Globally, the COVID-19 pandemic heightened consumers’ trust and use of ecommerce for shopping. In Latin America, the pandemic actually helped jumpstart retailers’ and consumers’ ecommerce use in their day-to-day business or shopping behaviors.
That ecommerce adoption lifted up Latin America to have the strongest five-year compound annual growth rate (CAGR) in 2022 compared with the other regions Digital Commerce 360 tracks: North America, Europe and Asia. Though Latin America’s e-retailers volume of sales remain significantly smaller than the other regions, its strong growth indicates that this region’s ecommerce growth will be recognized more by international ecommerce players as an opportunity to expand their digital revenue.
Though the past five years have been transitional for Latin America’s economy, it makes us wonder: How has Latin America been able to outpace robust ecommerce economies like North America, Europe and Asia?
Digital Commerce 360 breaks down how this growth occurred by reviewing the regions’ five-year CAGR by overall growth, average growth, median growth and the regions mode.*
Latin America ecommerce growth
Latin America had the highest overall five-year CAGR (22.7%) in 2022. Its retailers’ combined growth is relatively consistent within the top 250, noted by the proximity of the average and the median.
Yet the concentration of the region’s top five online retailers with the highest growth makes it top heavy, skewing the overall growth up to the highest of all the regions. When these five are removed from the calculation, Latin America’s overall CAGR drops 3.5 basis points to 19.2%. Comparing the same calculation to North America, if the five highest CAGR growth retailers are removed, the overall CAGR still remains the same.
North America ecommerce growth
The average five-year CAGR of 21.4% and median of 18.0% are the highest compared to the other regions. However, North America’s overall five-year CAGR growth (19.7%) is not.
Additionally, the region’s average and median are relatively close together. This indicates strong growth across the top 250. Yet the most repetitive CAGR for North American retailers is 12%. And that’s much lower than the median. This, along with North America’s Top 250 retailers having more e-retailers with a negative growth, second to Asia, appears to keep North America from having the overall strongest five-year CAGR compared to the other regions.
Europe ecommerce growth
An interesting trend about Europe’s measurement is the distance between its average (16%) and median (12%). Meanwhile, the difference between the median the mode (11%) is just one point. This supports the trend that there are 125 retailers with stronger growth than the median, which are substantially outpacing the slower-growth retailers. That’s a positive indicator for Europe’s online sales.
Asia ecommerce growth
Five-year CAGR growth measurements are relatively close to each other. This indicates the growth of its e-retailers were consistent, with no major outliers.
Asia did have a handful of retailers with a negative five-year CAGR . That lowered its overall and average five-year CAGR, but removing those retailers still places Asia’s overall CAGR lower than Latin and North America ecommerce growth. An interesting note is how slow Asia has been over the past five years across the board regarding overall, average and median growth rates.