In 2010, Latin America topped internet retailing growth globally, achieving a 24% increase together with Asia Pacific, while over the next five years it is expected to remain the fastest growing region, registering a 17% CAGR in constant value terms.
Internet retailing spreading to more regions and more consumers in Brazil
Brazil is by far the biggest internet retail market, accounting for 70% of all regional sales. Internet retailing is beginning to shift from the economic hub located between São Paulo and Rio de Janeiro to the Northeast region. The number of internet users has risen the most in the North and Northeast regions. According to the IBGE (Instituto Brasileiro de Geografia e Estatística), the number of internet users rose by 214% in the Northeast and 171% in the North in 2010.
Argentina enjoys the strongest growth in Latin America
Argentina and Venezuela were the markets which achieved the strongest internet retailing growth in 2010, reaching almost 40% in current terms. Argentina was also the fastest growing market historically, posting over a 57% CAGR between 2005 and 2010.
Rapid growth of internet usage is one of the reasons behind the sustained growth in Argentina, another reason being that consumers are using the internet to shop for better prices. According to Gonzalo Tomas Benitez from Le Shop, the current economic situation is helping as “people are turning to shopping online because it is a ‘rational buy’ which avoids temptation. Shopping on the web saves time and controls what you purchase, avoiding impulse buying”.
Internet retailing is the preserve of the young, educated and affluent
In Mexico, as in other emerging markets, internet access and e-commerce remain the preserve of more affluent sections of society. While the number of internet users continues to rise, a large proportion of these belong to income groups A, B and C+, which account for around 20% of the total population, compared to around 40% of all internet users. Meanwhile, one of the lower-income groups (D) which represents around 37% of the total population did not register any increase in the number of internet users in 2008/2009. The economic crisis of 2009 further worsened this situation. Indeed, the share of households with a home computer among lower-income groups (D and E) fell by three percentage points in 2008/2009 to 12%.
Very positive outlook for internet retailing in Latin America
Latin America will be the region to register the strongest e-commerce growth globally, posting a 17% constant value CAGR over 2010-2015. In 2015, sales will reach just over US$25 billion, although this will represent just 4% of global e-commerce sales.
Growth will be driven by an increase in online users and improvements in infrastructure, such as faster broadband services, higher household PC and laptop penetration and improvements in payment and delivery services.