Latin America has become a region with great potential for growth and development in the digital arena.
Thanks to internet access, many people have benefited from technological advances and important initiatives to promote digital entrepreneurship.
In this publication, we will give you an overview of the situation of digital growth in Latin America, the characteristics of the region, and why it is so attractive to expand the business.
Accelerated digital evolution
Quality Internet access and digital growth in South America is both a challenge and an opportunity to boost productivity, provide better services in the region, access new products and services, and connect the region to the world.
Although digital growth in Latin America was steady in the last decade, digital transformation accelerated due to the COVID-19 pandemic. Teleworking, the rise of e-commerce, delivery applications, and online banking have increased the reach of the Internet and connectivity ever more significantly in this crucial region.
With the increase of digital shoppers, e-commerce users in the Latin American region grew from 126 to 267 million shoppers in the last 5 years (more than double!). Although the COVID -19 pandemic has increased this growth, the trend was already accelerating.
Driven by the isolation measures, e-commerce in Latin America soared in the last year, where, according to the Global Ecommerce Update 2021, it had a growth of 36.7% over the previous year.
Brazil and Mexico are the leading countries in online sales, with a turnover of more than US$17 billion and US$14 billion respectively. Argentina and Colombia are not far behind, taking advantage of the strengthening of companies such as Amazon and Mercado Libre, the latter becoming the company with the highest valued company in the region.
Digital growth in Latin America has evolved, thanks to efforts to promote digital entrepreneurship. The young and dynamic market in Latin America has become the home of different unicorns of technology such as Nubank, Rappi, 99, Ebanx, and many more startups.
In terms of digital entrepreneurship, Brazil, Colombia, and Mexico are countries that lead the investment in startups, according to the World Economic Forum, 4.6 billion dollars were invested in 2019 to promote this culture of digital entrepreneurship and help generate solutions for different areas in the region.
Big companies are looking at LATAM as an attractive market
A survey conducted by Ebanx and Market intelligence firm Ipsos showed that 58% of surveyed global merchants sell their products outside of North America, with nearly half in Latin America.
The region is attractive for investors and large companies that dream of conquering new users and potential customers to consume services through digital channels.
Streaming content is one of the big players
For the content giant Netflix, Latin America represents the third most important region by the number of subscribers, with a total of 36.07 million users in the market. Brazil is the second country with the highest number of subscribers, with a total of 16 billion users. For OTT and VOD companies, LATAM is becoming a can’t miss opportunity.
According to the Colombian Communications Regulatory Commission (CRC), 24% of Colombians had paid for video transmission in the past year. The study also found that Netflix is the leading platform in the country with 17%, followed by Claro Video, HBO Go, and DirecTV.
Streaming music has also been a protagonist in the digital growth of Latin America. The reception has been so great that Spotify has worked on adapting local content. Latin America represents the third most important region for Spotify with 21% of subscribers in the world.
According to data from the Digital in 2021 survey, countries such as Mexico, Argentina, Brazil, and Colombia lead the percentage of users who consume TV content through streaming services with an average of 89.9%, well above the global average of 70%.
Surely none of these advances in digital growth in Latin America would be possible without a quality internet connection that allows users to access it. That is why it is also essential to know the situation of Internet penetration in Latin America.
According to the Internet World Stats Report, created in partnership with ECLAC for 2020, Internet penetration in Latin America was 71.5%. Although it is above the world average, there is still an opportunity to allow more and more people to have access, taking as an example the more developed regions such as North America, with 90.3%, and Europe with 87.2%.
According to Statista, Brazil is the Latin American country with the most internet users. There are 160 million people connected, thus representing 68% of the Brazilian population.
In second place is Mexico, with 92 million users, followed by Colombia and Argentina, with a connected population of 45 million. If we look at this information considering the number of inhabitants in each country, Chile and Uruguay lead the region in internet access with 81.6% and 79.4% respectively.
The renowned website for measuring Internet speed, Speedtest, has presented a report in which it reveals that there is a great opportunity for growth in connection speed in Latin America. It is important to note that the study analyzed only the speed and not other components such as latency, price, or the courtesies that the service may have.
Mexico is one of the Latin American countries with the best Internet speed (26.57 Mbps), however, it is important to note that it is still not ideal speeds considering the great leaders of the list, South Korea and Qatar with 112 Mbps and 75 Mbps respectively.
Challenges for digital growth in Latin America
Latin America has accelerated its digital processes. However, there is still a long way to close the gap in internet access and quality infrastructure to ensure low latency connection and access for all.
At EdgeUno, our mission and work are to achieve a high-quality Internet connection in Latin America, allowing users to access the new content and with it, the development of the region with the growth of connectivity.
With the creation of customized networks throughout Latin America, serving organizations, we pride ourselves on having one of the lowest latencies in the market and one of the best-connected networks: AS 7195. Our data centers provide network infrastructure availability, 24x7x365 support, and extreme security.
EdgeUno works for digital growth in LATAM
Large companies find in Latin America a unique opportunity to expand their business. It is essential to have a partner who knows the region, its cultural differences, its legislative rules, and a solid and robust network and infrastructure to deliver content.
At EdgeUno, we are the key to Latin America for media, gaming, and other digital content companies that want to enter and conquer the region.
If you want to know our highly personalized solutions, get in touch with us, we will be happy to help you.