E-Commerce & Social Media – The Next Big Thing:                              Latin AmericaMay, 2011                       ...
May, 2011                                      Latin America E-Commerce opportunity            Latin America online buying...
May, 2011                                                 Latin America E-Commerce opportunity       Brazil e-commerce  op...
May, 2011                                             Latin America E-Commerce opportunity     E-COMMERCE SPENDING IN LATI...
May, 2011                                         Latin America E-Commerce opportunity            BRAZIL E-COMMERCE LANSCA...
May, 2011                                              Latin America E-Commerce opportunity                               ...
May, 2011                                            Latin America E-Commerce opportunity   Argentina e-commerce revenue j...
May, 2011                                     Latin America E-Commerce opportunity     ARGENTINA E-COMMERCE LANSCAPE      ...
May, 2011                                              Latin America E-Commerce opportunity   MEXICO, AMONG THE MOST ATTRA...
May, 2011                                        Latin America E-Commerce opportunity            MEXICO E-COMMERCE LANSCAP...
May, 2011                                                        Latin America E-Commerce opportunityWorldwide e-commerce ...
May, 2011                                           Latin America E-Commerce opportunity           Top 14 Cities of Latin ...
May, 2011                                                                  Latin America E-Commerce opportunity    Latin A...
May, 2011                                                     Latin America E-Commerce opportunity    Latin America - E-co...
May, 2011                                           Latin America E-Commerce opportunity        Latin Americans do shop on...
May, 2011                                                   Latin America E-Commerce opportunity     With the increase of ...
Upcoming SlideShare
Loading in...5

Latin America e-commerce


Published on

Published in: Technology, Business
No Downloads
Total Views
On Slideshare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Latin America e-commerce

  1. 1. E-Commerce & Social Media – The Next Big Thing: Latin AmericaMay, 2011 Ivonne KinserA 600 MM people marketwith the fastest Internetgrowth-rate worldwideLatin America 600 Million people region hasthe fastest-growing Internet penetrationworldwide.In the past year the Internet population in LatinAmerica has increased 15 percent to 112.7million visitors as the region’s digital ecosystemcontinued to grow and develop. Latin America is the second Reasons to expand into largest user of social latin america media worldwideConsumers are 5 times more likely to buy on a No one could denysite written in their own language. at this point that we have arrived atAccording to researches consumers are 5 times an unprecedentedmore likely to buy on a site written in their own stage wherelanguage. In spite of the predominance of globalization isEnglish in terms of languages online web users making the worldstill prefer to use their own language when “one large market”. Companies worldwidesurfing the web. A Latin American consumer is are recognizing the need to “globalize" theirtherefore more likely to buy from a platform business models in order to grow.offering Spanish or Portuguese versions than one Within the global marketplace, Latinoffering English only. America is in the crosshairs of many global companies. Below are five reasons that make the region a no-brainer for companiesCan’t read, won’t buy. Why considering new markets to expand their language matters in businesses. global websites Source: http://www.portadaonline.com/article.aspx?aid=7954Consumers are 5 times more likely to buy on asite written in their own language.Source: http://goo.gl/OLDnE Ivonne.kinser@gmail.com
  2. 2. May, 2011 Latin America E-Commerce opportunity Latin America online buying population per country The results of this research conducted in 2007 shows the unleashed potential of the Latin America e- commerce market. Although Latin America lags behind most developed countries regarding the adoption of online shopping habits, at some point it catches up. With the current staggering penetration of Internet and mobile technologies in the region, the e-commerce shopping has already increased significantly. Ivonne.kinser@gmail.com 2
