Latin America, led particularly by Brazil, is continuing rapid growth in its online economy, according to a new study by Internet Retailer. And the boom in ecommerce is good news not only for Latin American Internet retailers, but also for some prominent U.S.-based companies as well — especially Amazon.com.
According to the new 2014 edition of the “Latin America 500,” an annual report by ecommerce research and analysis firm Internet Retailer, Latin America, as a whole, remains the world’s second fastest-growing ecommerce market — only trailing behind China. And Brazil is leading the way, thanks to high Internet penetration rates, a booming market for affordable mobile devices, and an increasingly digital culture.
Internet Retailer ranked the top 500 web merchants in Latin America by sales and 128 other data points — like sales growth rates, web traffic, average checkouts, social media prominence, etc. — tracking retailers in 12 of the most digitally active Latin American countries, including Argentina, Bolivia, Brazil, Chile, Colombia, El Salvador, Mexico, Peru, Uruguay, and Venezuela.
The study, released this week, found that the collective web sales of the top 500 merchants in Latin America grew by 23 percent in 2013 to $17.94 billion for the year, growing at a faster rate than ecommerce in the U.S. and Europe.
Amazingly, of those top 500 ecommerce companies, 299 were based in Brazil. “The 2014 FIFA World Cup might be over, but e-commerce eyes the world over are still fixated on Brazil, the country whose online retail sales growth far outpaced that of the U.S. last year, even as overall economic growth rates slowed down in that country,” stated Jack Love, Internet Retailer chairman and publisher, in the firm’s release. In fact, Brazil accounted $11.7 billion — or 44.5 percent of all of the top 500’s total online sales in Latin America. For a sense of scale, that’s more than triple the amount of ecommerce revenue than Mexico and Argentina combined.
With so much growth (and continuing growth potential) in Latin America and especially Brazil, U.S. ecommerce companies have an incredible foreign expansion opportunity located just south of the border, advised Internet Retailer’s Jack Love. “A strong case can be made for U.S. e-retailers to begin their pursuit of global e-commerce opportunities by first going south of their own border, where markets are closer, cultures are familiar and American brands are highly desired.”
Amazon.com doesn’t need to be told that. The company raked in $475 million in web sales in Latin America in 2013, according to the study, a growth in retail of over 140 percent. In fact, the Brazilian-led Latin American market was the fastest growing foreign segment for the Seattle-based retailer in 2013 — outgrowing Amazon’s other ecommerce markets at a rate 3.7 times faster than China, seven times faster than North America, and 8.3 times faster than Amazon in Europe.