emarket Services makes it easier to use e-markets for international business e-business Issue EMARKETPLACES, A GOOD STRATEGY FOR SELLING ONLINE IN LATIN AMERICA By Inés Ramírez Nicolás emarket Services Spain www.emarketservices.es September 2015 Latin America is one of the continents with the fastest growth rate in online sales. Companies but above all consumers have started doing their shopping online, and in many cases they have opted for the security of the major emarketplaces to do so. This article provides some examples of the most important platforms recommended for anyone wishing to successfully access this vast market.
Summary Summary... 2 Latin America, a flourishing market for ecommerce... 3 Outlook and trends by country... 4 Brazil... 4 Argentina... 5 Mexico... 6 Other countries... 6 The importance of emarketplaces... 7 MercadoLibre, the benchmark for B2C... 8 Other B2C multiproduct platforms... 8 B2B emarketplaces in the region... 10 Specialised emarketplaces... 11 Challenges for ecommerce in Latin America... 12 Tips for a successful strategy... 13 The future of ecommerce in Latin America... 14. September 2015 Page 2 of 1 4 www.emarketservices.es
Latin America, a flourishing market for ecommerce Whereas in Europe and North America the rate of growth for ecommerce is gradually slowing down as the market approaches maturity, in Latin America the figures show no signs of abating. While 2014 saw sales of 57.7 billion dollars in B2C ecommerce, in 2015 they are expected to exceed 90 billion dollars, according to data from emarketer, up almost 56%. A report by Ecommerce Europe reveals that in 2013, 69.9 million consumers bought goods and services online in Latin America. On average they spent 629 dollars, almost half the global average of 1,304 dollars. As in the case of other emerging markets one example is China, the primary driver of ecommerce is the growth of the middle classes, who are keen to access a wider variety of better quality products. The World Bank estimates that over 50 million people moved into this social class between 2000 and 2010, of whom 35 million are from Brazil. With these data, 30% of the population of Latin America regard themselves as belonging to this socio-economic group. Another factor is the rapid rise in Internet use in the region. Internet World Stats calculates a figure of over 322 million Internet users in Latin America and the Caribbean, with a rate of penetration of 52.4%, ahead of even Asia. The chairman of the Latin American Institute of ecommerce (einstitute) and Latin American VP of VTEX, Marcos Pueyrredón, claims that Latin America offers numerous opportunities. After 15 years of positive evolution in the ecommerce industry and the Digital Economy in the region, today we see major steps forward in the maturity of the support services, and above all in consumers' online habits. According to Pueyrredón, ecommerce in many countries in the region is no longer based solely on prices, variety, convenience and valuations, but also on all the some things consumers look for in any offline purchase: the right product through an unbeatable shopping experience, and that's the great challenge facing any online retailer looking to break into the Latin American market, says the chairman of the einstitute. The social networks are of great importance in this region. The report by Ecommerce Europe indicates that 72% of Internet users access social media. This is why including them in the marketing strategy is an option worth considering in order to reach all those users. How to approach this market? Marcos Pueyrredón says that although today it is possible to establish a global strategy for access in Latin America it is advisable to start with a pilot program in one country, as the problems of payment channels, operations and logistics are specific to each market. The main markets in order of volume and maturity and the offering and support services for ecommerce in Latin America are Brazil, Mexico, Argentina, Colombia, Chile and Peru, but it should be borne in mind that the complexity and size of Brazil and Mexico make it inadvisable to begin operations in those countries. It is more advisable to replicate the strategies of companies like Netshoes.com, which began in Argentina before going on to venture into Mexico, said the chairman of the einstitute. September 2015 Page 3 of 1 4 www.emarketservices.es
Outlook and trends by country Brazil Brazil is the most developed country in terms of ecommerce in the region, and in 2014 had a population of 202 million people, 62% of whom were aged under 30. This makes it a promising market in which to sell online. According to the report by Forrester Research Latin America ecommerce Forecast, 2014 to 2019 sales for B2C ecommerce in Brazil will increase from 17.8 billion dollars in 2014 to 40.8 in 2019, although the rate of growth will slow down from 2016. The number of shoppers will rise from 33.5 million to 61.8 million in the same period. The chairman of the Brazilian ecommerce Association (ABCOMM), Mauricio Salvador, says that there are 62 million online shoppers in Brazil, as one out of three Brazilians has already used ecommerce. This figure is set to increase in coming years because the penetration has room to grow, and in fact in 2015, four million people will make their