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Ecommerce

The Room for Mobile Retail Growth in Latin America

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Ecommerce has already become a retail fixture across the Western world, and it takes up a larger portion of overall retail activity with each passing year, but there’s still a lot of room for expansion — and then there’s the mobile share of that activity, which is expected to pass the 50% mark in the US by 2021.

 

If you think mobile buying conditions are favorable in countries like the US and the UK, though, then you’re missing the much greater entrepreneurial opportunities in Latin America.

With a population well over twice that of the US, high levels of smartphone ownership, and comparatively low levels of desktop-based ecommerce, it’s clear that there’s a lot of money to be made through mobile selling in Latin America.

Let’s take a closer look at why there’s so much room for mobile retail growth:

Ecommerce in general is fairly new there

If you enter into the mobile ecommerce market of a country in Latin America, you’ll have the chance to get out ahead of the game, because ecommerce as a concept is still fairly new in the region.

In the absence of an industry-changing giant like Amazon coming along and disrupting everything with pioneering logistics and the ability to offer prices that other retailers can’t match, brick and mortar stores have been able to retain their customer bases.

But this isn’t enough to stop the march towards ecommerce — all it can do is change the circumstances somewhat. Instead of one company clenching an iron fist around the market — MercadoLibre is the closest thing to an Amazon equivalent, but it doesn’t cast the same kind of shadow — Latin American countries can have numerous retailers in reasonable competition with one another both online and offline, with mobile communication at the core of user experience.

And though it might be a long time before infrastructure develops to the point at which delivery standards can approach those of US ecommerce retailers, alternative shipment methods (click and collect, in particular, though drone fleets might become standard in the near future) will ensure that ecommerce has enough appeal to challenge traditional retail.

The economies are on the cusp of recovery

With the notable rates of ecommerce growth in Latin American countries, it can be easy to forget that the area fell into recession in 2016, and is still in the process of emerging from it. While it remains more convenient to buy from physical stores, ecommerce will remain a luxury for most, one that will rise or fall based on levels of disposable income.

As such, as the region’s economies start to gather pace and people have more money to spend, mobile retail will be the natural beneficiary. With a smartphone at your side, you can place spur-of-the-moment orders at any time of the day (or even in the middle of the night), having significantly less time to stop and think about whether you really need something.

This type of indulgence isn’t well suited to desktop purchasing with complex checkout systems, but a slick mobile interface followed by an invisible payment system will invariably get people spending far more than they ever expected to.

Mobile systems are incredibly flexible

Compared to people in other parts of the world, Latin Americans are considerably less likely to have bank accounts or own credit cards, instead preferring local payment options, such as cash payments like the boleto bancário in Brazil. Factor in the level of desktop penetration being hugely lower than in Western countries, and you have circumstances incredibly ripe for mobile retail.

Read also: Mobile Payments Are More Popular in Latin America Than in The U.S. Here’s Why

Now that there’s such a prevalence of payment methods available to anyone online, and smartphone ownership is high (projected to hit 71% by 2020, which is vast compared to the level of desktop penetration), it’s only logical to anticipate mobile buying to skyrocket in the coming years.

Digital wallets that offer invisible payments can be created and topped up with cash (and secured with blockchain tech and biometrics), ensuring that even those who remain reluctant to get bank accounts or credit cards can make online payments.

In fact, it’s entirely possible that the slowly-rising levels of PC ownership will actually start to dip soon enough, because it’s increasingly viable (albeit still somewhat tricky) to handle all your professional and personal business using just a smartphone.

With a vaguely recent device and a basic data plan, you can communicate, find work, place orders, buy or sell businesses, and even fulfill general work duties through the addition of a Bluetooth keyboard and an internet-capable TV. If digital activity, in general, remains strongly mobile, and online retail grows, then mobile retail will benefit by default.

Chatbots can reach customers anywhere

In recent years, Western countries have seen the concept of conversational commerce become a reality through a sophisticated store or brand chatbots for systems such as Facebook Messenger. Automation, personalization, natural language processing, and one-click payments combine to make it possible for a shopper to view various products before choosing and ordering one without needing to leave their chat window.

With the ubiquity of smartphones in Latin America and the popularity of chat apps (most notably WhatsApp) and social networks (Brazil actually has the 3rd-largest number of Facebook users in the world, expected to hit 100 million by 2021), there’s plenty of room for direct communication in the digital marketing world.

As the years go by, the brands that find ways to extend personalized offers directly to their customers through mobile exchanges will be the best placed to earn customer loyalty and pick up the expedient sales that could otherwise go to any convenient retailer. Factor in the mobile-enabled ability to localize offers and you have a very profitable recipe.

At the moment, Latin America offers the perfect combination of growth that has already occurred and growth that has yet to take place. There’s no need to speculate about the potential of mobile commerce because it’s already flourishing, but it can go so much further that you can get involved today and benefit enormously. Anyone looking to invest in a market would be well advised to give it some serious consideration.

Victoria Greene is an ecommerce marketing expert and freelance writer who has a bad habit of buying things online in the middle of the night. You can read more of her work at her blog Victoria Ecommerce.

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