By Nicole Saville | Junior Consultant

We’re increasingly talking to clients about Latin American ecommerce markets, and thought it was worth sharing some more details on why we think it’s a region that international brands should be keeping an eye on.

The Latin American ecommerce opportunity stems not only from the number of consumers, but also the high demand for international goods and the rapid growth rate predicted for the foreseeable future. Though the region is at the beginning of its ecommerce journey, Latin America is already home to 140 million online buyers across 20 countries, with this figure set to rise to 155 million by 2019.

In fact, Latin America is experiencing the biggest rise in ecommerce of any region. With a forecast growth rate of 19%, compared to 14% for Europe, total ecommerce sales are expected to reach $118 US billion by 2021.

Here’s some more detail on the markets and difficulties that have put off others in the past.

Current stakeholders

Online marketplace Mercado Libre is currently dominating the ecommerce market in Latin America, with 50 million unique users per month in 2016, almost three times more than its competitors in this region. Operating in 18 markets across Latin America, Mercado Libre has mastered the idiosyncrasies of running an ecommerce business in what can be a challenging environment.

Latin American Ecommerce Opportunities infographic

One international player hoping to cash in on this market is Amazon, which is looking to lease a 50,000 sq ft warehouse in Sao Paulo, Brazil. Amazon already operates in Brazil but is currently relying on third party distributers to ship its products.

The opening of this warehouse would allow Amazon to take control of last-mile delivery; an aspect of its proposition that it has used to differentiate itself and quickly build its customer base in other markets.

Nonetheless, Amazon faces further challenges than just distribution if it hopes to compete with Mercado Libre’s success.

Barriers to market entry

With so much potential profit in Latin America, why haven’t more online retailers already entered the region? Unfortunately, there are a number of logistical barriers retailers must overcome.

Firstly, the infrastructure across the majority of Latin America is extremely poor, trailing far behind that of the US. Mexico has just invested $300 billion to improve its current infrastructure and the first DHL depot has recently opened in Chile, suggesting accessibility to these markets is increasing.

A further problem is the length of delivery time, which can largely be attributed to the poor infrastructure. Standard delivery time ranges from 6 to 9 days across the region, compared to an average of 3 to 5 days in the UK.  Some retailers try to target this by fulfilling orders from store stock but encouraging the use of click and collect may also become an increasingly favourable option.

Perhaps the biggest issue is the lack of trust. It’s estimated that 49% of the Latin American population do not own a bank account, but even those that do have major concerns over giving out their payment card and personal details online, as well as being worried about the safety of their packages during transit.

Retailers must be able to address these concerns by providing customers with their preferred payment types and using a trusted logistic supplier. In Argentina, for example, 44% of online buyers prefer to use cash-based methods - such as cash on delivery or pre-paid cash - to pay for their online purchases.

Key Latin American ecommerce markets

The markets showing the greatest potential in Latin America are Brazil, Mexico and Argentina, due to their stabilising economies and expanding young and middle-class populations. These countries also show a high demand for international goods – more than half of digital buyers purchased from a foreign site in 2016.

Throughout these three countries, less than 50% of the population are currently buying online, leaving enormous scope for the rapid growth that has been forecast. With so few international brands already in place, now is the time to investigate Latin American ecommerce markets to stay ahead of the competition that will surely follow as they further mature.

Digital buyers Latam.jpg

Practicology is currently working with several international brands in the region, for more information on how we can assess international markets and support your launch plans please get in touch at

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