- The largest increases in index scores were noted for some developing countries;
- 7.3 million Brazilians shopped online for the first time in 2020.
As seen globally, the COVID-19 pandemic boosted online shopping in Latin America. Brazil rose ten positions and was in 62nd place at UNCTAD (United Nations Conference on Trade and Development)’s B2C e-commerce index, which ranks 152 countries on their readiness to engage in online commerce.
The largest increases in the index scores were noted for some developing countries. The top four were Algeria, Ghana, Brazil and Lao PDR, which all saw their scores surge by at least five points largely due to significant improvements in postal reliability, says the report.
Countries are scored on access to secure internet servers, reliability of postal services and infrastructure, and the portion of their population that uses the internet and has an account with a financial institution or a provider of mobile money services.
According to the report, some LAC (Latin America and the Caribbean) countries have a higher level of shopping than their B2C e-commerce index value would predict.
These include some of the largest markets in the region (such as Brazil, Mexico, Argentina and Chile). This suggests that, in addition to the main drivers incorporated in the index, scale economies such as the size of the e-commerce market also influence online shopping penetration.
Countries with a relatively large amount of online shoppers are likelier to attract a higher number of e-commerce shops, providing more buying options and thus encouraging take up of online shopping, says the report.
Due to the pandemic, 7.3 million Brazilians shopped online for the first time in 2020. And in Argentina, the number of first-time online buyers during the pandemic was equivalent to 30% of the 2019 online shopping base.
The UNCTAD report notes that five countries account for 92% of online shoppers in LAC, much higher than their share (72%) of the region’s population. Postal unreliability is the region’s biggest e-commerce infrastructural weakness, particularly in the Caribbean.
Brazil, Mexico, Argentina, Chile and Colombia: 90% of online shoppers
Only a few statistical offices in the region yet publish value data on e-commerce. According to UNCTAD, e-commerce associations, chambers of commerce and market research organizations are plugging the gap by compiling B2C value data for the five biggest markets (in decreasing order Brazil, Mexico, Argentina, Chile and Colombia), accounting for over 90% of online shoppers in LAC.
Although the data are not strictly comparable due to different
methodologies, they provide insight into the growth and size of the region’s B2C e-commerce market.
The top five LAC markets generated estimated B2C e-commerce sales of $71 billion in 2019, up 13.4 per cent in US dollar terms from the previous year and equivalent to 1.7% of GDP, compared to over 5% globally.
It is estimated that the remaining countries generated around $2 billion of e-commerce sales in 2019. LAC accounted for an estimated 1.4% of global B2C sales in 2018, well below its population share of 9%.
One notable aspect for the larger LAC countries is the presence of regional e-commerce sites competing with major global companies. Four of the five most visited e-commerce shops in Latin America are from within the region. With almost 900 million site visits per month, GMV for the four largest LAC-based companies was $21 billion in 2019, up 11.5% from the previous year.
According to the report, Europe remains by far the most prepared region for e-commerce. For the first time, Switzerland leads the ranking, just ahead of the Netherlands. In 2019, 97% of the Swiss population used the internet. The only non-European economies among the top 10 are Singapore, ranked fourth, and Hong Kong (China) in the 10th position.