Global eCommerce market will grow at an average of 11% over the next five years with Latin America leading the way, according to new data from leading payments company Worldpay.
Why it matters: Latin American eCommerce market is set to grow at a CAGR of 19% over the next five years, rising from US$59bn today to US$118bn in 2021 – the biggest rise of any region.
The global eCommerce market will grow at an average of 11% over the next five years with Latin America leading the way, according to new data from leading payments company Worldpay.
In its annual Global Payments Report, Worldpay found that the Latin American eCommerce market is set to grow at a CAGR of 19% over the next five years, rising from US$59bn today to US$118bn in 2021 – the biggest rise of any region.
The research also found that the three fastest-growing countries for eCommerce are Colombia, Nigeria, and Argentina. These “CAN countries” are forecast to lead the world with annual rises in eCommerce of 31, 30 and 24% respectively.
Worldpay’s research also examined the growth in mobile commerce, and found that total mCommerce penetration is set to rise from 38% in 2017 to 47% in 2021, driven by increased smartphone ownership and faster mobile networks. Latin America is set to be in the vanguard of mCommerce growth, with Colombia seeing a 64% rise, and 45% in Argentina – putting them in first and fifth position globally.
With its incredibly strong growth in both eCommerce and mCommerce, Argentina provides a fascinating case study that illustrates the rapidly rising Latin America market. In spite of a difficult economic history in recent years, Argentina benefits from an Internet penetration rate of over 80%, and the largest proportion of mobile Internet users of all Latin American countries. The country is now on track to become an eCommerce powerhouse, on par with Brazil as early as 2024.
Strong connectivity is helping to power the Argentinian eCommerce revolution, as the country’s recovery has taken hold thanks to the greater integration with world markets and economic deregulation that followed President Macri’s election in 2015.
Latin America is set to be in the vanguard of mCommerce growth, with Colombia seeing a 64% rise, and 45% in Argentina – putting them in first and fifth position globally.
According to the PEW Research Center, Argentina also benefits from a population with higher spending power and a larger middle class compared to its regional neighbors. These factors help to explain Argentina’s outstanding predicted growth in both eCommerce and mCommerce, and demonstrate the investment and growth opportunities for the world’s retailers and other merchants.
Shane Happach, Chief Executive Officer – Global eCom at Worldpay explained: “No-one can predict the global economic climate over the next five years, but we can be sure that consumer appetite for online and mobile shopping will continue to see extremely strong growth. The rise in smartphone adoption and the continued improvement in mobile networks have important implications for merchants looking to take advantage of an increasingly well-connected middle class with greater disposable income.
“However, it’s important for retailers to understand the idiosyncrasies of each territory. No two markets are the same in terms of the population’s preferred payments methods, and each has different regulatory requirements, mobile penetration and banking practices. That is why it’s so important that merchants do their homework before they invest in new countries to ensure that they make the right strategic decisions.”
“With the right support, however, retailers can seize a unique opportunity to take a lead in these emerging eCommerce markets,” Happach concluded.
Worldpay’s Global Payment Report 2017 report also highlighted how the payments landscape is continuing to fragment, with options such as bank transfers, cash on delivery and pre-paid cards stealing market share from more traditional methods like credit and debit cards. The research found that bank transfers are set to overtake both credit and debit cards as the second most popular global payment method behind e-wallets, adding an additional factor for retailers to consider when planning their eCommerce strategies.