Latin America is a region that has a large and growing active online population. However, some e-commerce merchants are still losing money because they underestimate the purchasing power of Latin Americans and do not invest in the region. The data show the importance of exploring the place, especially after the pandemic, which impacted the retail sector and caused Latin America to have the largest growth in e-commerce in the world.
Many groups in society, which were used to shopping only in physical stores, shopped online in 2020, some for the first time. Brands that had good SEO and logistics in place were ready to meet customer demands and saw their revenue grow. However, those who have not yet invested in optimization have had and are struggling to attract the attention of online consumers.
How To Attract Customers Online
The tip for brands that are in this work of conquest is to understand online shoppers, how they search and who they trust. This would be the first step towards developing successful e-commerce SEO strategies in Latin America. And another key point is to align these strategies with the region’s linguistic differences and sociocultural diversities.
Innovation and creativity are also very important at this time, Americanas.com’s e-commerce, for example, innovated with an option to Take it in the Store Today, which emerged as an alternative to social demands. And although e-commerce has changed a lot over the last few years, it is essential to start investing in new strategies soon, because e-commerce is very fragmented and competitive, especially in Brazil.
Data published by Statista in January 2020 showed that there are more than 418 million people online in 16 countries in the region (data do not include internet introduction in the Caribbean), so content and services available online need to have more and more quality. Because that’s where people will find the brand and the products, in other words, the trend is for the internet to be the main means of billing for retailers.
Merchants should also take advantage of the e-commerce growth opportunity to leverage online sales and not just rely on brick-and-mortar stores, which often take a hit in the pandemic scenario. In a June 2020 report, Statista predicted a 19.4% growth in e-commerce sales (valued at US$83.63 for 2020), much more than they predicted in the pre-pandemic.
How content should be designed for e-commerce
Brands cannot fail to produce content suitable for mobile, as according to the GSMA mobile growth will continue in the coming years, with an estimated 484 million mobile subscribers in Latin America by 2025. Driven mainly by Android, as the iOS represents only about 10% share.
Another important strategy is to optimize SEO for e-commerce and produce content thinking about leaving it always on the first page of Google. According to Statcounter, over 40% of Latin Americans never make it past the first page and 18% of them only look at the top three results (not including ads). So if your brand is not at the top, it will most likely go unnoticed by people. Google is a search engine that can help you leverage your products a lot and should not be ignored.
Latin America: customers and companies
An important piece of information about the buying style of Latin Americans is that before they actually decide to commit to a product, they make a search that most of the time is through a mobile device. So, since they spend a lot of time doing this search before they decide to spend the money on something, it’s critical that companies understand the sources of this information.
The 2020 events were a great catalyst for e-commerce both in Latin America and in the global scenario in general. Companies that were already structured and had already created sophisticated SEO strategies were well positioned and benefited as they drove and adapted to consumer behavior.
The challenge for companies to be able to leverage an online business now is to respond quickly, effectively and ensure that the offer reaches the consumer with the fewest possible clicks. Competition is increasing and companies need to do their homework in terms of user experience, feedback and logistics, ensuring the site is at the top of online surveys.
Businesses also need to understand that users in Latin America are increasingly navigating the scaled-down interface of cellphone screens. So the content they produce must be thought of that way, they need to understand their consumers’ avatars, their thought processes, and the language they use to search for goods and services online. A successful company needs to make efforts to understand the regional and cultural nuances at play in different parts of Latin America.
Latin American countries to start a business
The first step for companies intending to invest in the continent is to observe which countries have the highest internet penetration rate and how each one is performing in online commerce. According to Statista, Ecuador is the country with the highest internet penetration rate (81%), followed by Argentina (78.6%), Chile (77%), Brazil (65.9%), Mexico (65.3%), Venezuela (60%) and Colombia (58.1%). So, after analyzing these countries and the purchase potential of each one, companies can choose the most suitable one to make an investment.
Brazil is one of the countries that attracts the most business on the continent, because it is large and in absolute numbers of people connected, it ends up being larger than Ecuador and Argentina. On the other hand, its logistical and fiscal costs are somewhat severe. And for a company that wants to find it easier when opening an online business, it might be interesting to opt for other countries, such as Chile, Colombia or Peru.
