New in Retail: Aeropost International Services SA in Central America and the Caribbean

This article is a part of Euromonitor International’s New In Retail series that showcases some of the most interesting retailing concepts from 2016. This month’s entry in the New in Retail series is an overview of the evolving business model of Aeropost International Services SA, a courier service facilitating e-commerce across Latin America with emphasis on Central America and the Caribbean.

A leading courier company facilitates cross-border retailing

Aeropost is a leading courier company that facilitates cross-border retailing from US-based websites to Latin America.  Recently, the company has taken the initiative to begin to evolve from being purely a courier company to include operations as an internet retailer itself.  In 2016, Aeropost began offering goods such as electronics, personal accessories and apparel available for sale via its website under its all-included price concept. The all-included price concept means that the price consumers see on the website is inclusive of all fees for shipping, handling, and local customs.  In other cross-border transactions, it is often difficult for consumers to know the final price at the time of purchase.

Aeropost leverages market insights gained as a courier company to market to customers

Because Aeropost is an established courier company, it has considerable insight into what kinds of products consumers in the markets it serves prefer to buy from US websites and can tailor its own offerings accordingly.  Offering items for sale via its own website requires Aeropost to handle products’ inventories directly, but also allows them to increase their communication with consumers.  For example, the company now sends shoppers with active Aeropost accounts regular emails with weekly promotions, such as a tablet for children and other electronics.  The increased contact with consumers also facilitates loyalty initiatives: Aeropost features promotions such as getting a US$10 coupon for every two purchases made through the Aeropost website, which can be redeemed on the shopper’s next order.

Becoming a direct e-commerce operator may position Aeropost for future growth

This shift in strategy from being purely a courier company to introducing direct e-commerce operations gives Aeropost potential to develop further as a strong regional player in e-commerce over the next five years, particularly in countries in which there are few internet retailers with local presence.  The move also sets the stage for expanding Aeropost’s presence throughout more Latin American countries (while the company has operations in most countries in Latin America, currently the company has more presence within Central America and the Caribbean). Another possible next step for the company would be to invest in establishing a regional hub to handle product inventory, creating additional scale savings and making Aeropost more capable of distributing products throughout the continent to further develop their operations in South America.