In this edition of Cashback News, we’re taking a look at recent cashback and ecommerce developments in Latin America. Peru may be a relatively small e-commerce market but it will grow 25% in 2015 according to eMarketer. With online sales expected to reach more than $37 billion in 2015, Brazil is Latin America’s largest e-commerce market. Two of the biggest challenges in emerging markets identified by Multichannel Marketing? Bandwidth causing slow internet and the mobile-first reality can create opportunities if well-managed. PayPal says 38% of cross-border e-commerce purchases for shoppers from Latin America are from the US with China making up 26% and growing.
Learn how Amazon is figuring out the $12 billion Mexico e-commerce market despite challenges like the fact that 60% of Mexicans don’t have ATM or debit cards. Latin American e-commerce sales will be nearly $50 billion in 2015 with Argentina growing fastest at 40% over 2014. Mexican e-commerce has grown 400% in just the past five years and should grow another 150% by 2018 according to according to eConsultancy. Suddenly Mexico is hot for e-commerce once again and the entire Latin American region is getting another look from VCs and multinational retailers.
Peru’s Consumers and Advertisers Slowly Coming to Digital Life
A new eMarketer report, “Digital Ad Spending Benchmarks in Peru: A Conservative Market Slowly Coming to Digital Life,” projects expenditures on web ads will rise 25.0% to reach $81.8 million in 2015. By comparison, digital ad spending in Latin America as a whole will total $6.82 billion during the same period, with the largest regional market, Brazil, contributing 49.9% of that total. The modest amount of digital ad spending in Peru will stay that way for some time, but it will nearly double between 2015 and 2019, reaching $153.2 million by the end of the forecast period.
Unsurprisingly, Peru is the smallest of the six Latin American markets that eMarketer estimates digital ad spending for (the others are Argentina, Brazil, Chile, Colombia and Mexico), both in absolute terms and relative to the rest of its overall media ad spending. Smaller than Chile which boasts a population less than half of Peru’s. Via emarketer.com
Time to put your best e-commerce foot forward for some Samba magic
This year, 36.1 million of Brazil’s 200 million population will purchase products online. Whilst this is a low percentage by European standards, it still means that it has more online shoppers than Benelux and Nordics combined. Famous for its world class footballers and six foot tall supermodels, Brazil can also boast its place as the largest e-commerce market in Latin America, and it’s anticipated it will be quite some time before it relinquishes the top spot.
The country represents more than half of the market for the continent with total sales expected to reach 37 billion USD in 2015. This makes Brazil amongst the largest e-commerce markets in the world, with eMarketer ranking it as the No. 10 worldwide. Brazil is not only the biggest market in Latin America for macroeconomic reasons such as population and economy, but also because it has one of the most mature e-commerce markets in the region. Via fourthsource.com
Survival Tips for Launching Localized Sites in Mobile-First Emerging Markets
Emerging markets, however, is where bandwidth speeds plummet. Take South America. The market’s middle class is growing, but the region sports some of the slowest internet connections in the world. Companies must be mindful of these limitations when entering this market.
Argentina has the slowest in the region, with an average of 1.8 Mbps. Attractive online markets such as Brazil and Colombia feature better—though still below-average—speeds of 2.5 Mbps. Understanding this dramatic bandwidth difference is critical, should you want your company’s international mobile presence to succeed. If a market’s bandwidth is slower than what’s needed to effectively present your localized digital experience, your new customers won’t transact there. Via multichannelmerchant.com
LatAm international e-commerce turning more to China
Latin American consumers are increasingly turning their attention to China compared to the US for e-commerce purchases given the strong dollar, while the emergence of e-commerce giant Alibaba has helped boost consumer confidence in buying from the Asian country, Renato Pelissaro (pictured), marketing director for PayPal Latin America told BNamericas.
The reasons given by consumers in a recent study carried out for PayPal by IPSOS showed that price was a clear driver of Latin American consumers’ increasing preference for Chinese products as well as the broad variety of products and special offers such as free shipping offered by some. Via bnamericas.com
Here’s How Amazon is Figuring Out Mexico’s Tricky Market
Amazon AMZN -0.32% , which launched in Mexico in June 2015, is one of several global companies that is paying close attention to Mexico’s rapidly growing e-commerce market. Sitting in a conference room in a tall office tower with a view of Polanco and the sprawl of Mexico City, Juan Carlos Garcia, the 47-year-old CEO of Amazon Mexico, explains, “We saw a big opportunity in the Mexican market. It’s a market which right now is at $12 billion and growth has been in the double digits.”
Mexico benefits from a number of unique demographic and geographic characteristics that make it one of the most promising e-commerce markets in Latin America. The nation’s proximity to the U.S. makes it an easy target for retailers north of the border looking to boost their international customer base. At the same time, the rapidly expanding group of young, working-age Mexicans is quickly becoming a target market for global retain chains….
But Mexico, despite its sizable upside, is a market laden with quirks and challenges. Six out of 10 Mexicans don’t have ATM or debit cards. While Amazon has made great efforts to allow customers to use the widest variety of debit cards, other companies are going even further to target the wide segment of Mexico’s publication that does not use the formal banking system. Wal-Mart offers cash on delivery, and InBev gives customers the option of paying with a cash transfer from a local convenience store chain. Via fortune.com
Retail Ecommerce Sales Near $50 Billion in Latin America
Retail ecommerce sales in Latin America are growing at a rapid pace, eMarketer estimates. Based on our latest figures for total and digital retail around the world, ecommerce sales in the region will reach nearly $50 billion this year, an increase of 23.9%.
Nearly $20 billion in sales will come from Brazil alone, where ecommerce also makes up a greater share of the total retail market than elsewhere in the region (a still-tiny 2.8%). Mexico is in a distant second, with $5.70 billion in retail ecommerce sales this year, or 1.5% of all retail sales in the country. Growth is fastest in Argentina, where ecommerce sales will be up 40.0% this year to nearly $5 billion. Via emarketer.com
Five reasons e-retailers are looking to expand into Mexico
Due to lack of infrastructure brands have historically been hesitant about entering the Mexican ecommerce market. However this is changing and, as the internet retail landscape in Mexico booms, there has never been a better time for online businesses to expand into the region.
Major US retail players such as Wal-Mart, Lowe’s and Home Depot have all recently invested in Mexican websites and many more brands are set to follow suit. In fact ecommerce in Mexico has grown a staggering 400% over the last five years, with online shopping sales predicted to increase a further 150% by 2018 when compared to 2013. But what exactly has changed? Why is Mexico now considered as a viable and lucrative opportunity for online retailers when previously it had been overlooked? Via econsultancy.com
We hope you enjoyed this look at the e-commerce market in Latin America. We’ve got much more cashback, e-commerce, retail, mobile and VC news you can use every weekday, so subscribe today. It’s free!