Unlock LatAm: Connecting U.S. Companies to Latin America’s E-commerce Opportunities

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On October 9th, nocnoc hosted the first edition of Unlock LATAM at the Endeavor Global offices in New York City. This event gathered key figures from Latin America’s e-commerce ecosystem and the cross-border commerce sector to explore the significant opportunities available for U.S. brands and merchants seeking growth.

In the opening session, “What’s Next for LatAm E-commerce,” Ilan Bajarlia, CEO of nocnoc, moderated the discussion. The discussion focused on key considerations for U.S. companies entering Latin America’s e-commerce markets. It also explored how the region will evolve over the next five years. Speakers included Mariano Gomide, CEO of VTEX, and Sergio Fogel, Co-founder and CSO of dLocal. They highlighted challenges such as market fragmentation, localization, and operational complexity. Additionally, they discussed opportunities for growth in Brazil, Mexico, Colombia, and Argentina.

In the main panel, “LatAm: A Risk Worth Taking?,” speakers Fred Trajano, CEO of Magazine Luiza, John Caplan, CEO of Payoneer, and Paulo Passoni, Partner at Valor Capital, discussed the opportunities and challenges of selling cross-border into Latin American markets. Moderated by Homan Milani, Managing Director at Bank of America, the conversation focused on effective strategies to mitigate expansion risks, the adoption of new technology to achieve seamless global sales, and how Latin American marketplaces are enhancing their cross-border operations to welcome more U.S. brands and merchants into the region.

We are pleased to share some of the most important takeaways from the sessions and speakers.

Key Takeaways:

Latin America’s E-commerce “Blue Ocean Market” is Booming

The Latin American e-commerce market presents a lucrative “Blue Ocean” opportunity for U.S. sellers. With an online penetration rate of 82% among the population, LatAm boasts over 351 million active online consumers who primarily shop through online marketplaces. The cross-border e-commerce market is experiencing exponential growth, expected to reach $114.6 billion in the region by 2026, more than double its current value of $52.5 billion. However, less than 5% of sellers on marketplaces in countries like Brazil are cross-border sellers. U.S. sellers have the opportunity to enter a rapidly growing market that demands their products, allowing them to diversify their sales in this region.

Localization at the Heart of Cross-Border Strategy

There is no such thing as a single market called “Latin America.” While the countries in the region may share similarities in language and cultural aspects, each market needs to be approached individually. One of the biggest mistakes U.S. companies tend to make is applying a single strategy and hiring one local team for all LATAM countries. The regulations vary significantly in each country, often shaped by their unique historical experiences.

Argentina can be unpredictable with short economic cycles. Brazil, on the other hand, allows for more long-term investments. (…) When the timing is right in Argentina, you can achieve high margins due to less competition. Chile used to be very stable, but that’s changing now. Every country has its own geopolitics, different economic cycles, and price sensitivities, so you need a local team to understand these nuances” stated Sergio Fogel.

Fragmentation Adds Complexity

Fragmentation is a significant factor in many of the challenges faced across Latin America. Take payment methods, for example: less than 25% of Brazil’s population uses credit or debit cards for online shopping. Instead, there are various alternative payment options, such as Pix or Boleto Bancário—most of which do not support international transactions.“Many international companies expand into Latin America expecting to rely on the same payment methods they offer in the U.S. or Europe—credit cards, for example—but that doesn’t work in our region. Many consumers have cards that aren’t enabled for international transactions,” stated Sergio Fogel.

There’s also fragmentation in online channels and marketplaces. Unlike the U.S., where Amazon accounts for 80% of total marketplace sales, in Latin America, the eight largest platforms hold less than 50% of the market share combined. “In contrast to the U.S., where Amazon dominates, there isn’t a single major player in Latin America. Instead, you have five key marketplaces in Brazil and around 15 across the region. Managing inventory, pricing, product categorization, and customer support in both Portuguese and Spanish across all these platforms is an operational nightmare” added Ilan Bajarlia, CEO of nocnoc.

