Germany-based desk research firm yStats.com’s new publication, “Latin America B2C E-Commerce and Payment Market 2020 & COVID-19’S Impact” recounts the progress made in recent months in developing online retail sales in this sprawling region, including details on the effects of the ongoing pandemic. Yücel Yelken, yStats.com founder and CEO comments that “the coronavirus outbreak has accelerated the spread of online retail in Latin America beyond the substantial year on year growth rate previously projected.”
Online retail sales advance in Latin America
The vast Latin America region has lagged other world regions such as Asia and Europe in the acceptance of business to consumer E-Commerce, with a low single-digit percentage share of total retail sales. The growth rate has accelerated in recent years, especially in the larger economies of Argentina, Brazil, and Mexico, where annual increases were in double digits before the health crisis, as shown on charts in the detailed new yStats.com report. The coronavirus pandemic has increased online shopping demand by repeat customers and drawn new consumers to the practice, further impelling the growth on online shopping and leading to projections of a healthy double-digit online share of retail sales by the end of this decade.
The region has its own leading online merchant, Mercado Libre
While global online merchants are used by some shoppers in Latin America, and several established local retailers have increased their digital sales, the region has its own leading E-Commerce business. Argentina-based Mercado Libre is among the top five most visited shopping websites in most countries of the region, and number one in several, including the three largest markets mentioned earlier plus Chile and Ecuador. During the health crisis, the number of orders placed through Mercado Libre greatly increased, doubling in a few markets, and grew by several hundred thousand in Brazil, where it was already a well-established online supplier. The products ordered through Mercadolibre.com seeing manifold increase in demand in the region at the outset of the pandemic were face masks and hand sanitizer, as reported in the yStats.com report.
Online product preferences are disrupted by the health crisis
The product categories most purchased by Latin American consumers prior to the spread of COVID-19 were fashion and electronics, though there are variations in local preferences throughout the diverse region, as shown in the charts in the yStats.com report. As in other regions of the world, the health crisis brought an increase in online purchases in the category of supermarket items and food delivery service while demand for travel and accommodation plummeted.
Alternative payment methods advance, though cards prevail
Payment patterns in Latin America are similar to other global trends: an increase in use of digital wallets and mobile payment apps. Mercado Pago, though associated with the leading regional online merchant is used outside Mercado Libre as much as within. Nevertheless, the yStats.com report indicates that credit card remains the most used payment method in the leading economies of the region.