Digital Commerce in Latin America

December 2019

Latin America, fourth biggest market in terms of digital commerce, showed timid growth during the 2013-2018 forecast period. With weakened currency compared to the US dollar and going through one of the toughest economic crisis in the last decades, the region posted below global average results. With a diverse landscape in terms of connectivity and still mid-tier globally, the region is expected to accelerate results with higher investments in connectivity and overall economic rebound.

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Key Findings

Latin America lags behind in terms of connectivity and digital commerce

Latin America has enjoyed considerable improvement in connectivity levels but, lack of investment in infrastructure within poorer and rural areas hinders the region’s growth potential. Coupled with economic crisis, Latin America saw timid results in terms of digital commerce and although maintaining its global position, shows no projections within the short term to surpass more developed counterparts.

Connectivity and omnicanality push for greater integration of online and offline channels

Retailers are heavily investing in omnicanality as digitalisation and connectivity increases in the region. Consumers now interact with brands within different channels and expect further consistency between the different outlets. Brick-and-mortar locales are investing in offline experience improvement, where agile digital shopping and payment are key drivers.

Mobile first in connection, Latin Americans grow fonder of mobile commerce as technology democratises in the region

Latin American consumers, enjoying higher tech smartphone penetration coupled with increasing mobile internet speeds, are increasingly shopping for products and services through their devices. Higher expectation for seamless checkout and retailer investment in digital wallets that integrate both sellers and shopper ecosystem will push for higher rates of remote and proximity payments. The high appeal of smartphones within the region allied to the growth of e-commerce, social network use and streaming service results in consumers expecting to have a digital experience regardless of their location.

Latin America will become be the second fastest growing region through to 2023

Forecasts show that Latin American digital commerce will post a CAGR of more than 15% over 2018-2023, behind only the MENA region. Although Latin America will maintain its position in terms of Digital Commerce Index ranking, the next five years will be paramount for the region to reach closer to third-place holder, Western Europe, and gain larger global recognition.

Introduction

Scope
Key findings

Regional Overview

Putting Latin America in context
Mobile innovation and internet penetration boost digital commerce
Brazil continues to dominate Latin American digital commerce
Latin America remains last in global digital connectivity
Retailing, bill payments and transport lead remote purchases
Mobile sees dynamic growth, challenging dominance of PCs
Digitalisation encourages promising digital commerce results
Retailing expected to play a greater role in proximity payments
Wearables negligible compared to mobile proximity payments
Low penetration for proximity payments expected to continue

Country Snapshots

Brazil: market context
Brazil: digital commerce landscape
Chile: market context
Chile: digital commerce landscape
Colombia: market context
Colombia: digital commerce landscape
Mexico: market context
Mexico: digital commerce landscape

Forecast Projections

Impressive growth expected for Latin America
Remote will continue to push digital commerce growth
Latin America continues to lag behind in connectivity
Retailing and bill payments will continue to dominate remote
Growth in remote mobile purchases challenges PC purchases
Popularity of remote payments will bring innovation and adaptation
Retailing proximity payments grow in Latin America
Wearables proximity payments remain minor compared to mobile
Retailing and consumer foodservice will top proximity payments
Brazil is the only Latin American country among voice leaders
Brazil and Mexico will post strong growth in voice purchasing
Voice commerce will expand beyond retail in Latin America
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