Latin America May Be Holiday Gift Cross-Border Merchants Are Seeking

The winter gift-giving holidays are as important in Latin America as anywhere else, and online retailers want to use the opportunity not only to support receipts in 2022 but to develop future markets now.

Speaking to PYMNTS, Mike Goodenough, global head of e-commerce at Worldline, said the doom and gloom of the coming recession is not stopping eCommerce operators from other countries looking for ways of finding Latin America’s demand for cross-border payments. .

He said: “If we look at what happened during the COVID period in physical sales, there are always winners or losers, but I think at this time, people are still going to take advantage of the opportunities they see. during sales, and everyone else’s. I’m still going to celebrate Christmas.”

Noting that Black Friday and Cyber ​​Monday sales will be as important in Latin American markets as they are in other markets, Goodenough said retailers need to increase their focus on seamless digital payments. and positions in the stock to make the most of the coming months.

In that, he sees “an increased focus on affordability” when LatAm sells, as is the case everywhere in the region in the current economic situation, adding that Worldline’s customers started planning to sell cross-border holidays in the summer.

“Our vendors are now focused [winter holidays] in July. For example, in July this year, e-retail sales were growing. They see [the holidays as] important time. They are already trying to make sure they have everything in their power to make this a big success. It is not the last minute they will be connecting with Latin America. ”

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Localization is Key

Connecting to Latin America as an eCommerce seller from Europe, the US or anywhere else is increasingly important as these markets emerge with enthusiasm, with real-time payments, rates, and other methods by using the platform power of companies like Worldline.

Noting that Worldline began targeting emerging markets before COVID, Goodenough believes the pandemic has accelerated this process significantly.

“What we’ve seen with our existing customers as they expand into these areas is that, despite the crisis. [of] The global recession, these countries, of course with eComm, were already experiencing great growth during the COVID period, especially retail, but also post COVID this boom continues first. ”

He insists that investments continue in Latin American countries, increasing internet access, and mass penetration of mobile phones. “These have helped growth continue in these markets. For many of our clients, this has been a success story, and LatAm is one of them. ”

The big eCommerce players are using their tools to advance, but it’s anyone’s game in the space right now. Although he gave profit warnings from the main eCommerce sellers around the world, he said that “they are still returning … funds to these markets. Although there is a significant decrease, from customers in these countries in Latin America, especially Brazil as an example, we have seen a 50% increase in consumers willing to buy online in the last five years.

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Where Worldline comes in is to offer and use payment methods to ensure that every basket converts efficiently – especially payments.

“Local payment methods, understanding the market, supporting local segments in stages [are] it is very important,” he said. “Otherwise, you’re touching those markets and you’re missing out on a lot of growth. Cross-border is another way in, but if you cross-border without a location, especially in Latin America, you’re going to be and trouble.”

See again: Value of Local Expertise Underestimated in Cross-Border Business Expansion

Real Time and Other Realities

However, several Latin American countries have advanced to advanced economies with innovations such as real-time payments that go a long way in creating the types of payments that consumers expect in each region. what they expect now.

“There is a risk that outside the region, you look at it like Europe and say that one size fits all, all countries are very similar, consumer behavior is very similar, but it is not,” he said so.

Goodenough noted that Worldline’s four most important LatAm markets are now Argentina, Brazil, Colombia and Mexico, all of which have established real-time payment plans. For that reason, among others, he said, “We see the big sellers looking at those because, in the next year or two, that’s where they can be guaranteed a lot of success.”

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Brazil and its PIX real-time payments project is an example of this expansion of the real-time ecosystem in Latin America, which is attracting great public interest and adoption. That’s even more impressive given the high number of unbanked people in LatAm and continued capital growth.

Goodenough backed that up with numbers, noting that as of the end of 2020, “eight months after launch, there were something like 800 million PIX payments, and a third of the Brazilian population, which is about 213 million people, registered. PIX users.”

Large local platforms such as eCommerce platform MercadoLibre and digital payment provider Mercado Pago provide tough local competition to foreign entrants, but tools are available to help local retailers to be more efficient in their expansion. see Latin America.

One option is to partner with MercadoLibre, Goodenough said, which could be convenient for small eCommerce sellers. Large merchants “can enter the market where MercadoLibre is already strong by crossing the border and making sure they support these local payment methods in order to allow customers a local experience.”

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