E-commerce in Latin America – Current scenario and opportunities

5 min
Latin America in Ecommerce

You can be certain that it is not by chance that some of the world’s leading e-commerce platforms and retail solutions are keeping their eyes on the Latin market. We currently see many global players who have never been physically present in the region coming with their offices and, certainly, great expectations. This gives credits to the investments and underlines the strategy of VTEX to develop the region over the past 6 years with great success!

Although market movements are even more important indicators than figures, there is some data that is important to contextualize the current scenario: According to HootSuite’s “We are Social” report of January 2018, the Americas area had a 9% growth in active mobile users, 8% increase in users of social networking sites and 3% in Internet users.

The Global Ecommerce Association (GEA) reports that e-commerce in South America had an average growth of 16.5% in 2017, being one of the most developed regions in the world if we also consider the socioeconomic issues. South America was slightly below Asia (20%) and surprisingly below Europe (19%). Mexico, according to the “We are Social” report, had an increase of 19% in e-commerce.

Let’s go a bit beyond the market figures and movements. According to Daniela Jurado, Partner of VTEX and Head of the global Reseller program, “the Latin American market is still going to evolve a lot! Not because part of the purchases will clearly migrate to e-commerce and to the digital environment, but because we are progressively becoming more omnichannel. The actual growth will occur because there is a knowledge gap from specialized companies and professionals that needs and will be filled.” We want to help you, VTEX Partner, to be decisive for this growth movement!

One language, many countries

Being the leader of the Reseller team for LATAM, Daniela Jurado kept track of different realities within Latin America. Although they have the same language, which makes trade relations easier, there are substantial differences between countries.

For example, according to Daniela, “Mexico is a country with a large population, huge retail potential and the closest to the world leader in e-commerce (United States), but it has local difficulties that still prevent the e-commerce from taking off and have its full potential duly explored. I believe this should happen along the next 2 years, with improvement in anti-fraud, payment and logistics processes. The technology that facilitates the integration, via API, of a range of services that will emerge in the future will get a head start. ”

Countries like Chile and Peru, which have interesting markets, are now opening their doors to SaaS solutions, such as VTEX. If, in the past, there were only ‘on premises’ or ‘open source’ solutions, now the players are looking for solutions that keep pace with the evolution of their business at the same speed as the market demands and at a lower cost, replacing their own development. The focus is turned to business strategies and not to technology anymore.

It is a change of mindset that gradually occurs in Peru and Chile and that is already a reality in countries like Brazil, Argentina and Colombia, where we already operate. As a result, both countries have become targets of even greater VTEX efforts with new partners and a reseller team ready to operate. Yes, friends, everything changes as Mercedes Sosa used to sing… ♪ cambia, todo cambia…

Ms. Jurado still highlights that she was “surprised with countries such as Paraguay, where today we already have a marketplace client, and Ecuador, from where we receive as many leads as more extensive regions do, such as Mexico. Also this year we will follow the Latin American Institute of e-Commerce to Central American countries like Guatemala, Dominican Republic and Costa Rica. The simple fact that Latin America’s leading e-commerce agency holds events there already tells us that there are business opportunities.”

Your role in Latin America

Over the past 6 years, VTEX developed and structured itself in the region, operating throughout Latin America and winning important clients. When we look at SaaS-based enterprise platforms, in some countries like Colombia and Argentina, VTEX already has more than 50% market share. The results we have to date have certainly been achieved because we have important partners that we have conquered throughout this period and today they operate by selling, delivering and maintaining projects, as well as supporting these clients.

“When we started working in Latin America, we found few but excellent partners who already saw the e-commerce market as a business opportunity and the future of business transactions. The vast majority of these partners we conquered at the beginning of our foray still stand out today within our VTEX Partner program,” says Ms. Jurado. This is because these agencies have understood that their role is not just to deliver projects. They need to evangelize the market! 

If you operate or intend to operate in countries in the region, you need to be aware that we are crawling when we talk about the future of our retail and its maturity. If you, who works with technology and internet, still feel that novelties are coming fast, just imagine how a traditional retailer feels, as now, he is only acquainted with his old buying and selling business. He will certainly be completely lost in facing e-commerce as a business opportunity and will take many wrong steps if he not well advised. Give him a first tip: tell him to read the VTEX Blog.

Positioning yourself as a consultant at these moments will be fundamental not only to gain new customers, but to make them grow healthy in e-commerce! Patience, resilience and knowledge of e-commerce will be critical for the development of a business culture. It will not happen overnight, but it will certainly happen! We know that clients who are well served by VTEX partners have maintenance contracts with their agencies, and recurring billings are necessary for your business to be able to work safely in the development of new projects, further considering your forecast.

VTEX as technology partner

VTEX as technology In addition to the agency’s own knowledge, having a technology partner that allows meeting the main needs and growing together with the business of its clients is fundamental to success. In this regard, VTEX knows that it differs a lot from others. In addition to the advantages of being SaaS multitenant, being fully customizable in the frontend and having features that everyone knows that increase the key KPIs such as Smartcheckout, our platform allows the customer to have other features that may be important for Latin American companies.

The possibility of working cross border is a reality for many brands in the region. Having a distribution and delivery base to other regions is a possibility, as well as having several Distribution Centers spread throughout America. Our logistics module allows the creation of multiple distribution centers, docks and stocks. Even if it is not exactly this model, the possibility of working with multiple languages and currencies is paramount!

Another important feature is that any VTEX retailer can become a marketplace, that is, it can sell products from other stores. Take the example of Tiendas Supervielle, a marketplace of a financial group without own products. In addition, any store can trade and be the seller of another VTEX store with no need for any integration! These are just a few important examples of how VTEX can help its customers.

Success Stories – Clients and Agencies

Companies like Walmart and Frávega have already understood that VTEX is the right choice for their business and today they already operate by selling products from other companies in Argentina under the marketplace model. “In the last Cyber Monday, more than 30% of Frávega’s sales have been for in-store pickup,” reports Daniela Jurado. Our technology allows this through omnichannel features, which are the future of worldwide retail.

Sony, who also works with VTEX, is another interesting case. We have conquered it in an important bidding and it works with and relies on our technology to operate in 7 countries! In the same global e-commerce expansion process with VTEX is Totto, a Colombian client that already took us to 9 countries, among them United Kingdom, where we had no clients yet.

It is important to remember that these results and cases only happen because we have important partners acting together with us. Among LatAm countries, it is common for agencies in one country to serve clients located in another, such as Fizzmod from Argentina, which serves Mosca, an Uruguayan stationery. Today, agencies in other markets, such as Brazil, become partners (producers) of local agencies or even their competitors.

In recent years, agencies in Brazil such as Bluefoot have already worked in some international projects.  Agência Profite and Agência Quatro Digital have already delivered projects in Latin America and are just a few examples. Daniela Jurado further says that “it is a natural movement that we expect to have inverse and parallel flows throughout the world! VTEX partners can and should act globally and rely on our support!

If you are an agency from anywhere in the world, how about conquering the rest of Latin America and the world with us?
We trust you! Count on our VTEX Partner team!

Do you have any question? Contact us at partner@vtex.com