There is No Need for Physical Presence, but a Long-Term View is Essential

Contrary to the common belief that success in Latin America requires a physical presence, this is not always true. Latin Americans are strong admirers of American brands and are willing to make cross-border purchases to acquire them. Chinese brands now hold around 20-30% of the Latin American market, showcasing a successful strategy. This demonstrates that brands can generate significant demand without a fully developed logistics or payment infrastructure.

However, once logistics and payment infrastructure are established, patience is essential. Success is not merely about allocating a large budget for marketing and promotion; more money does not necessarily lead to more sales. Investing in Latin America requires a long-term perspective. Unlike in the U.S., where a marketing campaign can quickly gain or lose traction, “In Latin America, it’s a more consistent game, with political and economic ups and downs. Some of the best investments I’ve made were counter-cyclical—when things were really bad, that’s when you should be there because in five to ten years, it will pay off” added Mariano Gomide.

Selling in Brazil is Challenging, But Now It’s Getting Easier

Brazil is not for amateurs,” cautions Paulo Passoni. Companies entering this space quickly realize that logistics come with significant risks and costs. Taxes pose another challenge, with frequent policy changes affecting product taxation. However, the cross-border sector has achieved greater clarity following a period of disputes and regulatory uncertainty.

In 2023, before the introduction of Remessa Conforme, Brazilian customers faced numerous customs-related issues. “The Brazilian customer would order a product, but it could get held up in customs, with around 10% of products not reaching the customer. This created a significant lack of confidence for buyers and led to returns, which were a major problem for U.S. sellers” explained Fred. “But now, with the new structure in place, we collect taxes upfront when a product is sold on platforms like Magalu. This eliminates friction. Sure, Brazilian consumers may pay a bit more due to taxes, but there’s no longer the risk of products getting stuck in customs. Less friction is more important than paying slightly less” he continued.

Embracing Partners to Achieve Success

Cross-border trade can be straightforward if you’re willing to tackle challenges and endure some growing pains. Alternatively, you can let a partner manage the risks on your behalf. John Caplan and Fred Trajano emphasized the importance of connecting with companies that assist with logistics and payments. By doing so, marketplace entry becomes significantly easier for businesses looking to expand. Companies should embrace online channels like marketplaces and partner with connector companies.

The world needs more connector companies—like nocnoc—that help manage the complexities of selling across borders. These companies play a vital role in ensuring localization without cutting too much into margins” expressed John Caplan

Fred noted that sellers do not need to predict demand before accessing marketplaces. By leveraging the right technologies, sellers can begin generating sales in Latin America without holding physical stock. “Sellers don’t need to predict demand. Just upload your entire catalog, and platforms like Magalu or companies like Ilan’s (nocnoc) will handle the integration for you. It’s not a small task, but it makes cross-border sales much easier” explained Fred Trajano.

Summary

Latin America’s e-commerce market holds immense, untapped potential for North American brands. Here, U.S. companies can achieve success without committing to a full physical expansion in the region. Selling cross-border has become more straightforward; with the right channels, payment, and logistics solutions in place, brands can successfully enter this vibrant market.

By partnering with nocnoc, U.S. companies gain immediate access to over 15 marketplaces across Latin America, capturing more than 80% of the region’s marketplace share. Nocnoc offers a robust, 360° solution that empowers merchants and brands. This allows them to seamlessly penetrate the Latin American e-commerce market from the comfort of the U.S. We manage every aspect of the process, including optimizing product listings and fulfillment in the U.S. Additionally, we ensure smooth door-to-door shipments, even in complex zones. We navigate customs and taxes, handle cancellations and returns, provide local customer support, and process payments in dollars. With nocnoc, U.S. sellers can unlock the immense potential of Latin America, transforming what was once a complex expansion into a streamlined, efficient, and rewarding opportunity for growth.

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