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Is It Worth to Dropship to Latin America?

Is It Worth to Dropship to Latin America?
CJAug. 19, 2022 09:16:143845

When we talk about dropshipping, most people would think about dropshipping to the US or European countries. Yet, Latin America (LATAM) has also become one of the top fast-growing eCommerce marketplaces these years.


For American entrepreneurs, this is the perfect time to start a business in their homeland. For dropshippers outside of America, it is also a great time to expand their business internationally.



But building a successful business in Latin America is not easy, this market is full of potential and challenges at the same time. If any business owner starts doing dropshipping with zero understanding of the local market, the business may not last long.


So is it worth dropshipping to Latin America? Let’s find out more details in the following sections.


The growing GDP and smartphone penetration showing a great opportunity for dropshipping to Latin America
source from Americas Market Intelligence/BoaCompra



Why Latin America? - The FASTEST Growing Market


Yes, eCommerce in Latin America is booming. Latam is one of the fastest growing eCommerce markets, as well as the fastest digitizing region in the world.


2018-2021 eCommerce volume is increasing fast in Latin America
source from weglot


Various potential customer


Since the beginning of the twenty-first century, shopping online has gradually popular among Latin American Consumers.


With more payment options available in local currencies and the increase in Internet users. Making digital purchases online has become universal in Latin American Countries.


Source from Statista


Speaking of which, COVID-19 is an important booster for eCommerce development in Latam.


They got about 101 million shopped online for the first time between 2020-2021, according to the Statista record of 2021, there are more than 400 million internet users online across 17 countries in the regions of Latin America, and this number is expected to increase in the following years as well.


The Colombian eCommerce market is increasing at a pace of 31% yearly, and the Argentine industry is expanding at a rate of 24% annually. Moreover, mobile commerce sales in Colombia and Argentina climb by 64 percent and 45 percent annually. 


In Mexico, the eCommerce market revenue is estimated to hit over 74,000 million by 2025. These are only three of the market’s 33 nations. Yet a similar trend exists over the whole region.



Best performing countries for dropshipping to Latin America


- Brazil

  • Population: 212.6 million
  • eCommerce market revenue: $15.59 billion
  • Average revenue per user (ARPU): $379


In the past, various historical reasons made shipping products to Brazil an extremely hard thing to do. Many international industries failed to integrate their dropshipping business into this market.


So with fewer competitors entering the market, Brazil’s eCommerce industry is far less competitive than in US and EU countries now.


Besides, with the wide acceptance of network coverage, most Brazilians are able to access the internet and purchase products through various websites. Back in 2020, 14 percent of all products sold in Brazil were purchased on smartphones and laptops.


source from apexx


Popular eCommerce websites in Brazil are like, Mercado Livre, OLX, Magazine Luiza, Americanas, etc. If you are running social media marketing to drive sales, then Shopify is a good option as well.


Source from Statista


What’s more, Brazilians prefer to buy now and pay late in local currency, and this is an important shopping habit you want to know before selling to this place. Top online purchase niches in Brazil are electronics, fashion, footwear & bags, mobile phones, and so on.


- Mexico

  • Population: 128.9 million
  • eCommerce market revenue: USD 15.8 billion
  • Average revenue per user (ARPU): $334


In the year 2020, about 15.8 billion of revenue was generated in the eCommerce market in Mexico. And on average each user can generate $334 revenue.


According to Statista, over two-thirds of Mexico’s online consumers have at least once shopped at an international site.


Moreover, nowadays over 71% of the population in Mexico is able to access the internet, which means 90 million people have become internet users. So, Mexico shouldn’t be overlooked if you are planning to expand your business globally.



Top selling niches in Mexico are Food delivery, fashion, electronics, and toys, etc.


And Mercado libre,(Pardon me for the pronunciation again) Amazon.mx, Coppel, and Walmart.mx are the top four popular eCommerce platforms in Maxico.


For website builders, Nuvemshop is a good option in order to target Mexico, as well as Brazil. Lately, CJ has finished the integration with Nuvemshop, so sellers can connect their stores and list products directly from CJ.


Is it Worth Dropshipping to Latin America?


Simply put, for any eCommerce company or store owner, Latam is a large market with great untapped potential. So there're definitely many opportunities for dropshippers to explore and expand their businesses.


Big companies such as Amazon and Aliexpress have dominated the Latin American eCommerce market, but there is still plenty of space for individual stores and small businesses to develop.

It is not hard to predict that more and more individual sellers will find ways to overcome the difficulties and become the winner in this flourishing market.


But all of these are based on a better understanding of local online shopping habits and restrictions.


Dropshippers need to do complete research about the target market before entering the field. And Then localize the marketing and selling methods to make customers feel connected to the merchant. Such a localization process is vital for building a healthy trust relationship between the merchant and customers.


Tips of Dropshipping to Latin America


- Localization


source from Americas Market Intelligence/BoaCompra


Many dropshippers think if a marketing method is proven successful, then it can be applied anywhere. However, one method that works on US consumers may not be appealing to Latin American consumers.


Besides, customers also share different shopping habits across the region, it is vital for dropshippers to understand the variety of customers in each different Latin American country.


For example, US customers would like to read content-based blogs to decide whether to purchase a product. But in Chile, customers would prefer checking review sites instead of believing the contents of individual blogs.


Also, consumers in Brazil or Mexico tend to trust articles more than posts or advertisements on social media. Articles that related to latest news would be more effective to attract customers.


Therefore, it is important to provide a unique product page that is translated into the local language. Because Latin American consumers prefer to check to search and check products in their first language instead of English.


Different language distribution in Latin America
source from wikipedia



- Shipping


When it comes to shipping, the biggest problem for Latin American shipping lines is always the long shipping time. Unreliable postal service, complex customs policy, and limited shipping routes, all these factors make shipping products to Latin America become a difficult task.


Thus, sometimes customers may need to wait an extra 1-2 weeks to get the product they ordered. So even though most shipping companies say it would take 2 weeks of estimated shipping to deliver the product, the shipping time can still be extended.


So in order to provide the best shopping experience for customers in Latam, it is important to work with an experienced and professional shipping company. If necessary, the dropshipper can also consult or hire a local dropshipping expert to get the latest shipping information and local policy updates.




- Products


For Latin American customers, when they receive products that do not match their expectations, it is highly possible that they will return the product or even ask for a refund. So before dropshippers decide what to ship, it is essential to check the quality and appearance of the products.


If it is too difficult for the merchant to check the product directly, the merchant can also ask the shipping company or a trusted dropshipping agent to ensure the quality of the products. 


And it would be better if the supplier can provide aftersales services such as returning or refund if the customer really received problematic products.


Final Words


Opportunities always come along with challenges, the crucial thing is if you are careful and determined enough to get yourself well armed before testing the water.


Nowadays, more and more people all over the world are not only shopping for a product but shopping for an experience or even an idea instead.


This is the same for people in Latin America as well. In Brazil and Mexico, companies that support charity projects or sell eco-friendly products would more likely be welcomed by the local community.


So when eCommerce business owners expand their business into these regions, putting a purpose at the forefront also becomes a helpful marketing strategy.



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