Web retailers look beyond Brazil to reach consumers in countries where online sales are picking up steam as more consumers gain access to the web, according to the upcoming issue of Internet Retailer magazine.

Brazil is by far the dominant e-commerce market in Latin America, with triple the online retail sales in 2013 of Argentina and Mexico combined, according to Forrester Research Inc. But it’s not the only game in town.

Beyond Portuguese-speaking Brazil is a region where almost all consumers speak a common language, Spanish, and where e-commerce is starting to take hold. Among the e-commerce companies looking beyond Brazil is marketplace operator Traetelo.com.

“For us, Spanish Latin America is where the gold is,” says CEO Federico Torres in the upcoming October issue of Internet Retailer magazine.

Consumers in the region are hungry to get their hands on trendyproducts, Torres says, and about 80% of goods sold via Traetelo.com are from the United States. For Traetelo.com, which has sold about $20 million worth of merchandise since 2010, sales are growing by around 200% annually on average in its top Latin America markets, which are Chile, Venezuela and Peru, compared with 25% a year in Brazil, Torres says.

In part, that’s a result of the notoriously high customs and duties Brazil levies on foreign goods coming into the country—fees that often amount to as much or more than the product price itself, Torres says, and also because of Traetelo’s concentrated efforts. “We are very much focused on Spanish-speaking Latin America,” Torres says. “And we are focused on lower-income consumers who do not have a credit card, who are worried about the final price of the product [that includes shipping, customs and duties] and who may have not bought before on the Internet.” About 60% of shoppers prefer to pay with cash when items are delivered to their doors, Torres says.

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Traetelo’s results mirror Forrester’s broader -retail growth estimates. Brazil’s online retail sales totaled $15 billion last year, up 21% compared to $12.4 billion, according to Forrester. However, some less mature markets such as Mexico are growing at an even faster clip. Online sales in Mexico, for example, grew nearly 30% from $1.7 billion to $2.2 billion in 2013, according to Forrester, which excludes ticketing and travel companies in its estimates. By comparison, Latin America web sales growth for all retailers in the Internet Retailer 2014 Latin America 500 grew 22.8% to $17.94 billion in 2013 compared with $14.62 billion in 2012.

“Opportunities exist in Argentina’s and Mexico’s online retail markets today, but they remain at an earlier stage of maturity than Brazil,” says Zia Daniell Wigder, vice president and research director at Forrester. “In both markets, educating consumers about the benefits of online shopping will be critical for e-commerce to become a mass-market phenomenon.”

For much more about Latin American e-commerce, read the upcoming issue of Internet Retailer magazine.

 

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