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Innovation in payment methods
The LATAM population is significantly connected to its mobile devices and the region has seen great advancements and adoption of digital and alternative payment methods. Pix, the Brazilian instant payment system, has lead the charge for payment innovation and as of December had 158M active users, 4B+ transactions recorded, and has generated $326M (USD) in volume (Source: Banco Central).
A population with mobile devices and payments now at their fingertips is a population that can experience ecommerce - which has contributed to the explosive growth of digital channels in the region. Regional and global brands should continue to treat LATAM as an opportunity for investment as ecommerce penetration continues to grow and marketplaces continue to innovate and offer more robust digital media capabilities.
Social Media & Social Commerce
LATAM consumers are avid users of social media, and making purchases via social media is a natural occurrence. It’s common for brands to build out virtual storefronts across social apps rather than directing consumers to make purchases within a marketplace, creating room for the creator economy to grow as well
We’re seeing a significant influence on the region from Chinese influencers, prompting adoption of livestreaming and excitement for live commerce and content.
Brands should be aware of this dynamic and understand that social platforms provide shoppers with sources of truth and serve as a product-researching resource filled with valuable consumer insights that can be used to inform broader digital strategies.
Marketplace Growth
The growth of marketplaces such as Mercado Libre is no surprise considering the advancements in payment methods in the region combined with a mobile-driven population. We predict ecommerce sales in the region to exceed $206B (USD) by 2028, with pureplay 3P as the channel with the most expected growth (Flywheel Retail Insights).
Amazon is also prominent across the region, and brands need to develop multi-channel strategies specific to the different retailers and marketplaces. The marketplaces are taking advantage of the opportunity of retail media which means that brands need to be on top of developing comprehensive strategies that help reach consumers in ways not previously available to these brands.
Brands that are aware of these defining trends and work in investing in and embracing them will reap the rewards of the booming region.
