 Cross-border
share* Domestic
Y-o-Y growth Split by vertical
2019-2020* growth 2019
Cross-border
Domestic
Digital
goods
Total
Retail Travel
-40% -30% -20% -10 0% 10% 20%
E-commerce by device type (desktop vs. mobile)
Volume, in billion of USD Total Desktop Mobile Y-o-Y growth
2019-2020* growth
Mobile
2020
share* Desktop
Total
Desktop Mobile 2%
-6% -4% -2% 0 4% 6% 8% 10% 12% 14%
Market size by vertical
Volume, in billion of USD Total Retail Travel Digital Goods Y-o-Y growth
& Services
2019-2020* growth
Retail
2020 Travel
share*
Digital Goods
Total
Retail Travel
Digital Goods & Services -60% -40% -20% 0 20% 40% 60%
16 Source: AMI. *Forecast. 29The main players in Latin America
02
L AT I N A M E R I C A’ S P O T E N T I A L F O R E - C O M M E R C E
The AI-based market intelligence To compose the overall ranking of
platform SimilarWeb, founded in 2007 by main e-commerce players in Latin
Or Offer, measures the digital market by America (infographic 17), SimilarWeb
providing traffic intelligence to monitor first analyzed the relevance of websites
and understand data. In this ranking within the category of e-commerce in
provided for EBANX, SimilarWeb each country. Next, it added all the main
discloses the top ten e-commerce websites of each country (infographic
players in Latin America, and also 18) in a customized category in order
the ten top websites per country. to analyze them side by side.
17 Top 10 e-commerce websites in Latin America
Traffic Share Data from July 2020 Traffic Share January 2020 - July 2020
BR
AR
BR
MX
BR
BR
BR
BR
MX
CO
0 5% 10% 15% 20% 25% JAN 20 FEB 20 MAR 20 APR 20 MAY 20 JUN 20 JUL 20
Monthly Visits In millions
BR
AR
Desktop vs Mobile
BR
Desktop CO MX
MX
Mobile
BR
BR
BR
BR
MX
BR BR BR
CO
0 50M 100M 150M 200M 250M 300M
Unique Visitors In millions
BR
BR
BR MX
MX BR
BR
AR
BR
BR
BR
AR BR
MX
CO
0 10M 20M 30M 40M 50M 60M
17 Source: SimilarWeb. 30You can also read
