Home to over half a billion people across twenty countries, the region of Latin America may be below other emerging regions in terms of ecommerce, but online sales are heading in an upward direction. Among the region’s population, there are 267.4 million online shoppers, which is set to grow by 31% over the next 4 years.
The Latin leaders are Brazil, which represents 32.5% of the ecommerce market, and Mexico, which represents 28.8%, while other countries including Colombia, Peru, and Argentina have witnessed sharp growth lately.
And the biggest company to cater to this emerging market is MercadoLibre. Founded in Argentina in 1999, the online marketplace is now worth $60 billion, and was the first Latin American tech company to be listed on the NASDAQ.
With the pandemic driving growth towards ecommerce, MercadoLibre is set on a different strategy to boost further sales: cross-border commerce. And it’s planning to spend $500 million on its logistical network such as shipping and warehousing. The online marketplace primarily sells items within the same country. Moving across borders is an opportunity to take advantage of the upward momentum and capture greater revenues.
International trade as it currently stands accounts for just 10% with Mexico, Colombia, and Chile composing the countries where it is highest.
Latin America loves money. Or rather, cash. The cash-based societies mean that many citizens still live without a bank account or credit card. And so MercadoLibre launched Mercado Pago, the region’s answer to PayPal. As a gateway for people to pay digitally, it’s worked as a second driver for growth.
Given the lower rate of ecommerce penetration in Latin America, the presence of ecommerce platforms is equally few and far between. Yet with growth traveling in an upward direction, the potential is huge. Already, a handful of Latin American companies have realized both the power of Salesforce Commerce Cloud and have the budget to implement it.
These include Brazilian chocolate manufacturer Cacau Show. The Sao Paolo-based company was set up by then 17-year-old Alexandre Costa, dubbed the Bill Gates of Chocolate, and is now worth half a billion dollars.
Then there is Farmacias Cruz Verde, a drug distribution and pharmacy service based in Santiago, Chile, and one of the largest in the country.
Towards further ecommerce development in the region, and the opening of cross-border commerce, we are likely to also see the growth of ecommerce platforms — with the best looking at Salesforce Commerce Cloud to boost their brand as well as sales.
PS: UV is one of the world’s leading Salesforce B2C Commerce Cloud (Demandware) development teams. Contact us to see how we can work together.