Millions of Latin Americans quarantined at home due to the epidemic have gone online shopping, which has reflected huge revenues on e-commerce.
This sales boom pushed small businesses and neighborhood stores to adopt technology or use modern communication tools to protect their customers.
According to the “French”, the Covid-19 epidemic contributed to changing habits and had a decisive role in the flourishing of e-commerce. More than 10 million people in Latin America have never resorted to the Internet for shopping, and they are buying their needs regularly from the Internet, ”says Oscar Silva, an expert in global strategies at KPMG Consulting in Mexico.
With its business model similar to that of Amazon or eBay, available in 18 countries, Mercado Libre is the largest regional e-commerce platform.
And at a time when the Latin American economy was falling apart, sales of the Argentine platform doubled in the second quarter of the year. The number of buyers increased by 45.2%, to reach 51.1 million.
Its capitalization amounted to $ 55 billion, raising the ranks of the Brazilian company “Valais”, the largest company in Latin America.
Oscar Silva says people were afraid of being scammed or that the product would not live up to their expectations. But it is very likely that many buyers will become regular customers after realizing how easy and effective it is to shop online.
David Gissen, director of the Mexican branch of “Mercado Libre”, points out that “loyal users buy within 12 days what they used to buy in the 17 days before the outbreak of the epidemic … And those who were shopping on the Internet from time to time now buy in 29 days.” They buy it in a year.
At the beginning of the general isolation, sales were based in large part on medical masks, antibacterial disinfectants, thermometers, and oxygen meters, but soon they expanded to include other goods and services.
Internet consumer fever, fueled by fear of contagion, has affected very closed economies, such as Cuba, where sales of the online government platform “TwinView” increased.
The expert in “KPMG” points out that several companies went bankrupt because they were not presenting their goods on the Internet or because they were not proficient in working in this field.
He explains that the major platforms are the winners, but some neighborhood companies have succeeded in maintaining their customers or gaining more of them by resorting to simple tools such as WhatsApp.
A promising market
According to the “AppSphere” group, downloads of e-commerce applications increased by 93% in the second quarter of the year in Latin America, led by Brazil and Mexico.
E-commerce in the region’s largest economy rose 56.8% between January and August, with a network of 135,000 new stores playing a key role in stimulating economic recovery, according to the Brazilian E-Commerce Association.
Some governments are seeking to take advantage of this new market to limit the high public expenditures caused by the spread of the Coronavirus.
And the Brazilian Ministry of Economy intends to impose a 0.2% tax on electronic exchanges. In Mexico, the ministry plans to impose taxes on electronic sales.
Modern audiovisual platforms such as “Netflix” will not escape these measures, after the crisis increased their popularity. For example, Ecuador imposed a 12% value-added tax in September. As for the net profits achieved by Netflix at the global level, they increased by 166% in the second quarter, compared to the same period in 2019, to reach $ 720 million.
At a time when unemployment hits millions in Latin America, Sergio Garcia, 60, is optimistic about his future as a delivery agent dealing with one of the e-commerce giants.
“Demand has increased dramatically in light of the spread of the epidemic,” he says. “If the demand doubles at the end of the season, our wages will increase by 50%.”
He earns $ 0.30 for every package he delivers. This is not much, but it is better than what a person makes from any other job, according to Garcia.
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