Online purchases spike in Latin America, Caribbean as millenials gain greater economic power
Published:Sunday | December 22, 2019 | 12:58 AMCarlene Davis/Gleaner Writer -
The millennial generation in Latin America and the Caribbean (LAC) is changing consumption patterns in the region by choosing online over physical transactions, according to a study released by Mastercard.
The report called “Examining the Latin American and Caribbean E-commerce Market” was released during its annual Innovation Forum for Latin America and the Caribbean, in Miami Beach, recently.
According to data researcher eMarketer, E-sales in LAC are expected to grow 21.3 per cent this year to $71.34 billion.
The main factors driving this growth include the increasing economic power of millennials, who represent 30 per cent of LAC’s population, along with the massive proliferation of smartphones enabling instantaneous purchases.
The study outlines the needs and expectations from online shoppers in the region and what needs to be done for them to buy more frequently. Men and women from Argentina, Brazil, Chile, Colombia, Costa Rica, the Dominican Republic, Mexico, Peru and Puerto Rico, who have shopped online in the past 12 months, and whose ages range from 18 to 50 years old, were surveyed.
“Addressing the factors that would motivate consumers to shop online more frequently could help further increase e-commerce adoption in the region. This can help the retail and payments industry take advantage of the billions of dollars in untapped demand in e-commerce that is present in LAC,” said Jorge Arbesu, Mastercard vice president of Cybersecurity for LAC.
The study revealed that Brazil is the country where consumers make online purchases most often, followed by Mexico and Colombia, with more than one purchase every 15 days. Chile and Peru were the countries buying least frequently, about a purchase every month.
What Would Make Latin Americans Shop More Online?
Fear of their card data being robbed was of concern to countries such as Mexico, Peru and the Dominican Republic. Brazil and Argentina were concerned about high shipping cost; they listed other barriers to shopping online such as delay in shipping, inability to see the product and concerns about the product arriving at the right address.
“Educating these consumers about new technologies like artificial intelligence and passive biometric authentication may allow e-commerce to spread into more households, turning those rare shoppers into frequent ones, once they know they can trust the system.
“Still, it’s important to note that these numbers represent fewer than half of the participants of each country surveyed, meaning that most online shoppers have faith in the e-commerce system,” said Arbesu.
The study also highlighted the fact that most consumers have a strong desire to grow beyond passwords and see biometrics as the next phase in their authentication. These biometric authentication measures might include fingerprints, facial recognition and other forms of emerging identification.
“This older generation tend to be a bit more concerned with security, so there is not only the task of being secure, but the feeling of security making them feel secure through stuff like biometrics is going to be a big step in making them feel certain that they can make a digital transaction,” said Arbesu.