An Overview of Latin America’s Food Delivery Industry

In the startup world, success always attracts copycats and competitors. As a result of past successes, Latin America’s food delivery industry is one of the most competitive in the world. Brazil’s iFood, a subsidiary of tech giant Movile, became one of the biggest players in the Latin American startup ecosystem, raising US$500M from Naspers and other international investors, in what many consider to be the largest round in Latin American startup history. iFood is growing incredibly quickly, registering 390,000 daily deliveries, a 109% increase from 2017. iFood’s CEO, Carlos Moyses, recently appeared on my Crossing Borders podcast to talk about the growth of Brazil’s biggest delivery company.

Rewinding back to the early 2010s, food delivery in Latin America had its first peak long before the region truly went digital. Latin America’s food delivery hit the news because Delivery Hero, a German food delivery conglomerate, secured international reach through a spate of acquisitions in the region.

In many ways, these deals spurred the next generation of entrepreneurs in the food delivery space and created many of the most popular apps Latin Americans use today.

Food delivery fits into a trend that is shifting Latin American shopping patterns online. When PedidosYa was founded in 2009 in Uruguay by Alvaro Garcia, Ariel Burschtin, and Ruben Sosenke, just 27% of Latin America’s population had Internet access.

Today, 66% of Latin Americans have Internet access, and in Argentina, Chile, Brazil, Ecuador, Paraguay, and Uruguay, more than 70% of people are Internet users.

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E-Commerce in Colombia: Building on First Successes

Colombia is one of Latin America’s biggest economies, yet traditional e-commerce has struggled to take a hold due to complex logistics challenges such as Colombia’s mountainous geography and lack of integration with international markets. Furthermore, many consumers in Colombia are still wary of online retail platforms and until recently, payments systems did not offer any options for the unbanked.

All that began to change when Rappi entered the market. Founded in 2015 as a grocery delivery service, Rappi has gone on to raise millions of dollars from US investors such as Y Combinator and Andreessen Horowitz for its intuitive app that allows users to order just about anything to their doorstep.

Rappi gained millions of users in Colombia and Mexico, as its founders quickly tackled issues like delivery logistics and offline payment systems that had long stumped e-commerce companies in Latin America. Rappi deliveries offer an immediacy that has helped skeptical consumers place their trust in online commerce. Furthermore, their cash-on-delivery payments system democratized mobile and electronic purchasing in Colombia and Mexico, where credit and debit cards remain relatively rare. Continue reading “E-Commerce in Colombia: Building on First Successes”