first online purchase, says Salvador. With an average year-on-year growth rate of 30%, the chairman of ABCOMM points out that this sector is recruiting, rallying and investing in spite of the overall economic scenario in the country. With regard to the most demanded products, the report by ystats.com entitled B2C ecommerce in Latin America 2014 indicates that Brazilian consumers are starting to acquire categories like clothing, accessories and electrical appliances. Mauricio adds health and beauty, electronics, computers and furniture. Women represent 55% of online purchasers, so if you have a product that targets the female audience, the ecommerce channel in Brazil is an excellent sales route, says the chairman of ABCOMM. Cross-border purchases include predominantly hardware and consumer electronics, particularly from the United States, China and Japan, the favourite countries for ecommerce outside Brazil. Brazilians love shopping in foreign shops, and by 2018 there will be 10 million shoppers on those websites That's a lot of people!, says Mauricio Salvador. In fact a survey by Pitney Bowes mentioned in the report by ystats.com indicates that 90% of Brazilians would buy online products from the United States. Mauricio has three interesting tips for this market. The first is to have a website translated into Brazilian Portuguese. The second is to accept the greatest number of possible payment channels, including payment in physical establishments which is very widespread, and PayPal. The third is to be very careful with shipping costs and delivery deadlines, because if you say it will take three weeks and you get it wrong, this will damage your image on the social networks and affect your potential future purchasers, says the chairman of ABCOMM. September 2015 Page 4 of 1 4 www.emarketservices.es
Argentina The second largest market in Latin America is Argentina, which saw sales of 3.4 billion dollars in 2014, and which are set to reach 8.3 billion in 2019 according to Forrester Research. Gustavo Sambucetti, chairman of the Argentinian Chamber of ecommerce (CACE), says that in Argentina 75% of the population already has Internet access. Of that 75%, over 50% have at some point made a purchase via the Internet, which means that there are over 15 million people in the country who shop on the Internet, says Gustavo. Of these online consumers, 37% are regular shoppers, that is to say, they make a purchase at least once a month. These figures are also expected to continue growing next year, as they have done so far. In Argentina the star categories are travel and electronics, according to the report from ystats.com. Sambucetti expands on this information: The sector with the greatest weight is tickets and tourism, which represents 27.5% (9.9 billion pesos) of the turnover for 2014. This is followed by electronics, electrical appliances, and technology. These three categories together represent almost 20%. The chairman of the CACE indicates that these are followed by other categories which although their share is still somewhat lower have seen considerable growth. This is the case of clothing, which grew more than 100% during 2014 compared to 2013; and food and beverages and cleaning products which have also seen a surge in online sales". These increases have been particularly evident in the events termed by the CACE as convenience days, such as Hot Sale and Cyber Monday special days to promote ecommerce by means of one-off offers and discounts, in which these were the top-selling categories. The last Hotsale saw sales of over 1.25 billion dollars. The event attracted almost 2.4 million Internet users who browsed the official website (www.hotsale.com.ar), and 37 million visits were recorded on the websites of the companies taking part throughout the three days, says Gustavo. The bestsellers in units were: footwear, domestic appliances and mobile phones; followed by clothing, holiday packages and TVs. CACE highlights the growth of mobile shopping as a trend to take into account in that country. In our last event, Hot Sale 2015, 41% of the visits to the website were made from mobile devices (smartphones y tablets), notes Sambucetti. In fact he says that Argentinians are exposed to the mobile phone for almost 3.5 hours a day, far more on average than their exposure to any other device, and even more than television. It is therefore essential to have a mobile strategy for breaking into the Argentinian market. When asked what tips he would give companies wishing to access this online market, Gustavo highlights three factors to bear in mind. On the one hand, people tend to search widely online before buying, and therefore the purchasing process takes longer and involves trawling for information. On the other hand he also points out that in Argentina logistical costs account for a very significant proportion of the price of the product, and therefore the delivery formats being offered should be considered very carefully. And finally, the chairman of the CACE also recommends reviewing the financial costs of the operations, understood as the cost of operating with credit cards, and the cost of financing in instalments. September 2015 Page 5 of 1 4 www.emarketservices.es
