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Impact of COVID19 on E-Commerce: Latin America



Context

After the declaration of Covid19 as a pandemic by the World Health Organization, its effects can be distinguished in three large conglomerates: governments, companies and people seen as consumers.

On the government’s side, the use of public policy tools has accelerated in the region, such as stimulus packages aimed mainly at containing two adverse effects: liquidity in the economy, and increased poverty after subsequent unemployment. Regarding liquidity, measures have been taken to facilitate access to credit as well as reductions in the intervention interest rate. Regarding the increase in poverty, budget items were implemented to assist the most vulnerable population through subsidies, sanitary provisions and subsistence items.

Companies have had different reactions depending on their economic activity. They could be wrapped into three groups:

Consumers, in a situation of isolation, had to face two situations:

  1. They continued to consume exclusively basic-necessity products and some type of online entertainment or consume a specific good (for example, a sports attire to exercise or utensils to cook at home).
  2. They continued to consume exclusively basic-necessity products and save or go for loans or subsidies since they lost their jobs or do not have enough money to face isolation without a source of income.

The interaction of these groups represented a challenge in terms of defining whether the disruptions that were being seen would remain, would mutate to a new economic balance, or everything would return to normal once this situation is overcome. In coming months, the economic environment will be facing possible changes in consumption habits, or even new ones. The prices of raw materials could change, since serious changes are already beginning to be seen in the prices of basic goods such as cereals; in addition to oil, where complementary tensions to the pandemic are generating uncertainty in the markets, especially for countries in the region that depend highly on oil price.

In conclusion, the global health emergency has unleashed countless effects the world is yet understanding. However, it is already evident that the behavior of companies and consumers is turning to the use of digital alternatives. The volume of migration from offline sales channels to online channels that we expected to happen in 5 years is happening today; despite barriers such as banking access or Internet access.

The panorama of E-commerce in the coming months is positive, however, we must pay close attention to changes in consumer behavior (vertical), their purchasing power as a generator of demand (employment and access to credit), their affected economic activities with high weight on E-Commerce (Tourism and entertainment) and the strength of public finances and central banks to cope with the impacts on the economy.

Why we created “Impact of Covid19 on E-Commerce: Latin America”

With data from PayU and the analysis and visualization capabilities of FIDELIO, we developed this report. Its purpose is to freely help our clients, partners and the business community with an updated perspective and trends of the impact of the Covid19 pandemic on E-Commerce in Latin America.

This report is intended to generate an understanding of our current scenario to propose ideas that mitigate the economic impact of Covid19 based on the information of 115 million transactions processed annually by PayU in more than 22 thousand businesses in Argentina, Brazil, Colombia, Chile, Mexico, Peru and Panama.

We developed this report to deliver updated information in the hands of businessmen and formulators of public policy, which we hope allows them to make decisions based on information to do adequate management during these challenging times.

The data

The data included in this visualization is an anonymized set of online sales transactions of more than 22 thousand Latin American companies between February 1st and May 20th, 2019 and 2020.

These data do not represent total sales in a market or category, and it is not a forecasting tool. Even though we believe that access to data and trends can help our community persevere and prevail during these uncertain days, remember that even accurate data-based visualizations should be used with discretion.

We have dealt with as many outliers and anomalies as possible, and are committed to working to aggregate more data sets of allies and ensure that trends are explained and understood. Still, it is possible to find deviations associated with the representativeness of an industry in our dataset. If you have any questions about a data trend or think you have seen an anomaly, contact us at

We work with our community of companies and partners to continually add updated data and new data sources. This will help all of us as a community to manage uncertain times and provide an evolving vision of regional business for all.



Transactions / Sales


The figures shown correspond to the value processed by PayU’s payment gateway in dollars (Total Payments Volume -TPV-). This refers to the amount of transactions or items sold. It is not intended to establish the number of products sold or the number of completed transactions but rather the value of the payments processed.

About

PayU

PayU is a leader in online payment processing solutions in emerging markets. A truly global company operating in 18 markets and home to 27 different nationalities. It is the fintech and electronic payments division of Prosus, a global internet business group and one of the largest technology investors in the world. Operating and investing on most continents and in markets with long-term growth potential, Prosus builds leading internet companies that empower people and enrich communities. Being part of Prosus gives us the presence and experience to make a real impact.

At PayU, our vision is to create a world without financial borders where everyone can prosper. We provide people in high growth markets with the services and financial products necessary to progress. Our local experience in emerging markets allows us to expand the reach of financial services. The basis of our strategy is to understand the markets in which we operate and the people with whom we work.

PayU has:

  • More than 1,500 employees
  • More than 30% year-over-year growth
  • More than 200 K merchants in the world trust us with their payments
  • More than 300 local payment methods


FIDELIO

FIDELIO is a consulting and development company for digital transformation solutions. It understands that digital is essentially a human matter, and that is why the perspective must focus on people, their challenges and problems, but above all on their purposes, to propose solutions from that point on.

Fidelio is a confident, pragmatic and dynamic, a business consultant, a facilitator of necessary transformations.

We are continually looking for partners to contribute data, ideas, knowledge and articles. If you want to contribute to this project, contact us at: