The Latin American e-commerce market is expected to grow 19 % over the next five years, surpassing the global average of 11 %. The world leader in e-commerce growth, the market is expected to double in value and reach USD 118 billion by 2021.

As the largest economy in Latin America, Brazil represents about 42 % of all B2C e-commerce there, and e-commerce sales have increased 38 % from 2014 through 2017. Mexico and Argentina represent the second- and third-largest e-commerce markets in Latin America.

Latin America, South America mapSpeaking at a recent e-commerce conference in Brazil, CEO Ricardo Alonzo said that if a merchant only looks to mature markets, they can lose big business opportunities. Alonzo said it’s possible you can make more sales expanding to a smaller Latin American country because you can build a niche there. Global e-commerce sellers also need to resist the temptation to view Latin America through a single lens, because each country has its own preferences, weaknesses, and opportunities. How you merchandise and what you sell in each country is key. For example, while midrange apparel brands do well in Colombia, car replacement parts are big in Chile. And you must consider price points as well, as no two Latin American economies are the same.

With several dialects in Latin American regions, you cannot rely solely on machine translation, and should do translation by country, not language. For example, if you use straight machine translation for jeans in Spanish, it would be “vaqueros.” But in Mexico, “vaqueros” means “cowboys.”

As the e-commerce market matures, international payment companies are launching ever more sophisticated products in Latin America, encroaching on the turf of legacy players. But still, there are obstacles that could hinder your global e-commerce initiatives. In Mexico, only 22.6 million credit cards are in use among a population of nearly 120 million. Rather, cash-based methods and bank transfers are popular in both Mexico and Argentina. In Chile, however, the credit card is the dominant form of e-commerce payment.

A terrific way to dip your toe into Latin American waters is to test the e-commerce marketplaces. While Amazon and Walmart are making heavy investments in Latin America, Mercado Libre leads e-commerce across Latin America and the company operates in 13 countries and has more than 175 million users. Thus, there is huge potential in looking at not just the top-tier markets in order to find a lucrative niche.

This is part two of our insights from Shoptalk. Part one about augmented reality and other technology was published 23 May.

Apart from technology, other important topics that lead to e-commerce success were also discussed.

Consumer empowerment

The cosmetics company Glossier was great on stage at Shoptalk. In their presentation, they talked about empowering consumers. They have built a community where consumers becomes ambassadors, help each other and give advice to one another. Glossier said that they put their customer first, then their products. The customers’ voices are the center of their business. They have built a community and included their customers in business development. They work with networks, linking with customers who can talk about their products. They talked a lot about how they create content to help customers make the best decisions before the purchase. For them, it is a must to build their community in order to create loyalty and trust, as this also strengthens the shopping experience. The foundation of their business is content, community and commerce.

Poshmark, a social selling marketplace for fashion, also emphasized the importance of empowering consumers. They have created a community where they connect buyers and sellers with each other. They have managed to get great engagement from their users, who open the app 7–9 times a day. Instead of talking about personalization, they claim that the app is personal. Personal in the sense that it gives individualized recommendations and advice for each unique consumer. Their aim is to reduce the friction of buying and to design a more personal shopping experience. However, they say that the future is about people and not the algorithms, and thus they are skeptical of data-driven algorithms.

Culture matters

team of employeesOne especially memorable presentation was held by the founder and CEO of Boxed. Boxed delivers bulk-sized packages in the US. They mentioned their staff several times during the presentation and praised them. They had good examples of how to listen to employees, and their approach is to let employees grow within the company. They are customer-centric as well as employee-centric. For example, Boxed started a college tuition fund for employees’ kids and have paid for staff’s weddings. They have also been named Best Place to Work in New York City.

Other companies also spoke about the importance of their employees. About the importance of creating a start-up feeling within the company and keeping the mentality of trying, fail and try again. Never giving up, keeping one’s curiosity, and always improving and innovating in order to solve customers’ problems.

In summary, Shoptalk covered a lot of topics! In addition to the above, it covered partnerships, importance of transparency, daring to invest, and the development in augmented and virtual reality, to only mention a few.

Hope you can make the time to attend Shoptalk next year, I would highly recommend it. And I hope you enjoyed reading about some of the topics.

Carin Blom, ecommerce expert and retail analyst at PostNord

Alibaba and Amazon have given customers around the world lofty expectations for fast, inexpensive delivery. In the United States, Amazon has set the bar high with free two-day delivery for its Prime customers. In China, Alibaba’s Tmall and Taobao have made same-day delivery the norm. So how do you meet these expectations of fast, inexpensive delivery for your global e-commerce shoppers?

Regardless of the destination, international shipments that start in the United States are costly. When packages cross borders, customs and duties add another level of cost to the customer. Shipping internationally also means a typical wait time of at least five business days. Also, if the customer is not satisfied, there’s the matter of international returns and those additional shipping costs.

Global e-commerce merchants need to have a localization strategy to get products closer to their customer base. One way is to set up a subsidiary in the country or countries they ship the most to. But then companies would need to secure warehouse space, office space, and hire employees in each market they want to do business in. That can get costly and include substantial bureaucratic red tape.

