Latin America’s Digital Reality

The digital landscape has been changing rapidly in emerging markets. Latin America is transitioning from an Internet amateur region to a fully connected one. Argentina is a clear example of a market that has shifted from barely- to well-connected in a few short years. Reasons include wider Internet usage in the country (there are already 30.5 million users) and more Internet connections (5.7 million in 2011).  According to an América Economía Intelligence study e-commerce grew 42.8% in Latin America in 2011, reaching US$43 billion. This is a huge jump – a 98.5% increase – in comparison to 2009, when e-commerce revenues were only US$22 billion.

However, Latin America still faces certain obstacles in maximizing their digital economy. A recent McKinsey & Company study assured that even if sixteen new companies are created online every hour in Latin America, its impact on its economy is still relatively minor. “Internet represents an average of 2.3% of the GDP, while in developed countries, that number jumps to 21%.” The two main reasons include lack of infrastructure and economic deficiencies. In order to develop a regional web ecosystem and foster e-commerce, infrastructure and strategy must be further developed.

As an Argentine having moved to New York City ten months ago, I would say that the greatest challenge for e-commerce is people’s mistrust and suspicion regarding buying online; fraud being the utmost reason. Hence, it is necessary to have patience to educate people and take full advantage of Internet’s possibilites.

If interested, more details to be found here:

http://www.1080partners.com/site/?p=1377

http://www.emarketer.com/Article.aspx?R=1009139&ecid=a6506033675d47f881651943c21c5ed4