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Aaron Rodriguez explains how eCommerce and digital payments in Latin America are evolving

Latin America is a region that continues to develop over time, and Aaron Rodriguez, using consistent data, explains how eCommerce and digital payments have been an important part of that transformation. 

San José, Costa Rica – WEBWIRE

Americas Market Intelligence (AMI), publishes a new edition each year of its eCommerce Data Library. This library measures the evolution and impact of eCommerce in the region. This analysis covers all aspects of cross-border commerce and payment methods. It also includes shopping devices.Based on this data and his experience in the region, Aaron Rodriguez explains how Latin America continues to advance on the path of digital payments and eCommerce.

The pandemic accelerated the adoption of digital shopping, which was sustained in 2021, and will continue to thrive in the coming years. Rodriguez projects compound annual growth (CAGR) equivalent to 25% through 2025. “Many retailers around the region are even reporting over 100% growth in eCommerce sales. These rates are quite aggressive in our experience,” assures Rodriguez.

It is not possible to talk about the success of eCommerce without grounding it in the local context of each country, Rodriguez explains. Because of this, the expert has defined a new methodology that makes it possible to calculate per capita eCommerce consumption in each market. “This new approach correlates with two important data: penetration of digitalization and online banking, and GDP per capita,” says the expert.

The data suggests high penetration in digitization and banking in Chile and Brazil, where annual per capita eCommerce spending is $975 and $920, respectively. Panama and Costa Rica show a surprising potential that has not been seen so far. Finally, in markets such as Mexico and Colombia, annual per capita eCommerce consumption remains close to the regional average.

In addition, Rodriguez’s new methodology calculates the share of eCommerce purchases as a percentage of total private consumption. In other words, what percentage of total monthly or annual spending per person has been allocated to online purchases. In Brazil, the share of eCommerce consumption versus total spending (per person) is 17%, the highest in Latin America.

The specialist evaluates the eCommerce market in different verticals in order to cover the broad regional umbrella. “eCommerce is dynamic and evolving all the time. We recently decided to independently measure sales in home delivery and transportation apps against digital goods in general, after observing unique and substantial growth. We have an ’other services’ vertical that covers sales for commissions, taxes, licensing, education, and others. If we see growth in a particular subcategory that warrants a new separation, we will certainly do it,” Rodriguez explains.

Travel & Tourism is, according to Rodriguez’s transactional data, the fastest-growing eCommerce vertical in Latin America. In 2021, travel and tourism had eCommerce sales of $37 billion, and this figure is expected to triple by 2025, with an average annual growth of 30%. However, the expert projects that retail sales will continue to account for almost half of eCommerce sales in the region.

It is worth noting that, according to Rodriguez’s assessments, the casino and gambling sector, as well as the video games sector, are emerging as two prominent verticals within the eCommerce digital goods purchasing segment. “When we talk about eCommerce penetration over total retail sales in Latin America, countries like Colombia and Chile stand out, with 19% penetration. Brazil and Mexico - which are perceived as the most mature markets in the region in terms of sales volume - have an eCommerce penetration of 17% and 11%, respectively,” says Rodriguez.

For him, there are still opportunities for small and medium-sized companies looking to sell online. Currently, the bulk of eCommerce sales is concentrated in a few players. In Mexico, for example, 66% of online retail sales are attributed to just five players, including Amazon, Mercado Libre, and Walmart. Something similar occurs in Brazil, where retailers such as Magalu and Americanas (along with three other players) account for 51% of online sales.

About Aaron Rodriguez

Aaron Rodriguez is an expert eCommerce consultant in Latin America. He helps businesses throughout the region optimize all of their eCommerce operations to increase sales and retain customers, and also has extensive experience in the development of strategic and external alliances to promote departmental and organizational objectives. He has traveled extensively throughout Latin America to assist a number of companies and, when he’s not traveling, he dedicates all of his available time to his wife and children.

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 Aaron Rodriguez

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