Mexico In 2014, Mexico invoiced a total of 2.8 billion dollars in ecommerce, which Forrester forecasts will rise to 6.7 billion dollars for 2019. This is the third largest market in the region, and although it already has more purchasers than Argentina with 10.1 million, they spend less. By 2019, 21.1 million Mexicans are expected to access online purchasing. In Mexico, among the most demanded categories online in addition to the commonest category of electronics are music and films. mcommerce is also beginning to take off in the country, with 22% of online consumers making their purchases via smartphone and 7% through tablets, according to a survey by the Comparative Intelligence Unit cited in the report by ystats.com. This percentage of mobile acquisitions is even higher up to 46% in another survey published by PayPal and Ipsos in October 2014, in which apps are the main channel for making purchases. In addition, the conclusions of this study note that smartphone users in Mexico exceeded the world average by over 10 points in four activities related to the purchasing process: search for product information (49%), researching the location of a shop (43%), downloading preferential commercial apps (30%) and QR codes (29%). Mobility is therefore a trend well worth taking into account when deciding on an Internet sales strategy in Mexico. It is calculated that the consumers in these three leading countries Brazil, Argentina and Mexico together will spend 32 billion more by 2019 than they spent in 2014, according to the information from Forrester. Other countries But there is also potential outside the three leaders. Although its population is small (17.8 million), ystats.com indicates that Chile, had the greatest rate of penetration in the region, and ecommerce is growing rapidly, with demand now exceeding the local supply capacity. It is also the country with the highest average spending on online purchases, with 662 dollars, ahead of Brazil (513 dollars) and Argentina (314). Travel, technology and coupons are the most demanded products by the Chilean public. According to IDC estimates, 65 out of every 100 internet users in Chile will make an online purchase by 2018. In Colombia, although the uptake of ecommerce has been sluggish so far, Euromonitor predicts that in five years it will overtake Brazil, Argentina and Mexico in the growth of its online sales, with year-on-year growth of 25% by 2019. A report by PayU Latam indicates that this prediction has already been exceeded, and cites growth of 41.3% between 2013 and 2014, with sales of almost 3.5 billion dollars over 1 billion dollars more than the previous year, and far surpassing expectations. According to this study, the most popular products with Colombians in 2014 were airline tickets and hotel reservations, coupons, electronic goods, clothing and footwear. In Peru, among the factors hindering a faster uptake are people's misgivings about the security of online credit card payments, and the fear of not receiving the product. September 2015 Page 6 of 1 4 www.emarketservices.es
Visa forecasts that the ecommerce market in the country will grow by 8.2% year-on-year until 2018, although below the average of 13% for the region. According to its report entitled ereadiness in Latin America 2014, the largest online sector in the country is travel and tourism, with 87.8% of market share. The importance of emarketplaces Many shoppers in Latin America still have considerable misgivings about making their purchases via the Internet. An example, according to IDC, in Colombia 59% of internet users are afraid of being the victim of fraud in their online purchasing. What's more, as Spain, there is a very widespread culture of going shopping in order to see, touch and try on one's potential purchases. For this reason, emarketplaces, which are already familiar to consumers and trusted by them, are a good option for overcoming barriers and placing products and services in the region with greater guarantees of success. The chairman of CACE highlights that the Argentinian market tends to use this type of platform. According to the latest study by the Argentinian Chamber of ecommerce, 61% of shoppers surveyed have made a purchase through a marketplace, and 53% claim to have used one to sell something, says Sambucetti. In addition, emarketplaces may help to overcome other obstacles of an economic or logistical nature, or involving payments. The chairman of ABCOMM says that they are the easiest and cheapest way to break into the online market in Brazil. The costs and the competition on search engines like Google are so high that you can really gain no benefit from using them as your primary advertising channel, says Mauricio Salvador. This is why a presence on these sales platforms can create a essential visibility as a way of becoming known in the market. Management of delivery services may in some cases be outsourced through the emarketplace itself, as they tend to have agreements with logistics service companies, which makes for faster delivery periods and guarantees the merchandise. Taking into account each country's specific payment formats, using the emarketplaces' own facilities for managing payments also contributes to ensuring that the end customer does not abandon a purchase because the channel that he or she habitually uses is not available. Marcos Pueyrredón says that customer-centric multichannel strategies have proved to be essential for increasing sales and profitability of online retailers, according to the results of a study by the Latin American Institute of ecommerce in conjunction with the company VTEX in Brazil. According to this report, the majority of online retailers with over 200 orders a day participate in an average of 2.5 marketplaces, and by the end of 2015 they will have a presence on five platforms. Marketplaces and transactional markets are one of the most important engines for the growth of ecommerce in Latin America and will be key players in coming years, declares the chairman of the einstitute. September 2015 Page 7 of 1 4 www.emarketservices.es
