Ecommerce in Latin America is still in the early stages of consumer adoption, but there's no question that it's growing. According to eMarketer's June 2018 forecast, retail ecommerce sales in the region will grow 17.9% to reach $53.20 billion this year. And though growth will slow a bit in subsequent years, sales are expected to total $82.33 billion by 2022.
eMarketer’s Matteo Ceurvels spoke with three regional ecommerce executives from eBay, OLX and PayPal about the state of ecommerce in Latin America, and how their companies found early success in the market.
These interviews were conducted as part of our August report, “Latin America Ecommerce 2018: Digital Buyer Trends for Argentina, Brazil and Mexico.” (Full report is available to eMarketer PRO subscribers only. Learn more about subscribing to PRO here.)
eMarketer: What are the main barriers hindering ecommerce growth in Latin America?
Andrea Stairs, General Manager, Canada and Latin America, eBay: From eBay’s perspective, anything that causes barriers or frictions to online global trade weakens the growth of ecommerce for the Latin American region.
Shipping, for example, can be a challenge for Latin American sellers looking to export, as they need to find the right balance between speed and cost to keep their business competitive while offering great customer service. Local postal services may offer competitive pricing at the expense of speedy delivery and tracking accuracy, while private carriers can be expensive.
Andries Oudshoorn, CEO, OLX Brasil: Logistics and reliability are a key barrier for the continued growth of ecommerce in Latin America. Many Latin Americans do not yet experience the reliable and fast delivery times that are common in more mature ecommerce markets.
Another important barrier has to do with culture, especially when it comes to used goods. Traditionally, Latin American consumers were not used to selling things they no longer needed.
Lucas Medola, CFO, LATAM, PayPal: Undoubtedly, one of the biggest limitations for Latin American consumers is security. This is still an important issue since the cost of cybercrime around the world will reach $2.1 billion. Even though ecommerce offers consumers a number of possibilities, it has also become fertile ground for online scams. They are even more commonplace especially for those consumers who are not used to surfing the web in search of offers.
eMarketer: Despite these challenges, what's driving the growth of ecommerce in Latin America?
Andrea Stairs: Cross-border trade is by far one of the most important growth drivers for ecommerce in Latin America, from both consumer and retail business perspectives. Shopping a global marketplace like eBay gives consumers access to greater inventory selection and value, which increases their purchase power.
On the flip side, retailers—particularly small and medium-sized businesses—who reach consumer markets beyond their immediate region automatically increase their chances of making a sale.
Lucas Medola: The digitization of money, rapid expansion of internet access and mobile phone adoption have created the perfect conditions to make saving, spending, giving and borrowing both easier and cheaper for consumers. This gives banks an important role in promoting ecommerce.
We also believe that digital payments are making financial services more universally accessible. This has provided an opportunity to foster financial inclusion and financial health for millions of people worldwide.
Andries Oudshoorn: Growth is primarily driven by increased access to smartphones and credit cards, especially among consumers in urban areas. When it comes to the buying and selling of used goods, increased awareness has been an additional driver since we need a more sustainable consumption model that is good for our economy, society and environment.
eMarketer: How important is mobile to your ecommerce strategy in the region?
Andries Oudshoorn: Over 75% of users access OLX on their mobile phone, particularly through the OLX Android app. It is the most convenient way for users to buy and sell since they can take product photos with their phone and publish them immediately. Our users can also communicate with one another by using the OLX chat feature.
Andrea Stairs: Mobile is a critical component of our business: More than 60% of eBay’s volume involves a mobile touchpoint—from a buyer starting a search or watching an item, to fully completing a transaction on their phone. Mobile is also changing how consumers and businesses sell. Roughly 13.7 million eBay listings are created each week via mobile devices. We continue to think “mobile first” as we design new products and experiences.