Internet opens up new opportunities for Latin American economies to be more productive, expand entrepreneurship opportunities, and experience inclusive growth through the expansion of trade.
Digital platforms and technologies are empowering companies to dramatically cut costs, improve customer service, create brand new products and services and reach new markets, through their products and services.
e-Bay’s data shows that in Chile, 100 percent of online sellers export, on average selling to 28 different markets – as opposed to the mere 18 percent of Chilean offline companies that export, and export typically only to two markets.
Cross-border online sales represent a significant 39 percent of all sales and 41 percent of online sales, and cross-border online purchases represent 38 percent of all purchases and 48 percent of online purchases
Even for small companies cross-border activities are significant, with over 50 percent of making cross-border sales and purchases.
Cut costs and improve operations World Bank (2015) finds that the total factor productivity growth of online sellers to be 3 percent higher when compared to offline sellers. If a company ceased to have access to the Internet or other digital networks, 89 percent reported productivity losses of 5 percent or more, and 77 percent reported losses of 15 percent or more.
Over 40% of LAC companies have their own websites, and most use emails to interact with client and suppliers. 88% of respondents feel they have improved interaction with customers
The region is also home to innovative digital companies run by intrepid entrepreneurs, who have been able to scale and export services to new users across LAC
Rappi is a sharing economy mobile app that delivers anything a consumer wants to his or her doorstep at any time. Since its launch in 2015, Rappi has tallied over 100,000 orders, and expanded from 4 to more than 100 people along with over 200 registered delivery personnel. Today, Rappi is operating in Bogotá, Barranquilla and Mexico City, and it plans to expand into a larger number of Colombian and Mexican cities and into Brazil and Argentina by the end of 2016.
Workana is an online marketplace for remote work based in Buenos Aires, Argentina, and focused on the Latin American and U.S. Hispanic markets. Workana comprises a network of over 290,000 users, including professionals and entrepreneurs from all across LAC. Its main clients are small and medium-sized business looking for part time workers.
Shippify is creating a solution for the Latin American logistics challenges, drawing on the sharing economy model. Shippify is a cloud-based system where users can track their delivery end-to-end in real time. Products are shipped via traditional shippers as well as bikers, motor bikes and taxi drivers. Shippify has more than 5,000 drivers in its community. The company is active in Brazil, Chile, and Ecuador, and is planning to open operations in Spain, Mexico, and Argentina.
Sambatech is an Online Video Platform that provides professional online video solutions to manage, distribute and monetize the videos of clients. Sambatech is a video company that thrives off innovation in their own DNA, as it was recognized as one of the 10 most innovative companies in Latin America by Fast Company. Headquartered in Belo Horizonte, Brazil, Sambatech also has offices in Seattle and Colombia.
MeLoPruebo is a leading player in Latin America’s showrooming and webrooming segments. The site launched on December of 2013 with the functionality of allowing users to choose their favorite clothes and combine them with the objective of centralizing the fashion on offer in Montevideo and in the future, Punta del Este. By August of 2014, the company had already 35,000 unique visitors with a high percentage of returning users. Today, the site counts with 55,000 active users and around 50 associated offline stores.
Of the full sample (which includes companies that do not yet sell or buy cross-border), market access and poor logistics, and customs requirements top the list as the most important barriers to online cross-border trade
LAC companies report average gains of 65 percent of revenue growth from international sales and 50 percent from domestic sales if challenges were removed.
Companies that are intensive digital traders – that drive over 50 percent of their online sales revenue from foreign markets – report gains of 51 percent in the home market and 90 percent in the foreign market if these obstacles were removed.
The smallest companies with less than $1 million revenue believe revenue gains would be 88 percent in foreign markets if barriers were removed.