May 2, 2016
It’s been a big news year for eCommerce in Latin America: Brazil’s economic instability has tempered eCommerce growth, elections in Argentina have raised hopes that favorable regulatory changes are ahead, and Amazon’s entry into Mexico has shone the spotlight on the region’s fastest growing market. According to Forrester’s recently published forecast, online retail sales in Brazil, Argentina, and Mexico (the region’s three largest markets) will reach $30.9 billion by 2020, up from $20.8 billion in 2015. Some key findings from this research include:
- Brazil remains the region’s dominant eCommerce market. Brazil’s online retail sales today are more than double those for Mexico and Argentina combined. Despite economic (and political) woes, online sales are growing, and the market shows signs of maturity: Online shoppers in Brazil span social classes and buy across categories – with categories like apparel and footwear gaining a larger share of the overall online retail sales pie.
- Macroeconomic conditions in Argentina have presented obstacles to eCommerce growth. Tight import restrictions enacted in 2012 made importing products extremely expensive and kept foreign investment in the market at bay. The newly elected government appears to be working towards loosening up these restrictions, though little has changed so far. Local traditional retailers are driving eCommerce growth and increasingly adding omnichannel capabilities for consumers. For example, traditional retailer Falabella offers customers visibility into store inventory, and flexible fulfillment options like multiple pick up sites or buy online pick up in store.
- Online retail sales and buyers in Mexico will double in the next five years. Though a significantly smaller market than the other markets in this research, Mexico’s online retail market shows longer-term potential. With a growing middle class and increasing smartphone penetration, Mexico is gaining attention from global online retailers, but early stage online shoppers mean that retailers will have to assuage consumer wariness of issues like the security of their personal information and shipping and returns policies.
Clearly, the eCommerce markets in Argentina, Brazil and Mexico differ greatly in terms of size, maturity, and growth potential. I’d love to hear your thoughts and predictions about eCommerce in Latin America in the next five years in the comments below. For more analysis and the details around market sizing for the next five years, Forrester clients can access the report here and can connect with me via Inquiry.