MercadoLibre, the benchmark for B2C Although the vast worldwide emarketplaces such as the Alibaba and Amazon B2C websites have already disembarked in Latin America, the leader in retail commerce in the region is MercadoLibre, which opened its doors in 1999 and now has ebay as its majority shareholder. This is a B2C emarketplace which allows direct purchases and auctions, with millions of references listed in multiple categories of both goods and services. It has over 126.7 million registered users; in the first quarter of 2015 it reported transactions worth 1649.1 billion dollars, it employs 2,600 people and is listed on the Nasdaq (NASDAQ: MELI). Headquartered in Buenos Aires, MercadoLibre has 13 different websites oriented by country for Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Mexico, Panama, Peru, Portugal, Uruguay and Venezuela. Registering with the website is free although users must register in each particular country, and there is a rate for publication and a commission on the articles sold. Prices differ according to the type of product and the country so it is advisable to check directly on the website of the country of interest. They have a specific department for SMEs entitled MercadoShops which opened its doors in March 2010, and unlike its main platform enables companies to have their own website, define their own layout and design and use their own domain. There are various types of subscription plans: the Basic Plan which is free and includes third-party advertising, or three different plans for professionals paying and without advertising that include additional services. To date the service is available in Argentina, Brazil, Chile, Mexico, Colombia and Venezuela. MercadoPago also has its own payment platform, which can be used not only within MercadoLibre, but also provides services to online retailers belonging to third parties to enable transactions in Argentina, Brazil, Chile, Colombia, Mexico and Venezuela. Its offers 50 different forms of payment, also via mobile devices, and has 90 million shoppers and 150,000 businesses that offer this solution. The number of users and their predominance in the region makes this an excellent gateway to Latin America. For example, the chairman of ABCOMM, Mauricio Salvador, ventures that it is a good strategy for accessing Brazil, as Mercado Libre is the largest emarketplace in the country, with a market share of over 80%. Other B2C multiproduct platforms Another major multisector platform in the region is Linio, which is present in Mexico, Colombia, Peru, Venezuela, Chile, Argentina, Panama and Ecuador. With over 1.8 million products listed and 30 million visits a month, since it opened in 2012 it has managed to attract 9,000 online retailers and over 5 million subscribers. Its focus is B2C, in other words it sells directly to the consumers, and it offers them a simple shopping experience and multiple payment channels. September 2015 Page 8 of 1 4 www.emarketservices.es
As a seller, it allows you to choose in which countries you wish to be present, but it only sells goods, and is not suited to the sale of services. It is free to register and publish products, and users can upload as many as they want, although there is a sales commission of between 6% and 20% depending on the category of article. Linio manages the logistics through its authorised operators, and it is therefore possible to negotiate the most appropriate plan; it also manages payments, and transfers the total amount of the sales made to the seller on a weekly basis. Another platform worth considering is the website for classified ads called OLX. Although it is not specifically for the Latin American market, it does have a major presence in the region and is a leader in countries like Brazil. Worldwide it has over 200 million active users in the 40 countries in which it is present, and 8.3 million transactions take place on it each month. Although it is conceived for exchanges between private individuals (C2C), numerous companies take part by placing their products or buying space on the banners to increase their visibility. Registering and buying and selling are free, although there are payment services to improve the positioning of the offers. AlaMaula is another of the major multiproduct platforms in the region. In Argentina, it is one of the three main electronic marketplaces, together with OLX and MercadoLibre, but it also operates in Brazil, Chile, Colombia, Peru, Costa Rica and Ecuador. Dedicated to classified ads, it has published over 1.4 million ads on the Argentinian website alone. As in the case of OLX, it is more