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Covid-19 has had a major impact on consumer shopping behavior in Latin America, perhaps more than any other region. Due to necessity, people have become the first e-commerce consumers, buying essentials such as groceries, household items, and clothes.

These trends continued, making Latin America one of the fastest growing e-commerce markets.

Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico, Panama and Peru are the main online markets. In total, in these eight countries, 79% of people have internet access and 50% of them will buy things online in 2021, according to research firm RetailX, up from 33% in 2017. 

While Costa Rica, Panama, and Peru have low e-commerce revenues due to their small populations, Brazil, Mexico, Argentina, Chile, and Colombia show significant e-commerce profits.

 

Barriers to growth 

Obstacles still exist in Latin America – mainly payments and weapons. Half of the people don’t have a bank account. Rural areas have few roads. Therefore, the market offers customers and business solutions that dominate the e-commerce business of the region.

Argentina’s Mercado Libre is the most prominent player. According to Bloomberg Intelligence, revenue at Mercado Libre grew 90% in 2020 as the pandemic forced the closure of physical stores. Mercado Libre offers its own logistics service that offers shipping and warehousing options for local and foreign customers. Like Amazon, Mercado Libre has air freight and delivery trucks that serve large markets, especially cities.

In addition, last year Mercado Libre acquired Kangu, a logistics company from Brazil that also operates in Colombia and Mexico. And Pago, the fintech arm of Mercado Libre, serves as a payment processor. Customers in Brazil and Mexico can also use PayPal for Mercado Libre purchases.

Customer characteristics 

Latin American consumers are still skeptical of online products and rely on customer reviews. Grocery stores have dominated online sales during this pandemic. But in 2022, electronics will generate the most sales in the top eight countries, according to Statista, followed by fashion. 

Cell phone usage varies by country, according to Statista. Brazil has the strongest preference for mobile for online shopping with 48% in 2022, from 27% in 2017. Colombians and Costa Ricans are also big adopters of my business, but usage hasn’t grown much in recent years.

 

Statistics by country 

This information comes from RetailX, unless otherwise stated. 

Argentina. 90 percent of Argentines use the Internet. Of them, 58% buy online. E-commerce revenue in Argentina increased by 68% in 2021 compared to 2020, according to the Argentine Chamber of Electronic Commerce. The majority of online shoppers are between the ages of 25 and 44. Although the average person spends up to $420 in 2022 compared to 2021 according to Statista, the total e-commerce revenue has declined due to Argentina’s struggling economy. 

 

Brazil. In 2021, online sales more than doubled compared to 2019 and 30% more in 2020. 84% of people use the Internet, and 53% of Internet users do business online, up from 38% in 2017.

 Brazil’s e-commerce market is relatively small; about half are under the age of 35. Only 9% are 55 years or older. The average amount spent online is $397. 

 

Chile. Chile has the highest number of internet users and e-commerce adoption. 94% of the population uses the Internet and 62% of the workforce purchases online. Chile has a higher domestic product than most Latin American countries, and the average annual expenditure for e-commerce consumers is high at $780 so far for 2022. 

 

Colombia. In 2021, Colombia is the third largest e-commerce market in Latin America. Forty-nine percent of Internet users shop online, up from 28% in 2017. Fifty-three percent of consumers are 34 or older. The transportation network in Colombia is not good and not enough for fast deliveries, but consumers do not seem to be disappointed.

 

Costa Rica. The population of Costa Rica is only 5.2 million. 80% are internet users, but only 45% buy online. Nevertheless, interest in online shopping has doubled since 2017. Average annual e-commerce spending will be $711 in 2022, from $477 in 2019. 

 

Mexico. E-commerce revenue in Mexico grew by 81% between 2019 and 2020, according to the Mexican Online Marketing Association, making it the fourth fastest growing e-commerce market in ‘the world. 

It is likely that Mexico will have about 77 million e-commerce consumers by 2025, as the infrastructure improves and the adoption of digital literacy. This represents an increase from 50.7 million e-commerce customers in 2020.

Mexico has seen the largest net turnover of any market in Latin America, especially for food, which has grown by more than 100% since the start of the pandemic. Seventy-six percent of people are internet users in 2021, with 44% shopping online, up from 26% in 2017. Online shoppers will spend an average of $727 in 2022 versus $249 in 2017.

 

Panama. Of the 4.3 million people living in Panama, almost three-quarters are Internet users. Forty-six percent of the users shop online, up from 25% in 2017, making an average purchase of $710 in 2022. 

 

Peru. In 2021, 71% of Peruvians are Internet users. Forty-four percent of users will make purchases online in 2021, up from 25% in 2017. One-third of e-commerce consumers in Peru are between 25 and 34 years old, while 20% are 45 or older.

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