In 2014, the US government launched an initiative called “Look South” to show companies in the United States the benefits of shipping to the Latin American market. Despite numerous trade agreements between Latin America and the US, 58% of US companies at the time were exporting to only one other country: Canada or Mexico.
Latin America is a close US trading partner, yet the complicated shipping logistics in most Latin American countries – whether by air, water, or overland – are hurting the region’s supply chain.
The challenge of automating and streamlining shipping logistics in Latin America is becoming more pressing as e-commerce and other B2C delivery businesses take hold. Not only are large corporations dealing with sending and receiving bulk cargo across the region, but individual consumers want more on-demand services that require better organization and logistics.
Latin America still lags behind in the development of its shipping industry. The World Bank reported that in 2014, no Latin American country was in the top 25% of the Logistic Performance Index global rankings. In 2016, this figure hardly changed; Panama is the top-ranked Latin American country for logistics and shipping, yet it comes in 40th on the LPI global rankings. Chile is next at 46th, with Mexico and Brazil ranking 54th and 55th, respectively.
According to Antonio Nunes, Latin American families spend up to four hours per week in the supermarket. When combined with crippling traffic and safety concerns in many Latin American cities, it becomes clear why delivering groceries in Latin America could be a highly lucrative business. Antonio Nunes noticed that opportunity while living in Bogota and sold everything to go on a mission to deliver Latin America’s groceries in under an hour.
In this episode, I sat down with Portuguese entrepreneur, Antonio Nunes, to talk about why Latin America is growing so quickly, why last mile delivery is a better business in LatAm than in the US or Europe, and what he has learned in his journey doing business across borders.
Chile is an economic powerhouse at the tip of South America. Rapid technology infrastructure development paired with a business-friendly political climate and high levels of Internet penetration have helped Chile’s e-commerce market stand out among its larger counterparts.
With a population of ~18 million, Chile is a small market compared to behemoths like Brazil and Mexico. However, Chile’s e-commerce sector is stronger than its local counterparts; Chile has a disproportionate 9% share of Latin America’s e-commerce market, despite holding only 2% of the region’s population. The Chilean e-commerce market is already worth more than US$3.7B and targeted to grow at 35% in 2018, reaching US$5B by the end of the year.
In part, this enormous growth comes as a result of international platforms, such as Amazon and AliExpress, which have drastically reduced delivery times and made e-commerce more accessible. Last year, national shipment company Correos de Chile partnered with AliExpress to reduce delivery times from a maximum of 60 days down to a window of 16 to 38 days. (more…)