focused on C2C, but a presence can be obtained on the banners on the platform through the Google AdWords advertising network. One very interesting section to consult is "Lo más buscado" ("Most popular searches"), showing the trends in searches for products and services on the platform, and which can serve as a barometer for products that attract the greatest interest among consumers in each country. Falabella has also become one of the premier websites for ecommerce in Latin America, with web pages focused on Chile, Argentina, Peru and Colombia. Its multiple pages sell everything from electronics to articles for decoration, fashion or travel. The process of signing up providers involves sending in a registration form and arranging a meeting to assess the possibilities. Marcos Pueyrredón also points us toward other multiproduct websites and emarketplaces in the region that are well worth exploring such as Walmart, Novapuntocom, Shopfacil and Soubarato in Brazil; Avenida and Avalancha in Argentina and Clickonero and winbits in Mexico. Although not technically an emarketplace, it is worth highlighting the importance in the region of the price comparison website Buscapé, which is present in over 21 countries in Latin America. Through CPC payment agreements with companies, it directs traffic from searches by potential customers for products and services on its website to retailers and emarketplaces, and is therefore also a useful way to increase visibility in online B2C sales. September 2015 Page 9 of 1 4 www.emarketservices.es
B2B emarketplaces in the region Latin American companies are also signing up for online channels to increase their sales or to look for providers. In recent years we have seen more and more companies, entrepreneurs and professionals in Latin America closing ranks in pursuit of a single objective: that of incorporating the online channel integrally within their business models, says the chairman of the einstitute. In fact, Marcos says that for many companies this channel is now the primary shop in terms of sales volume and profitability. For this reason B2B strategies can also be effective in this region. One of the emarketplaces with the longest trajectory in sales between companies is Senegocia, which since 2000 has been bringing together buyers and sellers in Chile, Argentina, Peru and Colombia. Senegocia, which focuses on supply, sees around 400 million dollars a year transacted by its over 15,000 registered providers. It offers access to direct purchasing and also arranges auctions for large volume and high value purchases. The Brazilian website Mercado Eletrônico has a similar profile. It opened its doors in 1994 and has extended its operations to Argentina, Chile, Colombia, Mexico, United States, Portugal and Spain. They have a public and private Marketplace section and offer software for eprocurement and esourcing and operational and content services. The marketplace Perfeto, based in Guatemala, is another channel for finding providers in the area. Their mission is to connect SMEs in the region with potential purchasers all over the world. Mercatrade, oriented to sellers, is one of the most visited websites for B2B exchanges in Latin America and the Caribbean. With offices in Panama, it has three types of subscription: one free, which allows the user to publish up to 3 products and buy from its providers; another called Premium Pro, for 49 dollars a month, which allows users to publish their entire catalogue; and Premium Platino, for 99 dollars, where you can choose the categories in which your articles appear. Another website, Solostocks, headquartered in Spain, has online platforms for several markets in the region and focuses particularly on promoting the seller companies. Its specific websites provide access to sales and purchases in Argentina, Chile, Colombia, Brazil and Mexico. Guía del Mercosur is another emarketplace of interest for accessing the zone comprising Brazil, Argentina, Uruguay, Paraguay and Venezuela. It has a company directory, a product catalogue and a section for purchasing requests where new business opportunities can be found. Basic registration in Guía del Mercosur is free, with the option of converting it to Premium and uploading an unlimited number of products. But we can also find platforms for exchange between companies categorised by country. For example, the leader in B2B in Chile is Mercantil, which is not only an emarketplace, but also a community for networking and establishing contacts, although it operates all over Latin America. It also has Chilecompra, a platform for managing purchases by public administrations with over 360,000 registered companies. Brazil has a number of specific emarketplaces such as BrazilBiz, for sourcing local companies and professionals among its over 80,000 registered members, and B2Brazil, which allows access by international sellers, and where registration is free. September 2015 Page 1 0 of 1 4 www.emarketservices.es
