Photo by Alina Grubnyak on Unsplash
The COVID-19 pandemic led to a sudden increase in online transactions in Latin America throughout 2020, making the region one of the fastest-growing e-commerce markets in the world. According to Statista, Worldwide e-commerce will grow 86% between 2019 and 2024, with areas like Latin America doubling its size during that period.
Sources: https://www.statista.com/statistics/804022/latin-america-e-commerce-sales/ and https://es.statista.com/grafico/22835/boom-del-e-commerce-en-latinoamerica/
Before the outbreak, e-commerce penetration was comparatively low across Latin America; low bancarization, complicated logistics, and a general lack of trust in online payment methods hampered its adoption. However, circulation restrictions forced many stores to close or open an alternative commercialization outlet, helping grow e-commerce in the region, in some cases, 2020 e-commerce sales already surpassed the 2024 forecast projected back in August 2020.
An estimated 13 million people in Latin America made an online transaction for the first time last year, while retail e-commerce grew 36.7% to about $ 85 billion, according to Statista. At the national level, growth was especially significant in Argentina (79%), Brazil (35%), and Mexico (27%). Nonetheless, a large portion of retailers is still figuring out how to take the first steps to put their businesses online. So let us summarize how to open this new (and profitable) front up and ready to run.
As Soon As Possible, But Original
Starting a small e-commerce site is no small business. Pre-built solutions usually require ample configuration to get the store right and long hours of integration with payment, fulfillment, and accounting systems. Do not underestimate the need for a development team to set up your store.
After defining your e-commerce strategy and defining your minimum requirements from the commercial team, your online store can be ready relatively soon, either using a predefined template or starting your design from scratch. And as in any software development project nowadays, incremental development is your best approach. Your final destination might be a little bit different than what you envision today after you get some experience managing your online store.
One store – multiple storefronts
The ubiquity of an e-commerce store is no longer valid. You set up your social media strategy to reach your consumers where they are. Now they expect you to bring your store to their social media site of choice, not to be redirected to a third-party site.
During 2020 we saw how this social media landscape evolved with storefront popping out in TikTok, Snapchat, Facebook, and Instagram. But if social media though us something, the next social media is yet to come.
Administration
All pre-built solutions come integrated with an administration portal. But in this digital transformation era, manually managing a digital storefront is as effective as keeping your accounting in a notebook. Look for a solution with integration to your existing systems, or plan for this integration from the start.
Part of the administration is the ability to measure and analyze everything. If you want to run a successful online store, you must understand what happens during your customer visit, where they came from, what products they look, what they compare to, and when they leave. All these measures will allow you to understand your customers’ behaviors and plan strategies to convert higher sales. Your store administration portal should provide all the information and tools to analyze their behaviors and link to your marketing software to automate appropriate actions to improve conversion.
Expedite Checkout and Frictionless Payments
Long gone are the days when you wanted your consumers to wait in line with impulsive merchandise on their sides. With a 68% abandonment rate during the checkout process, you want your consumers to move swiftly through the checkout process.
Moving swiftly across the checkout means that you have to take care of all the little details, single sign-on, address verification, guest checkout, etc.
Payment is the next step where you want to remove friction for your customers. No single solution can accommodate all possible considerations; it is paramount to find the right partner that tailors to your local market needs.
Latinamerica’s payment system has grown over the past few years, with digital-first banking solutions, digital wallets, and mobile payments, together with traditional payment systems. However, market fragmentation, local regulations, and low bancarization in the region (almost 50% of the population do not have access to a banking account) call for a country-specific solution, including an alternative for cash payments.
Source: https://www.paymentscardsandmobile.com/the-latin-american-e-commerce-market/
Globalizing your business is a different challenge. Running a global business goes beyond only allowing consumers to purchase your products and services in their local currency or provide a choice of currencies to transact in. It also requires you to be mindful of the local rules, regulations, and taxes (including cross-border fees) to officially establish your e-commerce business within new global markets and regions.
Customer Service
Your online store is always open, so your customer expects that your customer service to be open during those hours too. Since walking away from your store is only a click away, constant monitoring and prompt problem fixes are a must.
Be upfront with your customers about your working hours, consider that you may need to offer extended service hours to your customers, and use technology (i.e., AI-powered chatbots) to handle communication outside your defined extended hours. And you must also be upfront with your employees (technical support and customer service reps) and service providers on your expectations regarding response times.
Sum It All Up
There is no one size fits all solution; neither everyone needs a custom build store for their site. One of the available pre-built online store solutions and plenty of customization might be the best bet.
Find an expert technology partner to help you along the way. Internal development teams are not for everyone, while outsourcing the whole project may not allow you to evolve as you learn. A mixed solution with part of the team belonging to the organization and a technology partner like Mahisoft, offering staff augmentation, might be a good fit.
And finally, don’t try to build it perfectly from scratch. Do, learn, adjust and learn again.
About Mahisoft
Mahisoft is a software development company with over eight years of experience offering our customers cutting-edge software solutions. We are the right partner for SMBs, SaaS, and PaaS.
We can help you start your e-commerce site from a pre-built solution like WooCommerce, Shopify, or cs.cart; or develop a tailor-made solution based on our software accelerator Kamino. We use a microservice architecture that allows us to deliver software fast in a reliable way and can escalate or increase its functionality to meet your current and future needs.
