THE REALITY OF ECOMMERCE IN LATIN AMERICA

The Ecommerce potential  in Latin America is a reality. Complex and with particularities, but a reality. Spanish companies mainly have a very important presence in Latam. All you need to do is go to any mall in Colombia, Mexico or Peru to notice it: Spanish companies rule Latin America on the offline retail.

Some of those which lived the beginning of the biggest e commerce players in Spain such as BuyVip, Vipventa, Privalia amongst others, cannot help but remembering the similarities between the current ecommerce sittuation in Latin America, and the birth of the largest players in Spanish Ecommerce. Personally I am not a fan of the term "emerging markets", specially in economies where some economic indicators are very close to those so called "developed". If we look at the potential, young population, infrastrutures in development, the hunger for technology, and middle class ( apart from some exceptions), growing, we realize that there is much more growth potential than in Europe.

Latin America represents opportunity, despite the negative indicators coming from Brazil influenced by the difficult political situation, there are many reasons to be positive, government changes in Argentina, ( with a 72% ecommerce growth in 2015), or the indicators in Mexico, (with a 30% growth last tear), Colombia, Peru, or Chile, (where numbers have trippled in the past three years), with similar growth to developed countries, but with far more superior growth margins.

 Conditions for ecommerce could not be better, however we will always need to do some work adapting to each country, not just when it comes to payment methods, but also cultural and structural aspects, which need to be reflected at our digital strategy. To treat them all the same would be a bad mistake.

The boom of payment options

When it comes to payments, my main field, which I have been working with in the past 12 years, as an example of well seasoned companies we have Pagseguro, from the UOL group as the leader in Brazil, Mercado Pago (the payments arm of the marketplace MercadoLibre), or Payu (former Dinero Mail from the Naspers group), which were the very first in Latin America in the online payments arena.

In the last years many companies have been born, such as Safetypay (founded by former American Express execs), offering online banking and bank deposit payments, Banwire in Mexico (offering Oxxo, 7eleven, cards, and Spei (local online banking system), Todito CASH, Payvalidda in Colombia, Peru and Ecuador, Pagoefectivo in Peru ( part of grupo el comercio), Pagadito in Central America or Servipag in Chile, with many other coming up constantly.

As we can see, there are many options that allow us to monetize our products and/or services in the region, where banking penetration is low, and additional payment options are not an extra but a must if we want to truly see the potential of our offering. Believing that with international credit cards and PayPal we are ready to enter this countries is wrong, depending on the country and vertical, we are looking at 50% to 70% of potential customers missing.

There are of course other matters to take into account, such as infrastructures, qualified professionals or investment that need to be taken into account, but payment options are no longer a problem. The growth of Spanish Ecommerce, and the inevitable expansion into these territories of established companies has to be directly linked to the development of Ecommerce in Latin America.

The potential and the conditions are there without a doubt.