The key to seizing the moment and leveraging e-commerce is analyzing the data. In Brazil, in 2020, the revolution that Covid-19 generated caused online sales to increase by 66%, this was more than double the US growth rate. Many retail companies that are succeeding right now, in addition to optimizing their content, are making the customer’s purchase process easier in every way. Some have even included Whatsapp as a tool to complete transactions and offer promotions, according to a survey by Goldman Sanchs.
The fact is that not all countries were as successful as Brazil, some managed to improve their performance, but took a little longer because they had infrastructure problems or difficulties with electronic means of payments and banks. This was the case in Mexico, where less than 5% of retail sales were made online before the pandemic and a large part of the population still did not have a bank account. After the coronavirus, that changed, customers and retailers had to adapt. Which ended up driving the 54% growth in web sales.
Strategies to improve e-commerce performance
The strategies that can be applied to increase people’s involvement with the brand and build trust are diverse. But, as a digital marketing person, I recommend that companies always stay up to date with constantly evolving features available to webmasters like “Schema markup”. According to experts, when implemented correctly, the schema can indirectly help to increase sales.
Adrian Magnacco, who is MercadoLibre’s senior SEO and ASO project manager, highlights another point: the importance of the user’s e-commerce experience, which needs to be similar to real-life shopping. The time between purchase and delivery of the consumer item needs to be short.
Confidence level of Latin Americans
A report done by Toluna and commissioned by Sherlock Communications showed some results on SEO in Latin America, among them the level of trust in web content. According to the survey, the most reliable source of information before making a purchase is the content of the websites of the companies themselves. Confidence percentages were highest in the following nations: Colombia (90%), Peru (89%) and Mexico (88%).
In relation to the publishing sectors, the one with the highest percentage of reliability is technology, which is considered the safest. The countries that most rely on this type of publication are Mexico (86%), Brazil (83%) and Peru (82%). Review sites, on the other hand, are trusted by 69% of Latin Americans, with Brazil being the country with the highest rate and Chileans the lowest.
This research brought important data to companies, because it is essential to analyze the numbers to start putting content in a space that people trust. Peruvians (77%), for example, are the ones who most believe in information about purchases on news sites, while Chileans (52%) are the least believers. Brazilians (51%), on the other hand, still do not trust so much in information that is on social media, but Peruvians (76%) are already relying heavily on these platforms as a source of information.
Blogs, in particular, have a low percentage of trust as a source of information, especially in Chile. So, it is not the most suitable space to leave content about products. In each country, trust is greater in one environment and it is necessary to pay attention to these particularities.
E-commerces increasingly competitive
To capture customers, Latin American markets are taking advantage of the example of global leaders and are improving e-commerce details by creating better, more secure and reliable payment systems and expanding distribution networks. With this, they can serve their customers better and quickly. However, this expense with distribution networks and freight can reduce profit margins. Therefore, it is essential to analyze the possibilities of making an investment to improve this entire structure.
This concern to offer increasingly faster and better services to customers is growing. MercadoLibre, for example, which is the largest retail e-commerce in Latin America even used private planes to be able to send shipments faster. Competition is getting stiff.
Social platforms are increasingly being used for sales by retail networks: it is already possible to see live broadcasts announcing products and services on Facebook. This is a trend that should get even stronger, because as people are avoiding leaving the house, the best thing to do is to invest in online channels. But a detail that companies cannot forget, is that through the internet, customers can search much more and therefore will make less impulse purchases, which was very common in physical stores, for example.
The situation in Brazil
Brazilians with emergency assistance had more digital and financial inclusion and this also moved e-commerce. Similarweb data revealed that the ten sites most accessed by Brazilians during the pandemic were: Mercado Livre, Americanas, OLX, Amazon, Magazine Luiza, Aliexpress, Submarino, Mercado Livre.com and Zoom.
The new payment system launched by the Central Bank in Brazil, Pix, has also gained a lot of support in the country and some brands have included it as a payment option for their products. Two examples were Renner and Natura, which make this instant payment option available. Other companies should already add the novelty, to increasingly increase the options for customers.
Sources:
- The presence of the internet in Brazil and Latin America
- E-commerce revolution arrives in Latin America
- E-commerce trends for Latin America
- 45% of consumers don’t click past the first page of Google