The e-commerce segment is expected to see a double-digit boost in Latin America within the next couple of years, with Mexico and Brazil being the top performers in the region, according to a new study.
The research carried out by DHL suggests that e-commerce in the region will grow by 22% by 2021, up by 25% in Mexico and 17% in Brazil. These two countries are within the larger markets segment, while countries such as Colombia, Argentina and Chile and considered medium-sized markets, and Central American and Caribbean nations are deemed small.
Medium and small markets have great potential when it comes to cross-border e-commerce, according to the study, with the ability to cater to consumers in a fast and cost-effective manner.
Large players tend to pave the way when it comes to making access to e-commerce easier for consumers, according to the study, with social media becoming increasingly critical in influencing buying decisions.
However, there are bottlenecks to e-commerce in the region, such as slow customs clearance, congestion and sub-standard infrastructure for last-mile delivery, in addition to the complexity of reverse logistics processes for returns.
"The industry is still relatively developing in the region, so there is still room for retailers to lay a foundation and for logistics operators to support them by building supply chains for efficient e-commerce," said Matthias Heutger, Global Head of Innovation. and commercial development at DHL.
According to Forrester Research, consumers in Argentina, Brazil, Chile, Colombia, Mexico, and Peru. will spend $129 billion online by 2023, representing a compound annual growth rate (CAGR) of 22.3% from 2018.
Differently to DHL's predictions, Brazil is the largest e-commerce market in the region and will remain so, according to the analyst house. Forrester predicts this year will close with online retail sales more than doubling those of the next two largest markets in Latin America - Mexico and Argentina - combined.