How COVID-19 has impulsed the development of e-commerce in Latin America
With the decision to carry out a global quarantine due to the arrival of COVID-19, the traditional market had to adapt quickly because, due to social distancing measures, customers could not go to stores as usual.
This problem represented enormous losses for many and the closure of thousands of businesses around the world. At the same time, this situation became an excellent opportunity for various sectors, adapting to new technologies to massify their sales. In other words: they consolidated their market within the E-Commerce universe.
E-Commerce in Latin America
Before the COVID-19 pandemic, Latin America was no stranger to E-Commerce, being, in fact, the favorite way for many users to purchase various products or services, so what changed?
Although there was a continually evolving online market, it quickly massified to adapt to new needs: people still need to buy products but cannot leave their homes.
For current consumers, buying online is a practical, safe and fast experience to meet their needs without having to leave their homes, and without having to adapt to any specific schedule, which adds a quality to E-Commerce of comfort.
Many companies had not taken measures regarding their businesses’ digitization, considering it complicated or unnecessary, fortunately, with this new global paradigm. Mass online migration is now also more straightforward thanks to options such as WooCommerce, a plugin for E-Commerce integrated to WordPress (The most used CMS to create web pages). WooCommerce is very simple to use, customize, and allows the creation of practically unlimited catalogs.
The massification of electronic commerce in Latin America
Although many might think that this trend will end at the end of the global quarantine for COVID-19, it seems unlikely. The numbers speak for themselves: ecommerce sales increased to more than 26% in Latin America alone (and more than 400% in the first 100 days of quarantine in Peru), and continue to grow.
The brands that manage to adapt to this accelerated digital transformation will undoubtedly set the trends for the market in the future, in addition to having every chance of capitalizing on this market by successfully establishing themselves in the midst of this global situation.
This is because users learned, in this scenario, that e-commerce is safe and reliable, and that the purchase processes turn out to be very easy, intuitive and practical, without forgetting all the comfort they offer by not having to move or carry out purchases within a set time.
In this regard, VTEX North General Manager of Latin America, Santiago Naranjo, assured that “Before the appearance of Covid-19, an average person bought from two online sites a month, with the pandemic, this figure immediately shot up to six or seven websites, leading to an average of 80% of household purchases through these channels”.
The challenges of E-Commerce in Latin America
E-Commerce advanced several years of growth during the pandemic; for example, in Mexico, this market accelerated until reaching the levels that were projected to three years, while in Colombia, this growth was advanced five years.
However, although everything sounds beautiful (and it is), there are also critical challenges to consider so that this business model is adopted as a global standard. One of these challenges is investing in automation software, which allows keeping inventories reflected in E-Commerce up-to-date.
An error in this parameter could produce all kinds of problems, from economic losses to loss of customers, the latter being a crucial factor since Ecommerce depends on online reputation to sell products and reach new customers.
Likewise, there are other risks concerning supply chains, since they require different logistics from the product’s production to its storage, packaging, and delivery to the customer. With all these factors, it is necessary to be vigilant to minimize errors and failures.
Finally, payment platforms must be constantly watched and secured to avoid identity theft problems, commercial fraud, or theft of financial data from customers, which is the greatest fear of many.
However, by taking specific measures to avoid these problems, and keeping the company updated continuously concerning technological advances and security, these situations can be avoided.
And these measures are necessary because e-commerce is here to stay, and only those who manage to adapt to this new way of doing business will be able to survive in the immediate future.