E-Commerce Impact
Shaping true omnichannel habits
E-commerce in Latin America is riding a wave of significant expansion. With more consumers stepping into the digital realm, increasing their spending per transaction, and growing basket sizes, e-commerce is solidifying its position as a rising retail powerhouse. In essence, consumers are settling into digital shopping routines, marking ripe territory for further investment and channel development.
Here we see both the growth and potential of e-commerce in the Latin American market, emphasising its ability to attract a substantial number of new shoppers as our chameleons become increasingly connected. Key performance indicators (KPIs) for e-commerce show almost 2 million new shoppers have been attracted to this channel, with a notable increase in the average transaction value (ticket size). We see a steady increase in penetration and (more recently) basket size, with a slight increase in price, and the frequency of purchases showing more minor growth.
Convenience and expanded access to credit cards play their part
But e-commerce isn’t growing in isolation of other shopping behaviours, it is happening in tune with the development of true omnichannel shopping.
While 'pure e-commerce' platforms hold their ground, providing niche services and products without a brick-and-mortar footprint, it's the physical retailers who are expanding their horizons into the digital space (non pure e-commerce) that are capturing the market's heart. They bring a legacy of trust and an assurance of quality to the virtual shopping cart, resonating deeply with consumers' evolving preferences.
The data shows a steady climb in e-commerce penetration on a regional basis, outpacing the growth of app-based and WhatsApp shopping, signalling a maturing digital market. Yet, it's the steady, sturdy growth of omnichannel retail that heralds a new era — where shoppers lead the way in embracing digital platforms while still maintaining their ties to physical stores.
The evidence is clear: online channels are being used to complement other channels. For example, in Mexico, nearly half of online buyers use e-commerce for 'Fill In' purchases. There's also a steady, though less dramatic, increase in the use of e-commerce for 'Stock Up' shopping missions. Mexico is a clear regional leader with a 7-percentage point increase in e-commerce penetration in just a year, representing the addition of 1.8 million new households engaging in online shopping.
However, online growth will continue to look different across the region. Some, like Mexico, are moving forward — we also see Chile and Central America outperforming their previous year — but others are moving backwards in their penetration levels. Of course, there are reasons behind such slides that are likely to be reversed. For example, Argentina’s numbers are going backwards, but we know rampant inflation has played a big part in those behaviours as people look to cheaper channels.
Mexico's substantial growth in e-commerce penetration signifies a major shift in consumer shopping behaviour and represents a significant opportunity for digital market expansion. Regional or global brands should consider focusing their online retail strategies on Mexico as a burgeoning e-commerce hub within the region. Alternatively, lifting and shifting the approach Mexico has taken into another market is another way to think about learning from the Mexican digital pioneers. In other words, what are the learnings from Mexico that can be applied elsewhere to accelerate online growth, assuming that’s your target?