  3. 3. May, 2011 Latin America E-Commerce opportunity Brazil e-commerce opportunity, bigger than the UKThe most populous country in Latin America, Brazilis also the country with the largest number of peoplewith Internet access – 76 million peoplerepresenting 38% of Latin American web users areBrazilian. With almost 60% of web users using socialnetworks, Brazil surpasses the US and the UK insheer volume.Source: http://goo.gl/KxGcV Brazil E-commerce Speeds Up ExpansionOnline retail sales are expected to grow 19.4% per year in the 2010-2013 period, jumping fromUS$ 572 billion to more than US$ 1 trillion.In Brazil sales went up 40% in 2010 year-on-year, to US$. 9.25 billion. Of the new globalconsumers, the Brazilians are specially impacted by the digital media and have been particularlyprone to try and use them. And the positive economic scenario leverages this behavior.Online retail sales have been growing worldwide, and studies forecast this year they may rise toUS$ 680.6 billion, more than doubling from the US$ 273.05 billion five years ago.In this same period, in the US, the number of online shoppers have gone up from 130 million in2006 to around 176 million this year, indicating the consumer base has been growing slower, butaverage sales have been going up. Total online sales have gone up from US$ 126 billion in 2006 toUS$ 204 billions. And all this process may be boosted once again, as the use of the web forshopping becomes more usual, due to the mobility. Especially in Brazil, where in many residencesthere are only mobile phones and no fixed lines, stimulating a more intense browsing in themobile environment.In the Brazilian reality, the number of e-consumers reached 23 million in 2010, from 17.6 millionone year earlier. This growth was leveraged by the new e-commerce concepts, specially in SocialShopping and Purchase Clubs, and by the growing presence of the mid-class consumers, who rosefrom 36% of the market in 2006 to 53% last year.The expansion of e-commerce, online or via mobile, will be in the next years the fastest-growingsales channel, and the e-consumers shopping experience stimulates the growth of businesses,average sales and frequency of shopping. The e-commerce figures in Brazil and worldwide will bethe biggest factor to make retailers and industries devote growing attention to this channel,creating a new universe of experiences and relationships, in a digital environment.Source: Brazilian Retail News. May, 2011 Ivonne.kinser@gmail.com 3
  4. 4. May, 2011 Latin America E-Commerce opportunity E-COMMERCE SPENDING IN LATIN SET TO ALMOST DOUBLE IN THE NEXY FIVE YEARSinternetretailer.com Brazilian E-commerce Spending Set to Jump 187% by 2016E-commerce sales in Brazil will reach$22.0 billion in 2016, up 178% from$7.9 billion in 2010, according to a newstudy from Forrester Research Inc.The report notes that the country’s 81million web users are active in socialnetworks and expect free shipping offersand interest-free payment plans for theironline retail purchases. Knowledge and Expertise are Key to Succeed Forrester cautions that selling online in Latin America is different in several ways from e-commerce in the United States, Europe and Asia. Import taxes, for example, are steep, especially in Brazil. Online retailers hoping to target the online consumer in Brazil need to understand that installment payments are extremely common, both online and offline: Visa estimates that some half of all credit card purchases in the country are done through a series of installments. Additionally, Boleto Bancario, a local bank transfer service, is a popular online payment option for those consumers who do not own credit cards—a significant portion of the population. In conclusion, to build a successful in international e-commerce business technology is just halfof the equation. The other half is a solid market experience and local cultureunderstanding. Ivonne.kinser@gmail.com 4
  5. 5. May, 2011 Latin America E-Commerce opportunity BRAZIL E-COMMERCE LANSCAPE • 71% of Brazil e-shoppers are employed/Professionals • From 20 to 45 years old • 56% are female • Only 15% shopped in international websites in 2007, likely because of the lack of solutions to pay with debit card, (back then), and the in- language website Ivonne.kinser@gmail.com 5
  6. 6. May, 2011 Latin America E-Commerce opportunity Chile • Among the most prosperous countries in Latin America • Leads electronic commerce transactions • Triples the average euro per capita • 40.6 % Internet penetration • Highest penetration of credit cards in latin America • Ranks 39th out of 139 economies estimated in E-commerce in Chile has been terms of technological readiness growing 100% year-over-yearToday, Chile is one of the most stable and prosperouscountries in South America, and seems to be the leadingcountry of Latin America when it comes to electroniccommerce transactions. Chile triples the regional average of31,22 euro per capita, with sales equal to 107,85 euro a yearper person. Brazil is a good second, with 36,89 euro percapita.Internetworldstats.com confirms that since the millenniumchange the Internet use has grown, up to 320,2%. Chile had an initial amount of1.757.400 (or 26,2 %) users in 2001 and reached 7.387.000 (44,9 %) users in 2008. Inconclusion, 40,6% of Chileans used the Internet).As for the e-commerce development, today Chile seems to be the most developed LatinAmerica country. This does not only concern IT, but for online business industry as wellsince Chile has the highest penetration of credit cards, personal computers and Internetaccess. For 2010/11 Chile ranked 39th out of 139 economies estimated in terms oftechnological readiness, still well ahead of it’s nearest regional competitor, Brazil, whichoccupied the 46th position.E-commerce in this country has been growing 100% year-over-year as retail businessesaround the world are expected to draw their attention towards the Chilean market.http://goo.gl/RGVTM Ivonne.kinser@gmail.com 6
