As we have seen in previous blog articles, many Latin American countries became part of the fastest growing countries in the world when it comes to eCommerce. Millions of people in Latam shopped online for the first time during the pandemic and that trend continues in 2022, making Latam one of the regions with the biggest growth potential. In fact, eCommerce sales in Latin America are expected to maintain a yearly growth rate of 30% until 2025, making the region’s eCommerce sector a hypergrowth market, and causing international companies to move their focus from already-saturated eCommerce markets to Latin America. For example, even though Brazilians are among the most connected people in the world, a lot of them had never shopped online before Covid-19. And, this is of course not the only trend. It is more than ever necessary for online merchants to understand the local specificities and trends as the local potential is growing and the eCommerce consumption behavior is evolving. Latin America is a unique market, and we will list a few of these local specificities in this article.
● The biggest and most used marketplace in the region isn’t Amazon but Mercado Libre, with almost four times more monthly visitors than their American rival.
● Latin America has historically been a region with a high unbanked population and, even if that trend is changing, online merchants should not forget that people over 65 and people living in rural areas remain largely unbanked. In addition, there is a wide disparity between countries in Latam as not all of them reach a banked population of almost 90% such as in Brazil. This part of the culture is important to take into account while optimizing the eCommerce checkout funnel.
● Local payment methods and installment plans through credit cards or vouchers are extremely popular in Latin America due to the economic history we have just discussed. Online merchants should consider having local payment methods in order to increase the likelihood that consumers will buy from their company. On top of the possibility to pay by installments, online merchants should consider BNPL (Buy Now Pay Later) options, Mercado Pago and Boleto in Brazil, Rapipago in Argentina or RedCompra in Chile, among others.
● Social commerce in Latam is a big deal and shouldn’t be looked away by online merchants expanding into the region. In fact, the share of active social media users went above 75% in many Latin American countries, with Facebook and YouTube being the most used platforms for social commerce. Latin America’s first social commerce marketplace, Elenas, is a good example of the rapid acceleration of the social commerce trend in the region.
● Mercado Shops offer the option to synchronize inventory with Facebook Shopping and Instagram Shopping, which facilitates reaching audiences on social media and leveraging social commerce. Social media platforms cannot be underestimated in the product and brand Go-To-Market strategy as online merchants can sell their products and advertise through these social media channels.
● The eCommerce through smartphone trend in Latam is also getting traction and is becoming a key element in the new post-COVID-19 eCommerce world. For example, almost 60% of Brazilians only access the web through their phones, as Brazil's connected population relies mostly on smartphones to access the Internet and as PC penetration remains low within financially vulnerable citizens. As this trend is visible in the whole Latam, online merchants should take mobile seriously in their eCommerce and Marketing strategy.
The companies that will succeed in Latam will be the ones which understand the local culture and behavior, as an international approach is unlikely to work. If you want to be successful in the region, you need to have a partner like Softline Ecommerce with local expertise that will help you draw a local Sales and Marketing strategy in order to reach out to potential customers effectively, as well as optimize your customer journey and checkout conversion. On top of this, Softline Ecommerce will help you localize your sales funnel and your interface, will process payments in local currencies, will provide you with the most relevant local payment methods, will assist you with a multilingual customer service support, will make sure you comply with local regulations, will deal with your invoices and taxes and will minimize fraud with an AI-powered tool. As Latam is experiencing an increase in digital literacy, improvements in internet accessibility and a decreasing unbanked population, Softline Ecommerce can help you expand into the region. Softline Ecommerce’s Global Payment Solution for Digital Sales makes cross-border digital sales easy and safe, so that you can reach new customers and grow your business easily in Latin America.
If you want to see what we can do together, don’t hesitate to contact us on our website, via Linkedin or email (firstname.lastname@example.org).