How’s LatAm e-commerce faring in the crisis?

So far, the performance of e-commerce during the COVID-19 crisis across Latin America offers more nuances than certainties, because, like other sectors, online sales are also affected by a change in habits.

According to data from the Brazilian e-commerce association (ABComm), some virtual stores, mainly for food, beverages, beauty and health products, increased sales by 180% in the first weeks of March. 

The survey, carried out between February 24 and March 18, detected a 111% growth in purchases of health items, 83% of beauty products and perfumery and 80% of supermarket goods.

The Compre e Confie network, which belongs to the Clearsale group, said online sales grew 40% in Brazil in the first two weeks of March. Health items were up by 124%. The health and beauty segment as whole grew nearly 37.7%.

Driven by shelter-in-place measures, laptop sales rose 112% as of March 16 - equivalent to the total sold during the 2019 Black Friday week.

For the same reason, sales of game consoles were up 137%, and of games and peripherals by nearly 103%. 

In January, e-commerce represented 6.7% of total retail sales (except vehicles, auto parts and construction materials), according to Brazilian e-commerce chamber camara-e net.

While up-to-date figures are not yet available, this percentage certainly went up in the wake of the pandemic.

BITS VS BRICKS

Nevertheless, the rise in online sales could not offset drops in sales in physical stores, the Brazilian commerce confederation (CNC) said in a report released on Tuesday.

The entity estimated that social isolation and the closure of businesses across Brazil translated into 53.3bn reais (US$10.5bn) less for retailers by April 7.

But Nielsen said overall retail sales increased by 23.3% from March 16-22, compared to the week before, driven by the categories commodities (food in general, 66.1%), cleaning (43.1%) and grocery (34.5%).

This surge seems to be related to consumers who, fearing shortages, bought supplies for stockpiling, Nielsen said.

FIRST TIMERS

The number of online first-time buyers has also grown in different markets during the pandemic.

In Argentina, 90% of new online buyers were adults, including senior citizens.

Argentina e-commerce chamber (CACE) secretary Mario Grinman told Clarín newspaper that these customers buy mostly grocery and pharmacy products via digital platforms.

In Chile, online sales grew by 119% during the last week of March, the Santiago chamber of commerce said.

Analyzing debit and credit card data, electronic commerce rose from 6% of total retail sales to 13% in the last days of March, according to the chamber.

In an interview with BNamericas at the end of March, Lucas Goycoolea, head of regional e-commerce solutions at VTEX said the company's sales increased too.

"Many clients who use VTEX are increasing their sales considerably, some of them have reported an increase of up to 450% compared with an ordinary day, mainly driven by food and alcoholic beverages," he said.

"At the other extreme, sales of non-essential items have fallen up to 50%, but we expect that this trend will reverse as physical stores close for quarantine, leaving e-commerce as the only available sales channel," Goycoolea added.

After closing 2019 with an average 35% increase in electronic sales over the year before, Mexican e-commerce purchases registered three-digit growth in certain areas, according to data from the Mexican association of online sales (AMVO).

AMVO said e-commerce offers “opportunities for companies in Mexico to take the best practices implemented in markets that have faced or are currently facing an emergency scenario and take advantage of that for their growth.”

Yet, Lindsay Lehr, payments practice director at research firm Americas Market Intelligence (AMI), told BNamericas recently that “2020 will be the first year that e-commerce as a whole in terms of volume actually declines.”