A simpler solution is to use a third-party warehouse and fulfillment provider in the countries where you have a significant amount of global e-commerce business. Storing inventory with a provider in your most-popular global e-commerce destinations will help you save on shipping costs and get packages to your customers quicker. What’s more, you save money by having low start-up costs. For example, you don’t need to hire staff or own equipment, which means fewer fixed costs. You also improve customer satisfaction because you deliver faster to the local market, and because customs, duties, and VAT will be pre-paid.

And, most important, you can focus on selling because your third-party warehouse and fulfillment provider takes care of your picking, packing, shipping, and inventory management.

For the past decade, e-commerce retailers have been teased with the annual headline “20xx Is the Year of Mobile Commerce.” After years and years of promises unfulfilled, mobile commerce is finally retail’s reality. eMarketer reported that global mobile commerce sales rose 40.3 % in 2017 to USD 1357 trillion, representing 6 % of total retail sales. By 2021, eMarketer projects that mobile commerce will account for 72.9 % of the e-commerce market.

What’s Fueled This Growth?

Growth has been helped along by consumers feeling more comfortable making purchases on their smartphones and, in some regions, a greater selection of low-cost items like apparel, which encourages impulse buying. Voice shopping has made it simple for even technophobes to find products or place an online order. With Google recently reporting that 20 % of mobile searches are triggered by voice, there is clearly a movement in that direction. Also, in emerging markets such as India, Malaysia, Nigeria, South Africa, and Taiwan, desktop computers never achieved the same levels of market penetration, so consumers there use mobile devices as their primary internet connections.

Are You Mobile-Ready?

Mobile e-commerce shoppingWith mobile commerce on the rise globally, it is necessary that your website is ready for mobile shopping. For example. while smartphone penetration is high in Brazil, Worldpay reports that lack of mobile optimization of shopping websites is cited in the top three reasons for not shopping online via a mobile.

Decreasing your site’s load speed matters for attracting, acquiring, and keeping mobile e-commerce customers. Mobile app developer Skilled notes that 64 % of smartphone users expect mobile pages to load in less than 4 seconds. They’ve also found that 79 % of customers who are dissatisfied with a site’s performance are less likely to buy from that site again. Successful mobile optimization also includes seamless payment methods. Mobile consumers do not want to pull out a credit or debit card whenever they want to make a purchase, but they will store their credit card information on their mobile devices. This means acceptance of Android Pay, Apple Pay, and PayPal are a must for keeping abandoned cart rates down.

Customer communication is also key to growing global mobile commerce trust. Letting the mobile consumer know the status of their shipment – from fulfilment to delivery – also helps grow global e-commerce trust. You also need to attract the mobile shopper in the first place. Google has 96 % of all mobile search traffic, meaning your site must be up to speed with all its algorithm updates and changes.

In conclusion, the days of offering your customer the most seamless desktop experience is not over. However, it’s more than high time to focus on the mobile experience as well.

At this year’s Shoptalk conference, 8 000 participants and I had gathered to listen to major retail companies, startups and disruptors, and were ready to be blown away with inspiration. I’m used to smaller events with only a few thousand participants, and so this conference felt quite huge for me.

The key buzzwords during the conference were augmented intelligence (especially voice commerce), consumer empowerment, and culture. Let me tell you why – in a time where technology develops faster than you can say “disruption”, it’s important to understand how it can affect your company.

Technology as a facilitator and to enhance experiences

Ebay was one of the businesses talking about the importance of artificial intelligence. How they use data, deep learning and machine learning to enhance consumer experiences. One example is how they help sellers on Ebay to choose boxes for their goods through augmented reality; another is helping consumers through visual search in their database with deep learning. Everything they do and invest in will of course reduce the friction of selling or shopping on Ebay, and to create a positive shopping experience.

using augmented reality headset for e-commerce and shoppingHouzz also works with augmented reality to enhance the experience, but is much more than that. It’s a platform to combine consumers with the right handyman and products, and they have become a close friend to the renovating consumer. For example, they allow their customers to access millions of 3D products in their homes. They also work with deep learning on their marketplace to categorize products.

Nike said that technology is right when it helps or serves customers. They combine the technology with communities (more about this in part 2 of this article in June), where they use artificial intelligence to match your running shoes with your running style (through Nike +, among others). Nike knows if you run a lot in the evening, are a skilled runner or run a lot on concrete roads and recommend shoes for that.

Deep dive voice commerce

Voice search will change how we consume in the future – there’s no doubt about it listening to both Google and Amazon, among others. During one of Google’s presentations, they pointed out three things that retailers need to think about today when it comes to voice.

The first thing was that voice search/recognition is ubiquitous. Whether it is on the mobile phone, the Google assistants, smart watches, etc., and whether you use it while driving, while running or when you cook dinner. The second is that it’s natural – it’s much easier to ask a question aloud rather than writing it. And it’s much faster as well.

The third thing is that it will of course be more than voice. Voice searches applies especially to items we may not always need to see, such as help in the kitchen, information about meetings, routes, shopping lists, etc., but it will not just be a voice. Visual search is also growing and is becoming simpler and more refined. Visual search enables shopping everywhere, and can be applied to products when we do not know what they are called or where they can be found. In other words, there will be a combination of voice and visual search in future e-commerce.

This is the first part in a two-part series about Shoptalk. Part two will be published 6 June.

Carin Blom, ecommerce expert and retail analyst at PostNord