Dynamics of E-Commerce in Latin America 2023–2026

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    Impactful data directly from The 2023 Latin America E-commerce Blueprint, an in-depth report on E-commerce in Latin America that includes a snapshot of e-commerce and digital development in Latin America, with data about top used payment methods, volume and market share, cross-border purchases, real-time payment schemes, and much more.

    The Latin America E-commerce Blueprint 2023

    The most detailed free report on Latin America e-commerce, with forecasts to 2026.

    The booming e-commerce growth in Latin America makes having at hand a list of accurate and reliable data on the real performance of e-commerce in the region a must.

    The 2023 Latin America E-commerce Blueprint is an annual update for 2023 that compiles data on 15 Latin American markets under a standardized methodology in order to compare and cross-reference e-commerce data.

    These data are researched and collected by the consulting firm Payments and Commerce Market Intelligence (PCMI), serving major payments companies worldwide. The data can be used to highlight and analyze the most sensitive e-commerce market opportunities for Latin America.

    Below we present the main findings from the Latin America E-commerce Blueprint, 2023 standard version, by PCMI. Ask for the hundreds of exclusive data points in the extended version.

    State of Digitization and E-commerce in Latin America

    Latin American e-commerce saw a peak of growth in 2022, equivalent to 39%, a delayed response to the mass digitization of 2020–2021 brought about by the pandemic. E-commerce in Latin America will continue to grow with levels above 20% per year.

    The main vertical of e-commerce in Latin America is retail trade, leading with a 53% market share in 2023. However, retail is the second-best vertical in terms of growth, having been overtaken by the emergence of new ways to digitize payment verticals, including taxes, education, bill payments, government services, and, more recently, casinos, particularly in Brazil and Colombia. These items are grouped as “Others” in The Latin America E-commerce Blueprint and their forecasted growth is 30% for the next few years.

    In The Latin America E-commerce Blueprint, PCMI estimates that e-commerce expansion in Latin America in 2023 will reach 66% of the adult population. In turn, 71% of adults in Latin America have financial accounts.

    In the economies of Mexico and Peru, however, cash payments are still significant. This is to be expected as they have the lowest financial penetration in Latin America, at 58% and 54%, respectively.

    The Latin America E-commerce Blueprint also mentions the markets with the highest growth in Latin America, which in the 2023 to 2026 period would be Peru, Mexico, Paraguay, and Colombia. Brazil, despite being the largest e-commerce market in Latin America, is trending lowest in terms of growth.

    Electronic Commerce in LatAm: Growth Fueled by Digital Wallets and Real-Time Payments

    According to PCMI’s Latin America E-commerce Blueprint, Latin American online buyers are looking for simplicity and flexibility, which has led to an evolution toward non-intermediated transfers for making payments and the inevitable rise of multi-rail platforms.” That said, payment methods that are currently dedicated solely to the movement of money are losing ground compared to the more modern digital wallets, which let users store their payment credentials and make real-time bank transfers, among other value-added services.

    The case of Pix in Brazil is particularly impressive. Pix, a real-time payments network developed by the Central Bank, has managed to gain a 16% market share across Latin America for e-commerce volume in 2023. PCMI analyses show Pix is stripping market share away from debit cards, which had a lower transaction volume during the first quarter of 2023, while conversely Pix’s increased. Payments to businesses (P2B payments) with Pix are increasingly representative; in fact, it is estimated that 70% of businesses in Brazil now accept this payment method.

    Brazil, Colombia, Costa Rica, Bolivia, and Mexico will take the lead in real-time payments (RTP) for e-commerce in the coming years.

    In Colombia, for example, the Central Bank’s Immediate Payments System will improve based on the current PSE (secure electronic transaction) method. And in Costa Rica, the Central Bank is already working to enable the SINPE (national electronic payments system) throughout Central America.

    Despite this, we should note that cards are still the leading e-commerce payment method in Latin America, especially in countries with less developed online sales, such as Ecuador or Panama. In these markets, the low development of alternative payment methods suggests limited access to e-commerce, becoming available only to people in the highest income brackets. By contrast, markets like Colombia and Brazil, with a more mature e-commerce, have a greater variety of alternative payment methods, allowing them to achieve a wider customer base among different socioeconomic levels.

    Why are cards still leading? According to PCMI, cards continue to be the most widely accepted method by merchants. In addition, cards allow for payment in installments, which happens in one out of every two purchases with cards. Lastly, they offer relatively low friction thanks to tokenization, one-click payment, and recurring payments.

    The Dynamics of Marketplaces and Platforms in Latin American E-Commerce

    Retail is the most widely exploited segment of e-commerce in Latin America, with an estimated market volume of US$272 billion in 2023, according to PCMI.

    This vertical has been dominated by a handful of retailers, like Mercado Libre, Liverpool, and Falabella, which have delivered to the highest number of Latin American e-commerce shoppers. What is most impressive is how these large retailers have transformed and adapted to consumers and small businesses, broadening their offer to include their own payment and loyalty apps, credit offers, improved last-mile logistics, and other forms of service optimization.

    Cross-Border Potential of Latin American E-Commerce

    Latin American cross-border e-commerce is growing at a much higher rate than domestic e-commerce. According to the Latin America E-commerce Blueprint,the growth of international e-commerce appears to be driven by:

    • Acceptance of alternative payment methods, like Pix, by international payment providers
    • A growing number of cross-border payment providers focusing on Latin America, at the business level
    • Cross-border payment facilitators that are expanding their offer to new markets beyond Brazil and Mexico
    • The growth of digital verticals, particularly SaaS, streaming, video games, casinos, and crypto
    • Saturation of domestic e-commerce in markets like Brazil

    Learn more in The Latin America E-commerce Blueprint 2023

    Read the standard version of The Latin America E-commerce Blueprint 2023, which includes much more information than this article presents.

    The Latin America E-commerce Blueprint 2023

    The most detailed free report on Latin America e-commerce, with forecasts to 2026.

    You can also request the extended version of the Blueprint, containing detailed visualizations of:

    • The most widely used payment methods in e-commerce, from credit cards to BNPL, for each country.
    • Devices used for electronic purchases: computers or mobiles, for each country.
    • Volume of domestic e-commerce vs. cross-border/international e-commerce, for each country.
    • Payment methods in streaming and video game verticals, across the region
    • A ranking of top digital wallets in Latin America and the estimated number of users

    The  2023 [Extended] Latin America E-commerce Blueprint also includes a snapshot of current e-commerce development in each market, with data on payment methods, turnover, and businesses.

    It also includes one hour of professional consulting via telephone with experts from PCMI.

    Write to us for more information.

    Get Even More Data

    While the Blueprint is richly detailed, it’s actually derived from an even richer source: The E-Commerce Data Library. This unique resource not only features in-depth data for 15 of LatAm’s top e-commerce markets, but it’s also customizable according to your needs.

    Click here to learn more about the E-Commerce Data Library.

    We also recommend you to explore our E-commerce Data Portrait of Latin America.

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    Payments and Commerce Market Intelligence (PCMI) is a strategy consultancy specializing in the global payments industry.