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2019 in Review: eCommerce Trends in Latin America

December 12, 2019 5 min read
"The next 15 years is consumption party time," according to John Price, the co-founder of Americas Market Intelligence. That's certainly no understatement, with South America being a continent to keep a close watch on for eCommerce business.
Unlimint team
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Unlimint team
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The region is characterised by an already active market of digital and tech-savvy consumers, and an unbanked population that is steadily being introduced to the online world.

This year, eCommerce revenue from sales constituted $61.5 billion so far and is projected to reach $94 billion by 2022. Some of the most exciting regions for this kind of growth include Brazil and Mexico, which have undergone some incredible developments over this year alone.

So, as we come to the conclusion of 2019, let’s take a look at the eCommerce trends of Brazil and Mexico, and show just what kind of potential these markets have in store in 2020.

Most popular eCommerce platforms include:

  • Mercado Livre: 331 million MAUs
  • Americanas.com: 119.5 million MAUs
  • Amazon Brazil: 51.5 million MAUs
  • Magazine Luiza: 49.3 million MAUs
  • Casas Bahia: 37.1 million MAUs

With more than 211 million people, Brazil is one of the most ‘plugged in’ communities in the region. With an internet penetration rate of 70%, its eCommerce and smartphone markets are steadily emerging as powerful areas for its economy.

Already, eCommerce in Brazil has a value of $23.8bn, with mobile commerce comprising $7.6bn of that. Already, Brazil dominates the world of eCommerce in Latin America, and that is only going to grow.

The big challenges for eCommerce businesses are the kind of import taxes that are currently in operation in the country, as well as offering an intuitive user experience throughout the platform.

For the former, this applies to both digital retailers and customers taking advantage of it. Retailers, in particular, are subject to high tax rates of 6.4% on international payments.

Meanwhile, consumers looking to capitalize on deals online are required to pay a 60% flat tax on imports for purchases ranging from $50-500.

If we take into consideration the fact that the average consumer spends online is $122, according to Export.gov, that’s enough to make Brazilians think twice about buying from international business.

Booming Brazil: eCommerce Opportunities

Even though the average spend of consumers is lower than other emerging markets, internet penetration, along with the rounding off of eCommerce growth to a still impressive 10% annually, means that businesses should consider looking into Brazil.

While internet penetration in the country is impressive, there’s still a lot to come out of smartphone usage, which hovers around 37-40% or 80+ million people.

By 2023, the number of smartphone and mobile users is expected to reach well over 100 million, with a lot more of its users seeing the advantages of click and collect and one-click payment solutions.

Some of the big industries in terms of segments of eCommerce include the following:

Consumer Electronics (42.1% of market share) & Travel (29.2%)

Some of the most popular eCommerce platforms include:

  • Liverpool: 9.8 million MAUs
  • Walmart Mexico: 15.7 million MAUs
  • Coppel: 17.6 million MAUs
  • Amazon Mexico: 41.3 million MAUs
  • Mercado Libre Mexico: 108.5 million MAUs

Top eCommerce merchant segments:

Consumer Electronics (31.6%), Travel (30.2%) and Household Goods (15.2%)

While Brazil leads the way on B2C eCommerce, Mexico is a strong second; making up 18% of the total market in Latin America. As a market in its own right, eCommerce carries a value of $22.6bn with plenty of potential to grow over 2020.

Mexico also has one of the larger populations of unbanked relative to the entire population, 63% of its 130 million people, in fact. But there are plenty of attributes that set it apart as a very attractive potential market.

The potential exactly? Smartphone users. While Mexico has roughly 60% internet penetration, there are 75m people that have and use smartphones on a regular basis, including for shopping online.

As far as it stands as a market so far, more than $7.7bn in eCommerce transactions have taken place thanks to these same users, and it’s a figure that’s only going to get bigger over the coming years.

The world of eCommerce is growing at a spectacular pace, and one of the regions to keep a close watch on is Latin America!

But even with this impressive penetration rate of mobile users, eCommerce businesses aren’t without their share of challenges.

There’s still a distinct lack of financial inclusion within Mexico, but businesses from a wide variety of industries have worked to remove that barrier.

Through offering payment methods like Cash to digital payment solutions in collaboration with major convenience stores like OXXO, retailers are working to bridge the gap between the online market and the unbanked population.

Logistics still represent a clear challenge for retailers looking to expand into the online world. On average, innovations in the field of digital payments are hamstrung by an average delivery time of 10-15 days.

While this is an area that has seen improvement over the last year, companies that can sharpen up in this area can really set themselves apart from the big eCommerce businesses already operating in Mexico.

Making it in Mexico: eCommerce Opportunities

eCommerce businesses that overcome these obstacles can reap the benefits of a rapidly emerging consumer-base. Over the next five years, the number of internet and mobile users will increase exponentially.

By 2023, for example, there will be 101 million people in Mexico with regular access to the internet, and considering the number of MAUs already on eCommerce markets there now, there is an unbridled potential there.

Out of those already on the internet, 85% of them shop online already, so any increase to the total number spells out a clear and massive market.

When it comes to smartphone users, meanwhile, by 2024, it’s forecasted that the number of smartphone users will rise to 92 million as a conservative estimate.

Fintech’s are already looking at this growing population with considerable interest, especially as they seek to get the unbanked banking with them.


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