E-commerce now takes more than 3% of sales in 15 markets worldwide, up from eight in 2019. There was also a step change in who uses online shopping. It used to be predominantly a channel for time-poor families who required big weekly shops, but it is now a channel for everyone.
The potential for growth in Latin America is even more pronounced and E-commerce value grew 238% year on year, with frequency of purchase up by 14% across the region.
As in other regions of the world, there is a strong skew towards E-commerce's popularity in big cities from Shanghai where online share is 32.1% (v 25% total market), to São Paulo where it is 1.1% (v 0.5% for Brazil as a whole).
Across Latin America the main platforms for E-commerce are the online shopping platforms and applications developed by supermarket chains. We also see alternative channels taking advantage of messaging applications such as WhatsApp.
This platform is increasingly becoming a way for independent stores and informal channels to connect with their shoppers. At Kantar LATAM we have the ability to monitor all E-commerce channels, including these non-traditional uses of messaging platforms.
The story of E-commerce in 2020 wasn’t a constant uphill stroll, its growth broadly reflected the impact of mobility restrictions. As restrictions decreased later in the year, the channel dropped from its Q3 highs.
Lots of households had the chance to experiment with this channel and it is now part of their basket of retail options. When the pandemic recedes, it will remain at a higher level of usage than in previous years and growth will continue, although the pace may slow down.
The number of new digital shoppers in Brazil grew by more than two million in the second half of 2020. E-commerce reached into nearly 13% of Brazilian homes, with access via WhatsApp accounting for five percentage points of that total.
In Argentina, E-commerce gains came from those at highest risk from COVID-19 backed up by spending from E-commerce natives in other categories, including young people with strong purchasing power. Loyalty to E-commerce among these shoppers is extremely high and its growth represents an offline to online migration among modern channel shoppers. It’s vital for FMCG brands to a strong O2O strategy.
Nearly 18% of Colombian households made at least one E-commerce purchase in 2020. Once life returns to normal after COVID-19, 53% of digital shoppers said that they would continue to buy online in the future and 12% said that they would spend even more online.
WhatsApp democratising E-commerce
Whilst E-commerce remains relatively small in Brazil, the growth there is still impressive, with two million more shoppers in the second half of the year compared to the first half, creating an additional 18 million new buying occasions.
This doubling of penetration in Brazil is partly down to messaging apps such as WhatsApp, with almost 40% of online shoppers using WhatsApp to make an FMCG purchase.
WhatsApp has enabled smaller, traditional retailers (which are more prominent in LatAm than any other region) to have an online presence. It has given consumers a route to shop online in a country where smartphone ownership is higher than that of personal computers. It also provides households outside of metropolitan areas an E-commerce option, with E-commerce purchasing via WhatsApp higher in the countryside.
WhatsApp is not just accelerating E-commerce growth in Brazil. It is doing so across most of the Latam region where WhatsApp is the main communication app for many.
