The Latin American e-commerce retail market is growing at a considerable CAGR of around 25.6% during the forecast period (2021-2027). The market growth is mainly augmented by a rise in internet users, an increase in online sales convenience of mobile e-commerce, and incremental trust in the logic of online purchases. For instance, according to the ITU, around 51% of individuals are using the internet across the globe. Moreover, the direct channel of distribution enables -commerce companies to cut costs compared to local retailor which results in increased sales. The digital transformation programs such as the Colombian government scaling community access areas increase rural connectivity also enhances the growth of the market. 

According to International Trade Administration (ITA), department stores were estimated as primary sales for the e-commerce segment accounting for 50% in the number of orders and 67% in revenues in the Latin America region. The building up of brand recognition with an audience of digital natives has also increased the supply chain in the region over the past few years. However, the high cost of logistics and reverse logistics for the transfer of products and goods, shortage of payment options in the region, and inefficient road connectivity are the constraints that challenge the growth of the market. Most of the logistics companies charge high for shipping and lacks tracking facilities. Conversely, the stepping of new players in the e-commerce industry is creating enormous opportunities for market growth in the country. These companies are significantly focusing on the development of their logistics and warehousing capabilities across the country to cater to a wide range of opportunities.

Impact of COVID-19 on the Latin America E-Commerce Retail Market

The impact of COVID-19 showed high growth in sales in several countries. Many companies and retailers were forced to adopt digitalization to be prevented infection. In Chile, as of March 2020, online sales had increased almost by 300% according to the analysis of ITA and the companies like Mercado Libre doubled their market capitalization which had set huge demand for e-commerce in Chile. Moreover, In Argentina, according to the reports of UNCTAD, there was a 63% increase in online sales in the first half of 2020. However, in the countries such as Peru and Colombia, there were strict actions taken by the government to restrict online activities during the COVID-19 pandemic and hence sales were negatively affected in this region. To increase the market in the global pandemic, many industries come with expansion, collaboration, and offers, for instance, in November 2020, Amazon opened three more logistics centers in Brazil to take advantage of boost the Covid-19 pandemic. The expansion adds 75,000 square meters of distribution space. The increase in logistics operations by the companies is further estimated to increase the e-commerce retail market. 

Segmental Outlook 

The market is segmented based on end-users, products, and devices used. Based on the end-users segment, the market is segmented into business to consumer, business to business, and customer to customer. Based on the product segment, the market is segmented into electronics, fashion, books and magazines, home décor, healthcare, automobile, sports, beauty and personal care, kitchenware, and others. Further, based on the devices used segment, the market is bifurcated into smartphones, tablets, and personal computer

Latin America E-Commerce Retail Market Share by Product Type, 2020 (%)

Electronics Segment to Hold a Lucrative Share in the Latin America E-Commerce Retail market

Amongst the product type segment of the Latin America e-commerce retail market, the electronics segment held one of the largest shares in the product type segment in 2020. There is a high penetration of large ticket electronics items such as large domestic appliances and probably also mobile phones. Many brand-new smartphones are first launched on e-commerce sites which increases the customer's interest from buying through the sites and experience-related offers. E-commerce industries power consumer electronic sales. Amazon Inc., in one of the major companies estimated to take the top spot in consumer electronics share. 

Regional Outlooks

The Latin American e-commerce retail market is analyzed based on the geographical regions that are contributing significantly towards the growth of the market. Based on the geography, the market is segmented into Brazil, Argentina, Mexico, and the Rest of Latin America. Brazil is estimated to be the most dominating country in the region. E-commerce companies are currently focusing on improving the payment options in the country. The increasing number of internet users and changes in digital banking infrastructure are some of the factors that fuel the growth of the market in Brazil. 

Market Player Outlook

Key players of the Latin American e-commerce retail market are Amazon.com, Inc., Alibaba.com., DHL International GmbH, FedEx Corp., Mercado Libre, Inc., Walmart, and Carrefour. These key manufacturers are adopting various strategies such as new product launches and approvals, mergers and acquisitions, partnerships and collaborations, and many others to thrive in a competitive environment. For instance, in March 2020, Sharp and NEC announced a joint venture to combine display solution business and increase the business expansion of two companies. A new company Sharp NEC display solutions were formed. In March 2021, Carrefour announced the acquisition of Walmart’s Brazilian retailer for $13 billion to increase the high growth of its presence in the market. 

The Report Covers

• Market value data analysis of 2020 and forecast to 2027.
• Annualized market revenues ($ million) for each market segment.
• Country-wise analysis of major geographical regions.
• Key companies operating in the Latin American e-commerce retail market based on the availability of data, information related to new product launches, and relevant news is also available in the report.
• Analysis of business strategies by identifying the key market segments positioned for strong growth in the future.
• Analysis of market-entry and market expansion strategies.
• Competitive strategies by identifying ‘who-stands-where in the market.