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LATIN AMERICAN E-COMMERCE MARKET PRIMED FOR TAKE OFF
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HL and the Panama Ministry of Commerce have issued a report highlighting the “tremendous growth potential” of the Latin American e-commerce market. The white paper, E-commerce in Latin America and the role of Panama as an e-commerce hub for the region, looks in detail at the specific trends shaping online retail in key Latin American markets, specific opportunities and challenges for its development and the ways in which logistics can be a catalyst for further accelerated growth of the sector. It identifies cross-border e-commerce as a particularly strong opportunity, thanks to the lower density of physical retail space, high penetration of smart phones, limited product availability and purchase savings throughout the region.
Annual growth rate
E-commerce is predicted to grow at an annual growth rate of 22% in Latin America through 2021. From 2016-2018, the region was the fastest growing in the world for Uber, Netflix and Air BnB. The rapid adoption of these disruptive e-commerce platforms, accelerated by less variety, infrastructure challenges and a perceived lower level of customer service from traditional operators in the segments, suggests that Latin American consumers are particularly responsive to newer digital buying models. The market can be divided into three distinct segments: larger markets such as Brazil and Mexico, which are the first markets of entry for many e-commerce players; mid-size markets such as Colombia, Argentina, Chile and Peru; and smaller markets in Central America and the Caribbean. Mid-size and smaller markets offer significant potential for cross-border e-com-
merce growth, with many retailers able to stock centralised inventory in larger markets or cross border hubs and service multiple markets relatively quickly and at low cost. “Latin America is set to be the next frontier for the e-commerce revolution,” said Matthias Heutger, global head of innovation and commercial development at DHL. “The sector remains relatively underdeveloped in the region, so there is still a significant opportunity for retailers to establish a foothold and for logistics operators to support their future growth by establishing efficient e-commerce supply chains. “DHL has identified e-commerce as one of four key global trends in our new Strategy 2025, and this white paper supports that view. “Our DHL divisions will continue to make investments in e-commerce fulfillment capabilities, cross-border and last-mile delivery operations across the entire Latin American region to help our customers capitalize on this opportunity.” Many of the key challenges to more dynamic e-commerce growth in Latin America relate to logistics. Inconsistency in the ease and speed of Customs clearance, poor GPS coverage and difficulties with congestion and suboptimal infrastructure for last-mile delivery, and the complexity of reverse logistics processes for returns are all potential brakes on growth. At the same time, the white paper identified five key elements that comprise a successful regional logistics hub to support cross-border e-commerce: free trade zone capabilities, efficient port and airport infrastructure, business-friendly trade and customs regulations (for example, for cross-border returns), specific e-commerce logistics knowledge and inter-industry cooperation, with merchants, technology and logistics providers.
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What merry Xmas? UPS forecasts record holiday returns volume
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his holiday season in the United States, UPS is forecasting yet another record-breaking year for e-commerce returns – illustrating how e-commerce is continuing to change the way people shop for the holidays. In December, US consumers will ship via UPS more than one million return packages back to retailers daily, a pace that is expected to last into early January. An initial spike in returns is expected the week before Christmas, with 1.6 million packages being returned each day the week of December 16. This first spike will likely be driven by retailer promotions, which will prompt shoppers to buy gifts early – both for their loved ones and for themselves. The second and largest spike in returns, which UPS dubs “National Returns Day,” is expected to occur on January 2, with a whopping 1.9 million packages returned through the UPS network – a 26% increase from last year’s peak returns day.
“As retailers start preparing for the busy holiday season, they should certainly be factoring returns into their business plans,” said Kevin Warren, UPS’s chief marketing officer. “Gone are the days where returns were isolated to January – today’s empowered consumers will be sending packages back to retailers all season long.” Research continues to show that to succeed in e-commerce retailers must offer comprehensive returns services. UPS’s 2019 Pulse of the Online Shopper study found that 73% of shoppers surveyed said the overall returns experience impacts their likelihood to purchase from a retailer again. Some 42% said free return shipping contributes most to a positive returns experience. “If retailers want to be considered a ‘Returns Rockstar’ this holiday season, they will need to be prepared to offer a seamless, hassle-free returns. experience to consumers,” continued Warren. “UPS has a whole portfolio of products that can help simplify holiday returns for consumers and retailers alike.”
UPS and CVS make first home drone prescription deliveries
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PS subsidiary UPS Flight Forward along with US main street retailer CVS Pharmacy have completed the successful completion of the first revenue-generating drone delivery of a medical prescription from a CVS pharmacy directly to a consumer’s home. This was followed by another delivery of a medical prescription to a second customer in a nearby retirement
community. Both flights occurred on Friday, November 1 using the M2 drone system by UPS partner and drone systems developer Matternet. The deliveries mark another milestone in a recent collaboration between UPS and CVS to develop a variety of drone delivery use cases, including business-to-consumer operating models. The companies plan ongoing drone delivery programme development in the
coming months in order to bring to market the speed and convenience advantages of UAVs. The recent prescription delivery flights occurred with FAA approval to conduct a residential drone delivery and according to FAA regulations. “This drone delivery, the first of its kind in the industry, demonstrates what’s possible for our customers who can’t easily make it into our stores,” said Kevin Hourican, president of CVS Pharmacy.
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FedEx gives a lesson to young entrepreneurs
DHL ramps up its rail network along the new silk road DHL Global Forwarding has opened three additional Rail Competence Centers in Europe and is introducing the fastest rail freight connection between China and Germany. Located in Le Havre, France, Felixstowe, UK and
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Genoa, Italy, the local Rail Centers are staffed with China railway industry experts who can advise customers and efficiently co-ordinate freight volumes along the route. The new rail service, operating between Xi’an in
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China and Hamburg and Neuss in Germany, has been set up in co-operation with Xi’an International Inland Port Investment & Development Group Co. Ltd. and is cutting transit time from 17 days to between 10 and 12 days.
edEx Express, a subsidiary of FedEx Corp, awarded its signature FedEx Access Award to student-run company Entella, from Turkey, at the JA Europe Company of the Year Competition, Lille, France in July. Entella, a company established by 10 students from Turkey, took home the award for its development of a solar energy pump that filters water to remove solid waste. Harald Schoenfelder, vice president, clearance operations, FedEx Express Europe and award judge, said: “As an enabler of international trade, FedEx connects companies to new markets as part of our everyday business. Through the FedEx Access Award, we are able to inspire the next generation of entrepreneurs to make the most of opportunities made possible by global connectivity.”
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The signature award was designed to incorporate the notion of “access” into the core thinking of future entrepreneurs. “Winning the FedEx Access Award shows that our product can be relevant in all markets, and gives us energy and confidence to go further and play a part in reducing water pollution.” said Arya Yurdacan, CEO of Entella.