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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Latin American Shipping: Opportunities for Startups

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.

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Ep 45 Antonio Nunes: Delivering Latin America’s Groceries with Mercadoni

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.

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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”