The Americas run the gamut with e-commerce, from the massive market in the U.S., to a still-lagging Canada, and a mixed situation in Latin America. Of course, comparing a mix of countries in Central and South America to only two in North America – and two very stable markets, at that – might seem misleading. But room for e-commerce growth in Latin America is big, and 2016 could be the year it really opens up.
U.S. still the e-commerce leader
Not surprisingly, the U.S. is still the worldwide leader in e-commerce sales. Predictions put 2016 sales at $555 billion, up from $492 billion in 2015.
The biggest development will be in the area of m-commerce, or mobile commerce. America has lagged in m-commerce uptake, but improved mobile device shopping functionalities – and the amount of retailers looking to mobile to boost sales and make it easy for shoppers to buy – means that m-commerce will see a rapid uptake. Forrester Research has predicted that U.S. m-commerce will hit $142 billion in 2016. Amazon and eBay combined account for 30% of U.S. m-commerce.
A good deal of this activity is driven by Millennials, who use shopping apps more than any other generation.
Canada catching up?
In Canada, e-commerce has been slow to catch on – it accounts for only three percent of the country’s total retail spending. Which is ironic, because some of the biggest digital shopping platforms are headquartered in Canada, like Shopify and ShopLocket, to name two. But Canadians, frustrated with online shopping experiences – some Canadian retailers don’t have e-commerce capabilities at all – will often digitally turn to the south when shopping online and order from U.S. websites.
But that’s changing. In person and online, Canadians are shopping close to home, citing the exchange rate and desire to buy Canadian. Plus Canadian retailers are finally getting their e-commerce act together, launching shopper friendly e-commerce sites and making shipping and returns simple.
A mixed scene in Latin America
The middle class is rising in many Latin American countries, particularly in Brazil. The consumers with disposable income are there, but they’re not spending it online. E-commerce in Latin America is the third lowest in the world, topping only Africa and the Middle East. Brazil’s shoppers spent about $20 billion online this year, the biggest e-commerce market in Latin America. Compare that with e-commerce in Mexico and Argentina, which come in second and third in the region, with $5.7 billion and $5 billion, respectively.
The reason for this lag can be summed up in one word: security. Specifically, given the lack of a secure financial and delivery infrastructure, many still pay with cash.
But there are upsides. For example, Mexico has a high level of smartphone usage, which is growing. Brazil is the most populous country in the region and has the most established e-commerce market (it’s the tenth biggest e-commerce market globally). The majority of Brazilian adults have bank accounts. Brazilians, especially the younger generations, spend a lot of time online. On the other hand, taxes and importing are complex and expensive.
In what could be a signal for other international e-commerce retailers to launch operations in Mexico, last summer Amazon opened a Mexican e-commerce site. Before this, shoppers in Mexico could buy only Kindle e-books from Amazon.
Argentina, Chile, and Colombia have growing e-commerce markets. Argentina, in particular, is hot on Mexico’s heels and will possibly pass it in 2016 if it fulfills the 38% predicted growth rate for e-commerce (compared with 26% for Mexico).
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