Latin American Markets Offer Huge Potential For e-Retailers


Despite the economic problems currently being faced by LATAM, e-retailers based outside of the region are not slowing down in their attempts to penetrate the market, with the US leading the way.

Indeed, given the problems that can face companies trying to sell within the region, some observers believe it’s a sign of the huge potential that is available for e-retailers, and their determination to exploit the growth to the highest level.

Latin America has a number of issues that don’t make life easy for external e-Commerce companies. Worries such as poor road conditions, red tape delays, fluctuating currency rates, high import taxes and bouts of political unrest, make it a harder than normal environment to penetrate.

Yet, as we have reported before at allpago, the top 41 US retailers which have e-Commerce platforms targeted at Latin America, have grown digital sales by over 18% in 2014 to $2.4 billion.

The simple reason why US companies are such big e-Commerce players, say observers, and Europe to a lesser extent, is that the LATAM population has an appetite for brands not generally available within their countries. This is especially true in the rural areas, which still have little access to the brands that they covet.

But, it’s interesting to note that its US companies selling cheaper-ticket items that are achieving the most growth. This comes down to home-based competition (especially in Brazil) and import taxes which can add 60% to orders worth more than $50. This means that companies offering higher value computer goods are not experiencing the same levels of growth.

Many external e-Commerce companies are working hard to localise their operations and offer the full range of payment options (which includes cash on delivery, a common practice in Peru for example). Companies are also working closely working with local delivery operations, to ensure that their goods arrive safely.

With the number of online buyers expected to double throughout the region by the end of the decade, it’s perhaps no surprise that e-retailers are so determined to penetrate the market.

About allpago

allpago international is the leading payment provider for the LATAM region. allpago provides the most relevant local payment methods through one API and one single platform. Allpago offers the best conversion rates ensuring state-of-the-art technology and legal advice necessary for a successful e-Commerce operation in Latin America.

allpago enables start-ups to Fortune 500 companies to offer the necessary local payment methods in the Latin American market, which account for around 80% of their revenues. Current clients include, Getty Images, Intel Security McAfee, Norton Symantec, Paylogic, Sumup, Teamviewer and many other leading payment and digital companies.

Reference: Internet Retailer