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eCommerce growth has been imminent, according to eMarketer, only in 2015 it generated sales of USD$1.670 trillion worldwide. They estimate that by 2019 sector sales will grow an average of 21% year over year globally, reaching USD$3.578 trillion.
Online retail growth in Latin America
The potential for eCommerce growth in Latin America is higher than Europe and North America. According to eMarketer, Latin America grew by 23% in 2015 , ahead of the 14% growth in the United States and 13% in Europe.
One of the main drivers of this growth has been the increase in the penetration of mobile devices. More than 55% of the population of Latin America has access to the Internet, and 33% is permanently connected through Smartphones. According to eMarketer, the number of mobile phone users in Latin America grew 17.6% in 2015, the highest figure globally. The total number of mobile users in the region exceeded the 396 million, compared to 258 million in the United States. 45% of them use a Smartphone with Internet connection.
eCommerce sales in the region will grow 20% by the end of 2017. Brazil, Mexico and Argentina are among the top 20 countries generating the largest online sales worldwide.
Although in 2015 Brazil had the lowest growth of these, with 15% vs 2014, it managed to position itself in the first place of the region with $ 19.49 billion dollars’ sales. It is expected that by 2019 this figure will rise to USD $ 29.65 billion.
Mexico is in second place in Latin America, generating 5.70 billion dollars sales during 2015 and representing a growth of 30% vs. 2014. The sales forecast for 2019 is USD $13.27 billion.
Argentina was the country with the highest growth rate in the region in 2015 – 40% -, however, in terms of sales, it reached $ 4.96 billion dollars, occupying the third place in the continent.
The rest of the Latin American countries together generated $10.83 billion sales during 2015, and the estimated sales for 2019 is USD $24.44 billion, projecting an average year over year growth of 22.6%.
Cross-border eCommerce: the next step for eCommerce in Latin America
Linio has tripled its sales in the region in the last 3 years and plans to continue growing above 30% annually during the following years. 40% of Linio’s sales come from Mexico and the largest growth is in Chile and Argentina.
During the last year, Linio.com has increased its product portfolio by almost 500%, reaching more than 3 million products in the region. This growth is due to the opening of its platform to sellers from all over the world, especially from Asia, the United States and Europe. In just one year, Linio went from having 2,000 sellers to more than 10,000. Also, about 40% of Linio’s orders are international.
Adaptation, the key to eCommerce in Latin America
The key to Linio’s growth has been to adapt eCommerce to the Latin American market and consumer. Although the credit card penetration rate is still low in the region, in the last 4 years Linio has shown that its customers rely more on this payment method to make their purchases. In 2012, 16% of customers paid using a credit card and in 2016 this figure grew to almost 50% of the purchases done in the region.
Linio has sought to break the existing barriers to reach Latin consumers as the market is different from existing world models. In order to adapt to its customers, the incomparable offer of payment methods has been a fundamental part “we were pioneers throughout Latin America in implementing the most secure payment method available: cash on delivery. An example of our customers’ trust is that once they start with this payment, they gradually migrate to other online methods, proving that they rely on buying with Linio“ comments Andreas Mjelde, CEO of Linio.