  7. 7. May, 2011 Latin America E-Commerce opportunity Argentina e-commerce revenue jumps 48% in 2010 E-commerce revenues in Argentinahave increased by over 48 percent in2010 to USD 1.9 billion, according to areport by the Argentinean E-commerceChamber (CACE). The growth was mainlydue to the increasing Internet customerbase, which reached 26.5 million users atend-2010. The study also shows thataround 32 percent of Argentinas Internetuser-base make online purchases. Thereport forecasts that Argentinas e-commerce sector revenues will grow bynearly 43 percent this year to USD 2.7 billion. Source: http://goo.gl/inRIJ LEADING THE GROWTH Argentina, along with Venezuela were the markets which achieved the strongest Internet retailing growth in 2010, reaching almost 40 percent in current terms. Argentina was also the fastest growing market historically, posting over a 57 percent CAGR between 2005 and 2010. Rapid growth of Internet usage is one of the reasons behind the sustained growth in Argentina, another reason being that consumers are using the Internet toshop for better prices. The current economic situation is helping as “people are turningto shopping online because it is a rational buy which avoids temptation.The most successful Internet sites are those of store-based retailers, which alreadybenefit from consumer confidence. Pure e-commerce companies are few and farbetween, have not yet found a successful way to reach consumers and depend mainlyon word of mouth. Retailers need to look at how they can use social media, which isincreasing their number of users significantly in Argentina.Source: http://goo.gl/RJ0YA Ivonne.kinser@gmail.com
  8. 8. May, 2011 Latin America E-Commerce opportunity ARGENTINA E-COMMERCE LANSCAPE • 73% of Argentinean e-shoppers are employed/ Professionals • 33% are within the 25 to 34 years old bracket • 64% are female • 27% shopped in international websites in 2007, vs. 79% in national websites Ivonne.kinser@gmail.com
  9. 9. May, 2011 Latin America E-Commerce opportunity MEXICO, AMONG THE MOST ATTRACTIVE E- COMMERCE MARKETS IN LATAM Mexico Poised for Significant Growth Mexico is the fastest growing and second largest technology market in Latin America next to Brazil. In the last eight years, Internet access in Mexico has grown 774% with only a quarter of the population, (approximately 110 million) currently using the Internet. Internet commerce is expected to grow steadily as more Mexicans convert to online shopping and as online bank services and large online retailers increase their ecommerce offerings. The potential for healthy growth makes Mexico one of the most attractive ecommerce markets in the world right now. Concurrently, the demand for cross border products by the Mexican consumer has also experienced substantial growth. As an emerging market, Mexico offers opportunities for global-minded e-tailers to meet this demand for U.S. products. In 2009, more than half of the largest online retailers in the U.S. accepted international orders – a sales channel that was virtually non-existent 3 years ago. With the arrival of alternative payment methods replacing credit cards and advancing logistics solutions, more and more merchants have warmed up to cross border customers and are looking towards international markets to increase their sales. Mexico is one of those markets and is ready for business. • Online sales in Mexico will reach $3.4 billion in 2016, up 209% from $1.1 billion in 2010. • About a third of the Mexican population, or about 40 million consumers, are online. Ivonne.kinser@gmail.com
  10. 10. May, 2011 Latin America E-Commerce opportunity MEXICO E-COMMERCE LANSCAPE • 69% of Mexican e-shoppers are employeed/ Professionals • 40% are within the 25 to 34 years old bracket • 81% are female • 44% shopped in international websites in 2007, (much higher than Brazilians) Ivonne.kinser@gmail.com
  11. 11. May, 2011 Latin America E-Commerce opportunityWorldwide e-commerce spending – forecasted growth Brazil By 2014, global e-commerce spending is projected to increase more than 90 percent. In Latin America, the amount spent online is projected to more than double.• Brazil is — and will remain — the powerhouse in the region. With more than 40% of the online users in the region and a steadily growing economy, it’s not surprising that Brazil’s eCommerce market will outpace all others by a wide margin. Brazil’s projected 2011 sales of almost $10B put it behind other major online retail markets like France and South Korea but ahead of smaller ones such as the Netherlands and Italy.• Mexico’s online retail market is small today — but growing by a CAGR of almost 20%.With less than half of the online users of Brazil and limited online spending, Mexico’s online retail market remains a small fraction of the size of Brazil’s. Average online spending per buyer will not increase significantly over the next five years, but the sheer number of online buyers will. Technology purchases will be major drivers in both countries. While some eCommerce markets have seen notable categories emerge as online leaders — e.g., grocery in the UK, clothing in France — in newer online markets, it’s often technology purchases that dominate online. In both Brazil and Mexico, for example, online purchases of consumer electronics and computer hardware will be the two categories propelling these markets forward. Ivonne.kinser@gmail.com
