Ecommerce in Latin America: Growing by Leaps and Bounds
Estimated reading time: 6 min
Do you have a growing ecommerce business? You've surely experienced the evolution the sector has been going through; but do you know how this industry has positioned itself in Latin America? Below we present the data, figures, and most relevant aspects of the sector you operate in, considering among other factors the increase in online shoppers, the share of ecommerce vs. retail, and the impact of COVID, a phenomenon that Latin America and the world will surely not forget.
At its best moment! That's how the stage ecommerce in Latin America is going through can be described. With accelerated growth, it is considered one of the most dynamic sectors in the region, a behavior driven mainly by the pandemic and the shift in habits it produced among shoppers, combined with the high number of internet connections, which according to ECLAC studies reached 74% by 2020, a figure that, although lower than North America (88%) or Western Europe (92%), reflects significant progress that today makes Latin America a territory with more people interacting online and generating a greater number of buying and selling transactions.
From selling more to operating better: the invisible challenge of growth
One of the most common mistakes in ecommerce is assuming that selling more always means growing better. In Latin America, many brands discovered during the pandemic that the increase in orders also multiplied operational complexity.
More orders mean more inventory control, more coordination with carriers, more incidents, and more pressure on internal teams. Without a solid logistics operation, growth turns into chaos.
The companies that have managed to consolidate in the region are those that understood in time that logistics is not a cost, but a competitive advantage. Outsourcing processes such as storage, order preparation, and shipping allows teams to focus on what truly drives the business: sales, brand, and customer.
8 TIMES what we still need to grow in LATAM to match the ecommerce penetration in retail of giants like China
According to Statista studies (a firm specialized in market and consumer data), over recent years Latin America has experienced progressive growth in ecommerce shoppers, recording a total increase of 23 points between 2019 and 2020 (267 million shoppers in the latter year), 55% more than the global average, which for the same period stood at a total of 15 points. By 2024, the number of people buying products and services online is expected to grow 31% more, reaching 351 million users across the region.
The above behavior saw its greatest acceleration as a result of the confinement measures generated by COVID, which kept consumers away from traditional in-person shopping, accelerating digital transformation and the positioning of ecommerce.
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During 2020, Latin America was the second region in the world with the highest ecommerce growth, something very positive for companies with digital channels! Sales revenue through technology platforms grew 30.6% compared to 2019, representing revenue worth USD 83.630 billion. The top region in sales growth was (1) North America with 33.5%; in third and fourth place were (3) Western Europe and (4) Asia-Pacific with 11% and 6.1% respectively.
If we analyze the above data a bit further, we can make a better comparison between the two regions with the highest growth; when we do, we see that during 2020 sales in North America (USD 749.000 billion) were 9 times greater than those in Latin America (USD 83.630 billion), which is not attributed to population size in each region, since North America has a smaller number of inhabitants, but to other causes such as internet penetration, which in the Latin American case is 14 percentage points lower (88% vs. 74%), as well as a lack of development in technological infrastructure, population banking, and last-mile logistics, which years ago showed greater delays in Latin America, slowing the development of this sector; to the above is also added the cultural factor and the lack of trust among shoppers toward payment gateways and ecommerce pages due to fear of fraud, which has been a decisive point in online shopping and an aspect that has undoubtedly been improving over recent years. As for average annual per capita spending, during 2020 it was USD 132 in Latin America and USD 2,080 in the North American case for the same period.
As an important data point within this global landscape, China's presence stands out. Did you know it is the largest and fastest-growing ecommerce market in the world? Its sales reached USD 826.600 billion during 2019 and approximately USD 990.000 billion in 2020; the Asian country records sales 1.3 times greater than all of North America and 11.8 times greater than those of Latin America, impressive! Without a doubt, we are facing an online commerce giant from which we can learn many lessons for our region about best practices in ecommerce. In 2020, online sales accounted for 44.8% of the country's total retail sales, a figure that for 2021 was expected to reach 52.1%, for the first time in world history, the majority of a country's sales will be made through the digital channel!
