The Latin American eCommerce market is undergoing massive change. And it’s set to continue.
1. What 3 words would you use to sum up 2016?
- Positively hectic
2. What do you think have been the most exciting industry trends this year – and what impact have they had?
I don’t know about world-wide industry trends, but one that continues to mesmerize me is how products like Klarna and consumer finance related solutions, continue to grow around the world. In Latin America, we use instalment payments over credit cards. It’s basically the same financing tool, only supplied by the issuing bank, and I’m curious how long the card schemes will wait to introduce that concept globally. It currently represents almost half of the card payments in our region, so there must be opportunities elsewhere.
3. Which market in your region do you think offered the greatest opportunities in 2016? Do you think businesses took full advantage of these?
It’s hard to name just one, but I would say that both Mexico and Argentina present a pretty significant opportunity for different reasons.
In the case of Mexico, it’s the pure size of the market. If ecommerce continues to grow at its current rate, it will soon be as big as Brazil.
For Argentina, the recent economic changes present an opportunity for us to fulfil a bigger role in a market that has the highest ecommerce penetration in the region.
More and more ecommerce businesses are coming around to the idea of localizing their operations in those markets, as they notice they are leaving money on the table. And from a Worldpay perspective, that’s great, as we have the knowledge and abilities to help businesses realise these ambitions.
4. What were the biggest challenges for businesses in your region this year? Do you see these continuing in 2017?
For foreign merchants, the biggest challenge has to be the payments market and understanding customer preferences. Instalments are great for consumers, but a nightmare for unprepared merchants. That is definitely there to stay.
Also, dealing with regulatory bodies, understanding consumer protective laws, challenging logistics, alternative customer support channels; like IM tools, and several other particularities are things merchants need to keep in mind before entering the region.
All of this happens in a fluctuating economic environment and volatile currencies, which means it is a tough region to enter. But those who do well take a big prize back home. The region is growing so fast that successful merchants grow organically, at least 20%, every year.
To find out more about developments in the Latin American eCommerce market, watch out for Part 2 of our interview with Juan…coming later this week.