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Giving Compass' Take:
· The Aspen Institute talks with Federico Sandler about creating social and environmental impact through the growing Latin American ecommerce market.
· How has the internet changed the way people shop around the world? How is this an opportunity to create social impact?
From college textbooks to holiday must-haves, ecommerce has transformed shopping patterns in the United States. Does the global nature of the internet mean it has done the same everywhere else? Not quite—at least, not quite yet.
That’s because being able to shop online often depends on offline factors, from the bank account needed to purchase an item to the transportation network needed to ship it. 2019 First Mover Fellow Federico Sandler knows this well: He’s the Investor Relations Officer at Mercado Libre, which hosts the largest online commerce and payments ecosystems in Latin America. We spoke with Federico about why the Latin American ecommerce market is taking off, and where he sees the opportunities for weaving social and environmental impact in this growth market.
I would say that the biggest difference that jumps out is that in Latin America, we are currently where ecommerce was in the US about 10-15 years ago. More specifically, when you look at ecommerce penetration (as a percentage relative to total retail sales), in Latin America it is still in the mid-single digits, while in the US has grown consistently from the mid-single digits to the mid-teens.
Ecommerce has evolved significantly in the US, but also in Europe and in Asia, where we observe people not only increasingly buying consumer electronics & apparel online from mobile devices, but also moving into categories that are purchased with greater frequency such as fast-moving consumer goods and even fresh produce. That is still not occurring at scale in Latin America. This is, in part, due to the quality of logistics networks. The US has better logistics infrastructure across the country as well as multiple distribution centers close to large metropolitan areas to deliver quickly to their buyers. Also, our US ecommerce counterparts have made significant inroads in building scalable and efficient logistics networks. We are not there yet in Latin America, but the gap is closing as new innovative technologies (including our company’s) merge with the existing logistics value chain allowing for better delivery times at more competitive costs.
Read the full article about the Latin American ecommerce market at The Aspen Institute.