Now we present our Top 5: Leading ecommerce economies in the region
Among the most representative ecommerce countries, we'll talk about those that reported the best growth indices in sales, as well as the characteristics that placed them in this top 5:
Top 1: As the largest ecommerce market in Latin America we find Brazil, which during 2019 reported USD 27.000 billion in sales. For 2020, it was the country that grew the most in the number of online shoppers, registering 7.3 million new consumers who made their first purchase through online commerce during the pandemic; as a result, the percentage of purchases through ecommerce grew 60.9%, while the penetration of online sales in total retail sales was 8% in the land of samba.
Top 2: In second place in our top we find Mexico, with a total of USD 22.000 billion during 2019 and 316 billion Mexican pesos in online sales during 2020, one of the countries with the greatest evolution in this field. Compared to 2019, purchases made by Mexicans through the ecommerce channel grew 81% during 2020, representing 9% of total retail sales generated in the country, as revealed by the Online Sales Study conducted by AMVO.
Other representative figures indicate that 2 out of every 10 ecommerce companies had expansion of more than 300% in 2020. For the current year, it is projected that in 19% of companies in the sector in Mexico, online sales will represent more than 30% of their total sales (AMVO).
Top 3: Continuing on the list, Argentina ranks third in growth; during 2019 online purchases generated USD 8.000 billion for the country, which translated to 1.9% of the nation's GDP. According to estimates from the Argentine Chamber of Electronic Commerce, in the South American country, around 1.3 million people started shopping online during 2020, representing 39% growth for its ecommerce channel during this period, where its sales accounted for 3.6% of all retail sales.
Top 4: In this position we find Colombia, which for 2019 registered a total of USD 7.000 billion in sales, representing 2.27% of its GDP. For Colombians, ecommerce became a key tool for household supply. As for 2020, online sales grew 53%, a quite positive figure considering that during the same period, traditional commerce had a 6% decline in sales according to estimates from the Colombian Chamber of Electronic Commerce. As for ecommerce vs. retail penetration in 2020, it is 2% according to Dane data.
Top 5: Chile is the fifth largest ecommerce market in Latin America; its sales for 2019 reached USD 6.000 billion, representing 37% growth compared to the previous year according to data from the Santiago Chamber of Commerce, which represents 2% of its GDP. For 2020, the Chilean region recorded 45.6% growth in sales made through the online channel and a penetration of online sales over retail of 11%.
Other figures you'll find interesting
- In 2019, online sales represented 4.4% of total retail commerce in Latin America, a figure that rose to 5.6% for 2020. For 2021 it is estimated to reach a share of 6.2% and for 2023 of 7.1%.
- As for Europe, approximately 12.5% of retail sales were generated online during 2020.
- Worldwide, online sales in 2020 represented 18% of retail sales.
Good results continue for LATAM
2021 has required ecommerce companies to maintain an accelerated pace of maturity in areas such as the digital component, increased consumer trust, and consolidation of omnichannel strategies, seeking to face the growth being recorded, which according to economic projections was not expected to be reached for another 5 or 10 years.
According to data from Insider Intelligence and eMarketer, during 2021, 3 Latin American countries entered the ranking of those with the highest growth worldwide, placing within the top 5 on the list; thus Brazil (2nd place), Argentina (4th place), and Mexico (5th place) are part of this top 10, with growth of 26.8%, 26%, and 21.1% respectively.
Wrapping up the journey
After learning the figures and characteristics of ecommerce in Latin America, the sector's rapid evolution is notable, and although there is still a long way to go compared to the results of economies in regions such as Western Europe or Asia, we cannot overlook the excellent progress Latin America has made, the growth of companies in this industry, and the millions of new consumers who today use online shopping to acquire their products and services; results that are expected to endure and continue improving after the pandemic.
