3.2 B2C: South America

According to a recent Report on B2C ecommerce in Latin America, Brazil (68 million) was the leading Latin American country in terms of Internet users in September 2009, followed by Mexico (28 million). Nationwide B2C ecommerce spending in Chile for 2009 was expected to reach US$ 27 billion, up +14% compared to 2008. 17 million Colombians in 2008 had Internet access, accounting for 39% of the total population. Between 2007 and 2008, ecommerce in Mexico grew by +70% with sales of $ 1.6 billion. Internet penetration is considerably lower in Venezuela than the Latin American average, with 5.9 million Internet subscribers. {1} The share of B2C ecommerce sales on total retail sales in Brazil reached 1.1% in 2009, up from 0.9% in 2008. {2}

South America exhibits a diverse scene {3} but an encouraging one. GDP growth for 2011-2012 is put at Argentina: 5%, Brazil: 4.3%, Chile: 5.8%, Colombia: 4.3% and Mexico: 4.1% (against 2.04% for G7 countries and 1.7% for the European Union.) Internet penetration in south America overall is 36.5%. Internet usage in Brazil, Mexico, Argentina, Chile and Peru exceeds the global average, and Hispanic buying power is expected to double from 1990 to 2014. Online ad growth is put at 13.3% over the next five years, and expected to reach $4.2 billion in 2014. Ecommerce growth was 51% per year over the 2003-9 period (34% per year as a percentage of GDP). The big markets will be Brazil (60.8% of total) and Mexico (12.1% of total). The south America breakdown is travel 45%, retail 34% and international retail 13%. Social media sites are popular, and in October 2010, Brazil was Twitter's top global market. {4} New Media Trend Watch estimates that Internet user penetration in Latin America should reach 49.0% by 2014 and 53.4% by 2016. {12}

Faster growth from a smaller base is reflected in ecommerce. {5} Where online retailing sales in the USA. grew 16.1% to $194.3 bn in 2011, the figures for Latin America are 34% growth to an estimated US$ 29.70 bn. The 2011 collective sales of the 10 largest web merchants in Latin America — CompraFacil (Brazil); B2W Inc. (Brazil); Nova Pontocom (Brazil); Dell Inc. (U.S.); Magazine Luiza SA (Brazil); Netshoes (Brazil); Amazon.com (U.S); Fast Shop (Brazil); Carrefour Latin America (France) and Cencosud Retail SA (Chile) — grew year on year by 36.4%, from US$ 3.45 bn to US$ $4.71 bn. The comparable figures for the USA are 25.6% growth, from US$ 73.60 bn to US$ 92.50 bn. For Europe the figures are 22.7%, from US$ 37.69 bn to US $46.22 bn. In 2011 the collective sales of the top 300 Latin America online-only retailers totaled US$ 5.28 bn, an increase of 41.9% from sales of US$ 3.72 billion in 2010.

Forrester's Latin American Online Retail Forecast 2012-2017 looks at B2B and B2C in Brazil, Mexico and Argentina. Brazil is by far the most important. Over half those with monthly incomes exceeding US$ 2,000 per month shop online, and 2012 online sales should exceed US$ 12 bn. The market is heavily driven by mass-market consumers, who are diversifying from books and media to consumer electronics and computer hardware. eCommerce in Mexico remains at an early stage. Online buyers tend to be relatively affluent, but per capita online spending remains low. Many Mexicans do not have credit cards, and access the Internet outside the home or office. Argentina's online retail sales are increasing by a compound annual growth rate of nearly 20%, but are hampered by stringent import restrictions. One encouraging fact is that 56% of Latin American online shoppers start the process through keyword searches on a search engine. {7}

The economic downturn has made existing online shoppers more cautious, however, and a WorldPay study {8} found 25% of Argentines spent more before the recession compared to 24% who spent more afterwards. For Mexico the figures were over 40% before against 21% after. {8} Payment preferences differ between countries. In Argentina the most popular payment methods were credit cards (85%), cash (33%) and debit cards (32%). In Brazil the preferences were credit cards (82%), debit cards (31%) and Paypal (30%) In Mexico the preferences were credit cards (67%), Paypal (52%) and debit cards (51%)

Statista {9} provide an estimated share of global B2C ecommerce sales in Latin America from 2010 to 2016. The shares will rise from 3% in 2011 to 3.4% in 2012 and then fall slowly to 3.2% in 2016. The NewMedia TrendWatch report {10} collects 2011-12 statistics for the region, and an eMarketer report of January 2013 {11} reported that Mexican ecommerce has grown at rates exceeding 40% since 2010, reaching sales of $6.16 bn in 2012

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