One of the markets registering the major e-commerce growth worldwide, it’s not by chance that Latin America’s first economy, Brazil, is also the fifth-largest internet and smartphone economy in the world. The country accounts for 236 million mobile subscriptions and 143 million unique mobile subscriptions – and considering that Brazil has currently around 209 million inhabitants – it’s no hard task to uncover the potential of this market.
“Mobile plays a role in the entry of new consumers and in the increase of purchases among already traditional e-commerce consumers,” the Head of Ebit / Nielsen, Ana Szasz, told LABS. With an average growth of 17% in e-commerce during the next three years, according to data from AMI, connectivity is taking the country by storm, making room for new retail strategies to flourish as the sector develops. And setting the stage for these new strategies are, precisely, smartphones.
Hand in hand with this rise of smartphones, not only Brazilians – but Latin Americans as a whole – have been watching social media to play an ever-growing role in their day to day lives. From what they read in the news to the way they shop online – data from marketing Saas company Socialbakers shows that in Mexico, social networks are impacting directly in their decisions, as displayed in the chart below.
Moreover, when the topic is shopping advice, Argentina and Chile follow the same path: while 83% of the respondents in Mexico claimed to have more confidence in digital influencers about recommendations, against 17% that have more trust in TV celebrities; in Argentina and Chile, 73% and 72% of respondents, respectively, declared to also prefer digital influencers over TV celebrities for this kind of recommendation.
Social commerce on the rise
In an interview with LABS, the regional lead for Latin America at Socialbakers, Adrian Bravo, shared some key takeaways regarding what kind of strategies will thrive in social media when it comes to consumer behavior. “2020 will be the year that social commerce takes off, as more and more customers make purchases directly from social media platforms instead of heading to a shopping site’s app or to an online store after discovering a product on social media,” he explained.
This behavior, explains Bravo, is being pushed by trust, as consumers are increasingly seeking out reviews and trusted voices when making purchasing decisions. “Socialbakers data has shown that shopping-related content is rapidly growing on social media –and platforms are responding by adding more e-commerce features. Instagram already launched Instagram Shopping for selected brands, giving businesses an immersive storefront for people to discover and explore products – as well as a link for purchases.”
Making room for a handful of opportunities, the Instagram Shopping tool is a huge example of social commerce’s potential. With the shopping journey built-in the platform, brands have the opportunity of exploring this feature to leverage content that can lead directly to a purchase, in a seamless transaction where consumers interacting with an Instagram post, have the opportunity to buy the product featured in such post without having to pass through another website or page. In other words, more engagement, better conversion rates.
Bravo also revealed that from 2018 up to 2023, Mexico will present the highest growth rate for social commerce in the world, with 26.1% (CAC during the period). “Along with this boost, social commerce has presented a penetration rate of 71% on respondents, almost 50% more than in Europe and North America,” he highlights. “E-commerce platforms such as BigCommerce, WooCommerce, Magenta, and Shopify are more integrated to Social Media in order to seize the opportunity to turn a conversion from an ad assigned to a specific audience. For 2020, Instagram will allow to link shopping and stores directly to Influencers increasing the possibility of conversion.”
The players to watch
It comes as no surprise that Instagram will play a leading role when it comes to trends for social media. Despite having almost 10 years since its foundation, the social network potential is still on the rise – especially when it comes to social commerce. Socialbakers’ CEO Yuval Ben-Itzhak says that the removal of likes – a decision that Instagram has recently made and are currently testing in a few markets – won’t have the power to affect engagement. “Brands will be encouraged to increase content quality and relevance to motivate users to share and/or comment.”
And as for content relevance, Instagram is sparing no effort. Implementing a series of new features, such as the face filters, Facebook’s social media company is increasingly looking for new ways to boost engagement among its users. “Augmented Reality will be a next thing: just like face filters, Instagram will launch background filters to make Stories – and brands and Influencers will use this to enhance branding,” Socialbakers’ CEO further explained.
But not only Instagram will be a big trend in 2020. A younger player has already stepped into the scene, showing a potential that can be easily translated into an impressive number: one billion downloads. “TikTok is the platform to watch in 2020. After hitting one billion downloads in 2019, we can expect it to continue its meteoric rise in 2020 thanks to aggressive marketing campaigns and investment in geographic expansion,” Bravo highlights.
A global hit, especially among Gen Z users, TikTok is a video-sharing social network owned by the Chinese company ByteDance. Launched in 2017 for markets outside of China, the social media platform has been proving to be playing to win – including in Latin America. According to a company’s press release, the region is poised to account for 10% of the app’s total users.
“This social network will encourage the need to develop relevant and good content. Since the company is not monetizing yet, video formats are being encouraged in order to create interaction and relevance. Content marketing is also being highly awarded through visibility,” Socialbakers’ CEO added.