Central Mayoreo has set up in the Mexican market with a similar style to Alibaba, and allows purchases and sales between companies in multiple product categories. Although it opened its doors in 2014, it already has 20,000 wholesalers registered, and for the time being offers free registration of sellers. Although ecommerce in Venezuela is still in its early stages, it does have specific B2B emarketplaces like Venexport, oriented above all to helping national companies to sell their products outside the country. It includes a directory of Venezuelan companies which is useful when looking for providers. Specialised emarketplaces In addition to multiproduct emarketplaces, there are also platforms specialising in a single sector focusing on Latin America for selling both B2B and B2C. For fashion, footwear and accessories, one of the leaders is Dafiti, which sells to consumers in Brazil, Argentina, Chile, Colombia, Mexico and Venezuela. With a catalogue of over 15,000 products in each country and 400 brands, it has won over the customers with a carefully crafted purchasing experience and the possibility of free exchanges and returns. Registration of providers is not automatic but requires applicants to fill in a form, and each case is assessed on its individual merits. Also focusing on footwear and fashion is Fotter in Argentina, and Estilomio in Peru, with a similar system to Dafiti for access for providers. The tourism sector has an ally on the website Despegar, a benchmark for travel ecommerce in 21 countries in Latin America. It is the largest online agency and offers flights, hotels and holiday packages all over the world, with the added attraction of the lowest prices. Users can add hotels and rental car fleets automatically from its website at no cost. Handicrafts also have their own specific online sales platform focusing on Latin America. The Argentinian websites Elo7 with 316 shops, and Ofeliz Feliz, present in Argentina, Mexico, Colombia, Brazil, Chile, Peru, Uruguay and Spain, compete in the area with the global Marketplace Etsy, also very active. Participation in all of them is based on a commission on each sale, but registration and uploading products are free. MerproAr is an interesting B2B Marketplace for wine producers and distributors. Although it is focused on promoting products from Argentina, it has advertising space which serves as an opportunity to introduce new products to industry agents in the country. In B2C the same country there is also TonelPrivado, which includes other types of alcoholic beverages. The agri-food sector has a number of websites focused on countries in Latin America. Agroads works in Argentina and Brazil, and has space for advertising everything from used machinery to compound feeds. Specifically for Argentina there is Meganar for heads of livestock, and Agrositio, focusing primarily on agricultural machinery. The emarketplace Innoversia is dedicated to engineering and innovation, and connects companies with specific technology needs with researchers who can solve the challenges that are put to them. We could continue enumerating each industry, but the best idea is to check the international emarketplace directory published by emarket Services to find websites of interest for each company by geographic region and product category. September 2015 Page 1 1 of 1 4 www.emarketservices.es
Challenges for ecommerce in Latin America Although the figures point to major growth in online sales, it is also advisable to bear in mind the two great challenges: in many regions the logistics are hindered by the available infrastructures, and there is limited use of banks and credit cards among consumers. It may therefore be advisable to adopt alternative payment methods to access the segment of the population with no bank accounts. In Argentina and Mexico some online retailers have developed cash-on-delivery payment options, whereas Brazil uses what is known as the "boleto bancário" or banking voucher, an invoice with a barcode regulated by the Central Bank of Brazil and managed by EBANX, which is printed out and can be paid both online and offline (in supermarkets or cashpoints). The risk of non-payment is therefore eliminated as EBANX makes monthly payments to the sellers subscribed to this payment channel. Sellers can avoid some of these drawbacks by using emarketplaces. Specific platforms have also arisen for cross-border ecommerce with Latin America. One example is Traetelo, which allows sellers from the United States to publish and sell their offers to consumers in over 20 countries. They have a logistics centre in Miami, and payments to the companies are made in dollars; they themselves pay the taxes, customs and international shipping costs. Furthermore, to protect their customers, all their orders are provided with an antifraud service, which is an excellent measure for allaying customers' fears. Sellers are not charged for registration or for including the products on the website, although there is a commission for all sales made. Similar in style is the recently inaugurated Iguama, which so far only operates in Guatemala but plans to open and in another 17 Latin American markets. Once again it focuses on sellers from the United States, although if users already have offices and/or warehouses there, these platforms can help to make the leap to Latin America easier. Although purchases via mobile devices are becoming ever more popular, they still represent no more than 5% of total online sales according to data from Forrester Research. In most of Latin America the networks are slower than 3G, which makes searching and mobile commerce very difficult