The above represents an important challenge and opportunity for companies in the sector to keep evolving and enhancing their customer service, a scenario in which process optimization and strategic alliances with experts in fields such as fulfillment will be fundamental in aspects such as product storage, inventory control, reduced delivery times, process visibility, and of course, end customer satisfaction, the main consumer of online sales.
Is your online store prepared to be a relevant player in this field and meet sales demand? The challenges that growth entails are many; in the Latin American case, aspects such as the lack of banking access, building trust and credibility toward ecommerce so users can shop with peace of mind, building online stores on agile platforms that support demand, as well as optimizing the logistics process (from when the sale is generated until the product is delivered to the end user), without affecting business profitability, are some of the main challenges the sector faces. Ecommerce requires planning, strategy, and infrastructure to have a successful and scalable operation in the long term.
The evolution of ecommerce in Latin America also demands greater investment in logistics infrastructure. Having a partner in fulfillment in Guadalajara or in other key cities helps online stores respond to growing demand with faster deliveries, real-time inventory control, and a higher level of customer satisfaction.
Looking for a partner to help you improve your delivery process, boost your fulfillment, and your customers' satisfaction? Don't hesitate to contact us; we are the best fulfillment center for ecommerce in Mexico and Colombia, you just have to click here.
Information sources:
Industry Report: E-commerce in Mexico 2020 Blacksip / "Industry report: e-commerce in Colombia 2020". Blacksip / Studies conducted by Statista / Studies conducted by eMarketer / Studies conducted by Euromonitor / Online sales study 2021 AMVO / Internet MX Association
Iproup Statista Statista Statista Trendtic Statista Statista IMT Emarketer Marketing4ecommerce Statista America Retail Statista Statista Marketing4ecommerce Elpais Marketing4ecommerce
Preguntas Frecuentes (FAQs)
Latin America is experiencing one of its best moments in ecommerce, with accelerated growth driven by the pandemic, increased internet penetration (74% by 2020), and a shift in consumer habits. Online sales represented 5.6% of total retail in 2020, up from 4.4% in 2019, with projections reaching 7.1% by 2023.
COVID-19 confinement measures kept consumers away from in-person shopping and accelerated digital transformation. Between 2019 and 2020, Latin America added 23 points in ecommerce shoppers (267 million total), 55% above the global average of 15 points. In 2020, LATAM was the second-fastest-growing ecommerce region in the world with 30.6% sales growth.
The top 5 ecommerce economies in the region are: Brazil (largest market, USD 27B in 2019), Mexico (USD 22B in 2019, 81% growth in 2020), Argentina (USD 8B in 2019), Colombia (USD 7B in 2019, 53% online growth in 2020), and Chile (USD 6B in 2019, 11% online retail penetration in 2020).
In 2020, North American ecommerce sales (USD 749B) were 9 times those of Latin America (USD 83.6B), despite having fewer inhabitants. China's ecommerce sales were 11.8 times those of LATAM, with online channels accounting for 44.8% of retail in 2020. Average annual per capita spending was USD 132 in LATAM vs. USD 2,080 in North America.
Many brands learned during the pandemic that more orders multiply operational complexity. Without solid logistics, growth becomes chaos. Companies that consolidated in the region understood that logistics is not a cost but a competitive advantage. Outsourcing storage, order preparation, and shipping lets teams focus on sales, brand, and customer experience.
Key challenges include lower internet penetration compared to North America (74% vs. 88%), limited banking access, consumer distrust of payment gateways, underdeveloped last-mile logistics infrastructure, and the need to build agile online platforms that support growing demand without hurting profitability.
Strategic fulfillment partnerships enable faster deliveries, real-time inventory control, and higher customer satisfaction. Outsourcing to experts in fields like fulfillment supports product storage, inventory management, reduced delivery times, and process visibility, allowing brands to meet growing demand with a scalable, profitable operation.
