Dive Brief:
- Argentina is the fastest-growing e-commerce market in Latin America, expanding at an annual rate of 28%, according to a new report from BI Intelligence.
- Sluggish order fulfillment is an obstacle for marketers in Argentina, where delivery times average one week for online orders.
- E-commerce throughout Latin America will total $6.8 billion this year, the report said, with food and beverage sales expected to contribute substantially to growth.
Dive Insight:
Latin America is a huge and largely untapped growth market for e-commerce, said BI Intelligence, and there's no better example than Argentina, where online retail sales are expected to grow at an annualized rate of 28% through 2019 to total $12.4 billion.
Top categories driving growth in Argentina include electronics (13%), food and beverage (7%), and appliances (5%). Food and beverage sales are strong throughout Latin America, with consumers more willing to buy groceries online.
Brazil’s e-commerce marketplace is still the biggest in Latin America, accounting for 42% of the region’s activity, but it’s also maturing the fastest, BI Intelligence stated. The report forecasts Mexico’s share of the market to expand to 15.6% by 2019, translating to $11 billion of the region’s $85 billion in online sales. Argentina’s market share will rise to 14.6%.
Emerging markets like Brazil are catching up to developed countries like the United States, Japan and Australia in terms of Internet use and smartphone ownership, according to a Pew Research Center study published last month. Consumers in emerging markets using the Internet or owning a smartphone went from a median of 45% in 2013 to 54% in 2015.
Companies need to build out their e-commerce capabilities in Latin America now to be able to win new customers as these economies continue to grow. American retailers are getting ahead of the trend—Wal-Mart is building e-commerce fulfillment centers in Brazil, while Amazon has launched a Spanish-language site in Mexico.