with these devices. Finally another major obstacle is tax. Both in Argentina and Brazil there are high taxes on imports, and Forrester Research therefore recommends careful consideration of whether our products will continue to be affordable after these are added on. Brazil has a flat rate of 60% on costs, insurance and shipping for goods with a value up to 3,000 dollars, in addition to being able to apply customs rates of up to 35% and taxes on sales. Thus once taxes and commissions have been added, the value of the products is often doubled by the time it reaches the consumer. Nonetheless this does not seem to discourage the middle classes in Brazil from continuing to shop online. In Argentina, value-added tax of 21% is applied in addition to a customs tax of up to 35%. September 2015 Page 1 2 of 1 4 www.emarketservices.es
Tips for a successful strategy The chairman of einstitute, Marcos Pueyrredón, gives us some advice to take into account in any online sales strategy: Anyone wanting to sell online in Latin America should pay particular attention to the following tips if they want to be successful, says Pueyrredón: - Knowledge and Professionalisation: An in-depth knowledge of the state-of-theart in each country, and the professionalisation of all the links in the online sales chain substantially reduces mistakes and negative shopping experiences for customers, thereby increasing profitability. - Multichannel, and use of B2B2C or B2B2B emarketplace models helps ensure a positive purchasing experience by making use of the ecommerce muscles of third parties who are well placed in each market thereby making it easier to increase conversion, and in many cases are models of CPA. - Take advantage of the penetration and use of mobile devices: Increasing numbers of Latin American consumers are flocking to access the Internet through their mobile devices, generating a window of opportunity to be exploited to acquire online purchases. - Generate trust: A challenge for all ecommerce, but particularly in Latin America. - Take part in the Tour ecommerce DAY, a meeting point for the sector in Latin America. This will give you a feel for the rhythms of ecommerce and Internet business in each country and in the region. The purpose of this event is to increase the quantity and quality of the offering, by sharing good Internet business practices in order to generate a positive experience for consumers. It is because of this commitment that in 2015 we were able to hold the 50th edition of ecommerce Day at the regional level now extending to twelve countries in Latin America as a good example of the importance and impact of our sector for the development of our economies and the companies in our countries, notes Marcos. The chairman of the Latin American Institute of ecommerce also highlights that there are local companies dedicated to the end-to-end creation and management of online strategies in the region, such as Brand Live Commerce in Argentina, eretail in Peru and ecomsur in Chile. September 2015 Page 1 3 of 1 4 www.emarketservices.es
The future of ecommerce in Latin America emarketer estimates that ecommerce in Latin America will continue to grow at a doubledigit rate until 2018, when it predicts sales of 140.9 billion dollars. We see a very promising future, and we are set to be one of the star continents, with numerous success stories on a regional level, says Marcos Pueyrredón. From the world of online business either due to necessity, evolution, capacity or vision all of us can build the highway through which ecommerce will continue growing until it reaches penetration rates of over 20% compared to traditional channels in many industries and sectors in the coming years, declares Marcos. But the future is not all rosy. Pueyrredón tells us that companies who set out to sell via the Internet in the region tend to start with very high expectations and in many cases their energy and motivation is dissipated when they fail to receive the results they anticipate. Companies and enterprises have many challenges to overcome when supplementing their traditional sales channels with the new business models generated by Internet and the new technologies, says the Brazil VP of VTEX. However the chairman of the einstitute believes that they are currently undergoing a second ecommerce revolution in Latin America, where the ubiquity of consumers and the multiple devices bring new opportunities and challenges for the sale of goods and services. For these reasons, our institution is working to promote the development of the online offering, and particularly its professionalisation, in order to generate a positive purchasing experience for consumers, says Marcos. In fact they have numerous initiatives designed to achieve these objectives, as can be seen in their regional action plan for 2015. In short, although there are obstacles to be overcome, the population's growing appetite for foreign products and its favourable growth forecasts make Latin America a promising region on which to focus when considering an online internationalisation process. However, careful advance planning is always necessary, following the advice of experts like Marcos, to ensure that the drawbacks do not outweigh the opportunities it can offer. September 2015 Page 1 4 of 1 4 www.emarketservices.es