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January 25, 2023
The smart way to sell online in Latin America
Being one of the fastest-growing economies in the world, Latin America is an incredibly attractive destination for millions of brands and retailers. Thanks to the massive adoption of smartphones, and almost total access to the internet, the eCommerce market in Latin America has grown outrageously.
Forecasts call for the number of online shoppers to increase from 172 to 435 million by 2031. In addition, buyer spending is expected to increase by 350% in the same period. Moreover, eCommerce revenue is expected to grow by 30% each year until 2025, surpassing 160 billion USD in sales.
Still, doing business in Latin America is not an easy task for some retailers. Most sellers encounter several challenges when they start planning to sell cross-border. For instance, dealing with customs, opening a legal entity, and taking care of cancellations and returns, could be the worst nightmare, and the biggest impediment to start selling crossborder in Latin America.
On the bright side of the story, there is an easy alternative for sellers to enter the LatAm market without having to deal with those barriers. Keep reading to discover how.
A promising region to increase sales
Unlike other regions which only have a dominant marketplace, eCommerce in Latin America is constantly evolving and highly fragmented, with multiple platforms competing on a level playing field. Moreover, sellers who offer their products through more than one online channel have up to 35% more sales than those who only rely on a single platform.
Latin America has the widest network of online marketplaces. Some of the most-established players include Mercado Libre, Amazon, Americanas, Casas Bahia, and Extra.
Founded in 1999, Mercado Libre is present in 18 countries and leads the eCommerce market in Latin America. Today, Mercado Libre has more than 668 million visits per month. Since its creation, it remains a pure-play online marketplace with no sales of its own.
Despite being the second largest marketplace in the region, Amazon is gaining a lot of popularity in Brazil and Mexico, reaching over 164 million monthly visitors. It has over eleven fulfillment centers in Brazil and almost 1000 cities have access to two-day deliveries.
Americanas is next on the ranking, with over 130 million monthly visitors. In 2006, Americanas, Submarino, and Shoptime merged to create B2W - the largest online Brazilian eCommerce group. Americanas has over 40 million different products from a wide range of categories, such as electronics & media, toys & games, furniture, and appliances.
Last but not least, the second-largest eCommerce group in Latin America is Via Varejo. Via varejo is formed by 3 Brazilian marketplaces: Casas Bahia, Extra, and Ponto. Total visits sum up to 130 million, where 64% of those visits come from Casas Bahia. The total marketplace GMV for 2020 was 624 million USD.
Main Challenges of Selling Online in Latin America
Despite its great appeal, selling in Latin America can prove to be a daunting task.
First, last-mile deliveries last longer and are risker. Most logistics providers still do things the old way. They use phones to communicate with customers, decide the route using a map, and they register the movement of goods manually. These types of companies account for nearly 60% of last-mile deliveries in Mexico, Argentina, and Colombia. Traditional express carriers like FedEx or DHL may be better at delivering on time, but their high delivery costs will prevent your products to compete in marketplaces.
Second, customs regulations vary from country to country and the movement of products is heavily regulated. Retailers often face long custom clearance times, inconsistent interpretation of customs regulations, and subjective customs inspectors. An average import takes 8.5 days in Latin America. This is 1 day longer than the world average of 7.5 and 4 days longer than the OECD average of 4.6.
Most of the time, customs authorities may not allow your products to enter the country if the price or weight is above a certain threshold. In Brazil, for example, if your products weigh more than 30 kg or cost more than 50 USD, you must pay a 60% tax rate.
Another nightmare for cross-border sellers are the cancellations and returns. Consumer protection laws are quite strong in Latin America. Buyers have the right to cancel their purchase and receive a full refund up to seven days upon receiving the product in Brazil, or up to ten days in Argentina. Since most sellers can’t afford the reverse logistics necessary to send canceled items back to their home country, they usually dispose of these products.
Moreover, to remain liable to marketplaces you might be asked to open a legal entity in the country you are offering your products to. Latin American countries always have minimum statutory requirements that must be met by all firms, which involve additional costs. Some of the requirements include designating a legal representative, establishing a fiscal address, and issuing monthly and annual tax declarations.
The smartest way to sell online in Latin America
We know how overwhelming it can be for global sellers to start doing business in other countries.
Several challenges such as the creation of a legal entity, or staying compliant with regulations, prevent sellers from selling cross-border. Not to mention the complexity of understanding local consumer preferences and delivering effective marketing campaigns to win the buybox and maximize sales.
Luckily, there is a solution to avoid doing all of this. No matter the number of SKUs or the size of your business, with nocnoc’s mega-stores, global sellers become TOP sellers from day one. Your products will gain maximum exposure and get the highest conversion rates.
It's easy. By enrolling on our Seller Center and uploading your product catalog, you can start selling in 15 attractive marketplaces in 48 hrs, at no cost.
Our local experts are committed to helping sellers increase their sales in Latin America. They understand the LatAm market and know how to target consumers with products that they want, at the right prices, with successful marketing campaigns.
Not only do we offer customer support in Spanish and Portuguese, but also we provide a 360° service that includes pre-purchase, post-purchase, custom clearances, returns, and cancellations, which Latin American customers already recognize and prefer. All of this has led to hundreds of positive reviews.
Be part of nocnoc’s mega stores and start selling in Latin America with no investment needed. Sign up today.
Do you still have questions? Contact us today.
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