  12. 12. May, 2011 Latin America E-Commerce opportunity Top 14 Cities of Latin america: All of them will climb in World GDP 2025 Latam Current 2010 GDP GDP per City (Country) GDP Rank Population World World Capita Rank (by city) Rank 1 Sao Paulo 20.800.000 8 6 $18.654 (Brazil) Mexico City 2 22.800.000 9 7 $17.105 (Mexico) Buenos Aires 3 14.800.000 12 10 $24.459 (Argentina) Rio de Janeiro 4 12.500.000 30 24 $16.080 (Brazil) 5 Santiago (Chile) 6.050.000 51 50 $19.835 6 Brasilia (Brazil) 3.925.000 55 51 $28.025 7 Lima (Peru) 9.200.000 56 52 $11.848 Belo Horizonte 8 5.700.000 61 89 $10.702 (Brazil) Monterrey 9 4.350.000 63 58 $23.448 (Mexico) 10 Bogota (Colombia) 8.850.000 64 61 $11.299 Porto Alegre 11 (Brazil) 4.100.000 66 85 $16.098 Guadalajara 12 (Mexico) 4.700.000 81 74 $17.234 Medellin 13 (Colombia) 3.625.000 104 103 $13.793 14 Curitiba (Brazil) 3.300.000 113 112 $13.333 Buenos Aires will overtake Boston (12th) and Washington DC (11th) by 2025 GDP Ivonne.kinser@gmail.com
  13. 13. May, 2011 Latin America E-Commerce opportunity Latin America - E-commerce by country 2.0% 1.3% 1.3% Internet retailing in Latin 2.7% Brasil 2.9% America almost tripled in Mexico size over the last five years 4.0% Chile to generate sales of almost 4.0% Venezuela 4.2% Argentina US$12 billion in 2010. Caribe sin PR However, the channel is 4.7% Centro Am. still almost three times 60.8% Puerto Rico 12.1% smaller than direct sales. Colombia There is still enormous Peru Other room for growth. Source: :AmericaEconomia Intelligence` E-commerce in LatAm 34.5 1.20% 1.00% E-commerce as a % of GDP 27.6 E-commerce in 0.80% US$ Billions 21.8 the region has 0.60% increased as a 15.6 percentage of 10.6 0.40% 7.5 GDP at an 4.9 0.20% 1.9 3 average rate of 0.00% 34% per year. 2003 2004 2005 2006 2007 2008 2009 2010* 2011* Sales E-commerce as a % of GDP Ivonne.kinser@gmail.com
  14. 14. May, 2011 Latin America E-Commerce opportunity Latin America - E-commerce categories Taxes; 2% The retail C2C; 6% category is Internation growing the al Retail; most in the 13% Travel; Travel entire region. 45% Retail Retail; 34% International Retail C2C Taxes Source: :AmericaEconomia Intelligence Retail Sites Growth Source: comScore +9% 69.6% +3% 63.8% 63.9% 61.8% Brazil Worldwide 2009 Reach 2010 Reach Ivonne.kinser@gmail.com
  15. 15. May, 2011 Latin America E-Commerce opportunity Latin Americans do shop onlineE-commerce does offer considerable hope to consumers and businesses who now pay ahigh price for multi-layered distribution channels for their products. Why does softwarefrom the U.S. cost 150% more in Guadalajara than in Toronto, when both were shippedthe same distance from Silicon Valley free of import duties? The answer lies withMexico’s many IT distribution middlemen. The product is imported by a handful ofmassive importer/wholesalers whose buying power is fierce and who have the capital tofinance stock for distributors all over Mexico. The local distributor may sale to anotherre-seller before the product touches de end-user. Each re-seller marks up the product20-to-50%. By buying the products online consumers significantly reduce their cost ofthe product. E-Commerce Site Visitors in Brazil Most Likely to Make Purchase Among those who visited e-commerce sites in Latin America, 79 percent of males reported making an online purchase, while 88 percent of females reported doing so. Across the markets included in the survey, Brazil showed the highest percentage conversion of Ivonne.kinser@gmail.com
  16. 16. May, 2011 Latin America E-Commerce opportunity With the increase of mobile penetration, mobile e- commerce will emerge as a strong shopping channel Mobile Phone User Penetration by Country, 2009-2015 90% 80% 70%Latin America has seen asignificant recent rise in the number 60%of people using the web, driven by 50%investment in infrastructure andbroadband technologies. There are 40%an estimated 204,689,836 Internet 2009 2010 2011 2012 2013 2014 2015users in Latin America, Argentina Brazil Mexico Latin Americarepresenting 34.5% of thepopulation and growing.However, no other region has seen Mobile Phone Users in Latina greater increase in the America 2009-2015proliferation of mobile devices thanLatin America. According toeMarketer, Latin America has some 68.6% 70.7% 72.9% 63.4% 66.2%of the highest adoption rates of 60.6% 57.3%mobile devices in the world andoverall mobile phone user 415.6 432.7 450.7 375.5 396.2penetration of 55.4%. A study by 331.5 354.6Hunt Mobile Ads shows that therehas been a 156% growth in mobiletraffic in Latin America whencomparing the first quarter of 2011 2009 2010 2011 2012 2013 2014 2015to the same period in 2010. Mobile Phone UsersSource: guardian.com.uk Ivonne.kinser@gmail.com