Although Latin American countries are still largely cash economies, it is one of the fastest growing regions for ecommerce after Asia Pacific.
Ecommerce is growing in the region due to an increasing number of buyers using credit cards, internet penetration and growing smartphone usage. Across Latin America, the number of digital buyers is expected to rise from 121 million in 2016 to an estimated 151 million by 2019. Despite this being relatively small in comparison with North America and Asia Pacific, there is considerable room for growth in ecommerce sales.
Some brands will be reluctant to trade in Brazil and Argentina due to high taxes on imports increasing the overall costs to consumers, and greater security in regards to online payment protection is still needed in order to entice some to spend online, however this is unlikely to deter fashion and brand-savvy consumers. Brands which are more adaptable to online retailing will expand with continued credit card, internet and smartphone penetration and improvements made to shipping and logistics networks.
While Brazil has been the clear leader in ecommerce sales, accounting for over a third of digital buyers, online retailing is picking up the pace in second-tier digital markets such as Chile, Peru and Colombia with the number of digital users in these three countries expected to increase to 45.3 million by 2019. Payment provider allpago estimates ecommerce in Colombia alone will reach $2.53 billion (€2.27 billion) by 2018.
The share of online retail sales leaves room for growth in the coming years. When the markets of Argentina and Brazil begin to recover, ecommerce will be one of the first sectors to take off and investors will be ready and waiting.
Greater internet saturation, increasing number of smartphone users and a growing middle class with money to spend will see ecommerce thrive in Latin America. All consumers like more choice and speedy delivery, so Latin American consumers are no exception to the ecommerce boom.