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When it comesto ecommerce sales growth, Latin America is home to two of the threefastest-growing countries in the world; Colombia and Argentina.

With over 620 million people, almost twice thepopulation of the United States, Latin America is one of the fastest growingE-Commerce regions of the world. Its total online sales totalized USD 85billion in 2018[1].

It’s all just starting.

The story of E-Commerce in Latin America is it’s onlystarting, far away from being saturated. There are 150 million people that alreadypurchased online at least one time, which represents a very large market by itsown. However, the number of online buyers it’s growing in an unprecedentedpath. Brazil, its largest economy, is growing by 12% year-by-year, comparedwith much more mature markets like France or U.K., with an annual growth that’snot surpassing 7%[2].

Online sales achievements are impressive. Argentina,the 3rd largest market, has been the top country with 47% growth in2018, and markets like Colombia and Perú grew over 25%.

Politics and regulations

Latin America is not even close to become an easy andstable region. On the contrary, it’s a very complex and changing environment, but full ofopportunities.

Some tips:

Politics: Every 4 to 6 years, there is a re-election. Depending if thewinning party is from the left or from the right wing, it will imply impacts onboth the economy and commerce. Be aware of it and stay informed.

Taxes and regulations: the legal framework is very complex. Also, beaware that taxes are different across the region. Rates can vary from 0% ashigh as 120%, for the same product depending on the country.

Language

Latin American consumers buying in China will not beable to understand English.

You may need to localize your checkout. Most of LatinAmerican countries speak Spanish, while Brazil, the largest one, speakPortuguese. Thus, in order to increase sales and conversion rates, you shouldaccount with a Spanish and a Portuguese version from your website, mailing andadvertising on Facebook, Instagram and Youtube.

Also, a key strategy is to have a localized customersupport. You can choose chatbots, email, phone or Facebook, but remember thatif you want to compete with local -or even US/European platforms-, customerswill expect you not only to speak their language; they will also expect you toreach out and receive replies about their purchases.

Go local

There is a huge opportunity for your E-Commerce inLatin America. But you can’t sell in Latin America the same way you do it inother regions like the US, Russia or Spain. If you want a winning strategy,then you may need to go local. Nevertheless, this doesn’t mean you need to openan expensive office in Sao Paulo or Mexico City. You should take some key  points into consideration instead:

1. Payments

The LatAm market is conservative and risk-avoiding. Atleast 7 over 10 people do not hold an international credit card: for yourE-commerce, local payments are as important as breathing:

· Local credit cards represent over 50% of the payments landscape.

· Cash payment methods, which means that people are going to a physicalplace to pay E-Commerce bills with cash, hold the 25% of the payments marketshare.

· International credit cards (including Paypal) are valid for less than30% of the population.

· Bank transfers mean 5%.

There are some good cross-border payment gateways thatwill allow your E-Commerce cover local methods and receiving funds abroad. Youcan choose local partners like dLocal, Ebanx or PayU, or work with Chinese paymentcompanies like Asiabill or Oceanpayment

2.Logistics

Logistics is the largest pain for E-Commerce retailerswilling to deliver its goods in a fast, secure and cost-efficient way to endconsumers.

At the moment of the purchase, LatAm consumers arechoosing between a Chinese platform versus a local offline store or, mostimportantly, dominant online local players (eg: Linio, Mercadolibre, B2W orFalabella).

As an E-Commerce, you will need to offer:

·Postal: Slow, unsecure, no door to door tracking.

It might be the cheapest option but it will take 25-60days for customers to receive their packages and many times they would need topick up the packages at customs. Real-time tracking will not happen.

You can choose from a wide range of postal serviceslike China Post, Hong Kong Post or Netherlands Post.

· Courier: Fast and secure, with real time tracking.

This line will assure you >95% successful deliveryrates and goods will be delivered in 5-15 days.

You can choose from global players as DHL, Fedex, andUPS, or work with cost efficient local players like Nocnoc, a unique door to door solution from China includingcustoms and last mile deliveries in Latin America.

Nocnoc was founded in 2016, Headquartered  in Uruguay, with local operations in Argentina, Brazil, Peru, Mexico and Shenzhen.  

Nocnoc is a unique Shipping Gateway connecting China with Latin America, partnering with marketplaces, online sellers and chinese brands selling to Latin America.

The company provides a door to door service solving painful custom clearance processes and last mile distributions, reducing delivery times and increasing delivery success rates in a cost efficient way.

Bringing it all together

Our advice: if you want to grow your online business,look into Latin America. The journey could be tougher than in mature marketsbut the reward will be much more attractive.

If you want to be successful, build a “Go Local” strategy.Choose properly your local expert partners that will allow you to grow to thenext step in a fast and secure way: implement local payments gateways, talk inlocal languages to your customers, use localized and multiple shipping methodsthat warranties fast deliveries, and be aware about political transformationsand taxes impacting on your customers as well as on your business.

Want to know more on how to expand your business to Latin America: 

Diego@nocnocgroup.com wechat: +89 189 3865 0161

[1] [2] DHL. 9:30AM. Charles Brewer.