You can now find the full show notes of the Crossing Borders podcast on LatamList.com’s new podcast section. I’ll still post the audio of the podcast on my blog and I’m planning to start writing more again on my blog, like I used to.
Over the past five years, Amazon has slowly expanded into Latin America, testing the waters in Brazil, Argentina, Chile, and Mexico.
Despite the Seattle-based giant’s explosive success in the United States, Amazon has not yet made inroads as quickly in most of Latin America.
Part of the challenge is that Latin America already has its own e-commerce giant: MercadoLibre.
Founded in 1999 by Hernan Kazah and Marcos Galperin in Buenos Aires, Argentina, MercadoLibre is now the e-commerce site of choice in Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Mexico, Ecuador, Guatemala, Honduras, Peru, Panama, Uruguay, and Venezuela.
In Latin America, 47% of online shoppers buy on MercadoLibre while only 17% use Amazon. In Mexico, where Amazon offers similar services to the US, 38% of online shoppers still use MercadoLibre while just 21% use Amazon.
With a population of 30+ million people, Peru is Latin America’s fifth largest country. Much like Chile, Peru is extremely centralized, with 10 million people – or one-third of the population – living in the capital city of Lima. Less than a million people live in Peru’s second largest city, Arequipa, resulting in a highly rural population scattered across a diverse landscape that includes the Andes mountains, the Amazon rainforest, and the Andean Plateau.
Peru’s geography provides challenges to both Internet penetration and delivery logistics. These barriers help explain why Peru, despite its young and Internet-savvy population, lags behind the rest of the region in the development of e-commerce.
MercadoLibre statistics show that only 5% of Peruvians currently purchase goods online, citing reasons such as low financial inclusion, fear of fraud, and concerns about delivery logistics for the disparity. By comparison, up to 40% of Chileans and 70% of Mexicans are purchasing online. (more…)
YaEsta was one of the first sites to pioneer the Ecuadorian e-commerce market in 2012. When Alejandro Freund returned to his native Ecuador after studying in Argentina, Italy, and the US, he was shocked to see that there was virtually no way to purchase goods online. Freund had grown used to buying many commodities online while abroad from sites like MercadoLibre in Argentina. So, with funding from Kruger Labs, Freund and his co-founder, Martin Jara, decided to help grow the Ecuadorian e-commerce market from scratch and started what would become YaEsta.
If the most significant challenge to e-commerce in Ecuador today is convincing customers to buy online, one can only imagine what YaEsta faced six years ago. Freund and Jara originally built a site similar to Groupon, but eventually moved on to selling home goods, apparel, and appliances at a discount. At the time, YaEsta was called Revolucionatuprecio.com and mostly helped small producers sell their products online and reach a wider audience.
Fast forward to today, YaEsta now has a team of 25 people in Quito and is generating over US$3M in sales each year. Having raised a US$3M Series A round last year, YaEsta is taking on a strong position in the Ecuadorian e-commerce market. If you want to learn more about YaEsta, you can listen to my interview with Alejandro Freund on the Crossing Borders podcast.