PayU is active in 7 Latin American markets, all of which are also seeing strong e-commerce gains.
Mexico rivals Brazil for LatAm leadership
Of the countries we surveyed, Mexico had the third-highest projected spend on digital goods in 2021 after India and Brazil, at USD $2.1 billion. Mexico’s online education spend on our platform also registered the largest increase in 2020, with gains of 139%. E-commerce fashion spending in Mexico, meanwhile, was higher than Brazil despite Mexico (127 million) having only a little more than half of Brazil’s population (211 million).
Chile and Peru take a step forward
When it comes to smaller Latin American markets, Chile and Peru are both interesting countries to watch despite being at opposite ends of the income spectrum. With approximately 19 million people, Chile would be one of the 10 largest countries in Europe by population. The e-commerce market has historically been held back by challenges with logistics as well as low levels of mobile commerce, but the market still shows significant growth potential. Spending on digital goods rose by more than 200% on our payment platform in Chile during 2020.
Peru on the other hand has faced challenges largely with consumer trust, particularly when it comes to digital payments. Cash is still widely used, and a 2019 survey revealed that majorities in Lima and other Peruvian cities stated that they had never purchased anything online because they did not believe they would receive the product they had ordered. As it has in so many places, the necessity of e-commerce during the pandemic has chipped away at the trust issue and succeeded in bringing more Peruvians online.
With the fourth-largest population in South America (33 million), Peru could become a significant e-commerce growth market in the years to come. Across PayU’s seven Latin American markets studied in the Next Frontier report, Peru exceeded the average growth rate in every market sector.
Argentina stands out
Argentina distinguished itself on our platform in 2020 with massive increases in transaction value across multiple sectors.
Online fashion spend grew last year by 447% on the PayU platform in Argentina, with an average transaction value of USD $108, which was the highest across all of our LatAm markets. In digital goods, meanwhile, Argentina was +131% on our platform, trailing only Chile.
E-commerce has been a bright spot in Argentina since the country’s 2018 economic crisis, the aftermath of which is still being felt today. According to the Argentine Chamber of Electronic Commerce, online business grew 76% during 2019, after growing by 64% in 2018.
Over the past year e-commerce has begun to take hold in more of the country, after previously being mostly confined to Buenos Aires and other large cities. Internet penetration is increasing, mobile users are rising, and more Argentinians are gaining access to financial services, all of which will contribute to continued e-commerce growth in Latin America’s third largest economy over the coming years.