by Vicki Matranga, Design Programs Coordinator
Digital businesses are investing in Latin America’s rapidly evolving B2C retailing, according to the September 2014 issue of Internet Retailer, published by Chicago-based Vertical Web Media, LLC. The magazine maps internet retail’s growth in Latin America and describes how web merchants spend heavily and think creatively to overcome obstacles in Brazil’s e-commerce market.
Internet Retailer profiles the top e-commerce markets in Latin America and spotlights the region’s largest economy. Brazilian e-retailers claimed 65.2% of Latin America’s web sales in 2013. A compound annual growth rate of 20.09% is expected to more than double sales from US $15 billion in 2013 to US $31.2 billion in 2017. Similarly, the number of online shoppers is projected to expand 13% annually from 30.9 million in 2013 to reach 50.3 million in 2017.
The article presents information and forecasts from sources such as Latin American web marketplace operator MercadoLibre, Inc., which began its online shopping portal in 1999, Forrester Research, Euromonitor and the World Bank. A strong middle class with steady household incomes, increased spending online and growing internet access attracts merchants to invest in e-commerce now. They see the next two to three years as their prime opportunity to build market share, especially among the growing number of consumers with smartphones and access to the mobile web. The online shopper in Brazil is becoming more mass market, with middle-and lower-income consumers now shifting their spending online and online sales expanding outside of the major cities.
Brazil’s online merchants of all sizes face significant challenges in logistics and communication. The national highway system is poorly developed and there are no large private carriers such as FedEx or UPS to manage deliveries nationwide. Internet connectivity can be spotty and slow and many of Brazil’s rural areas don’t have web access.
B2W Digital, Latin America’s largest online retailer, in aiming to build its own infrastructure so that it will eventually be able to offer overnight nationwide delivery, acquired developers of e-commerce systems and search applications as well as a logistics and fulfillment company. Some web merchants establish their own delivery systems; companies offering fulfillment services are emerging. Brazil is Amazon’s fastest-growing foreign market; by learning how consumers shop online, Amazon is crafting its growth strategy. By year end, Walmart.com.br will have grown from 10,000 SKUs in 2008 to more than 2 million SKUs, its inventory propelled by a marketplace opened on the website in 2013 that allows outside merchants to sell their goods. Walmart is also expanding its fulfillment center network around the country.
As strong brands stake their territories, the e-commerce landscape in Brazil will soon look very different than it does today. Read the full article about how Brazil is shaping online market dynamics in Latin America http://www.internetretailer.com/2014/09/02/ramping
IBC members have access to several Key Retailer and Distributor Reports focusing on Brazilian and other Latin American companies as well as a presentation delivered at the 2014 Global Forum by Brazilian retailer Etna and a presentation delivered at the 2013 Global Forum by Brazilian distributor Dellar. This information is available in the IBC Members Only section at: http://www.housewares.org/Secure/Login.aspx?ReturnUrl=%2fibc%2fmembers%2f