Shipping Consumer Electronics to Latin America: Everything You Need to Know

Submitted by Blog Editor on Mon, 10/22/2018 - 00:00
Shipping Consumer Electronics

For companies interested in shipping consumer electronics to Latin America, today’s market and logistics landscape presents new opportunities and old challenges. Like U.S. consumers, Latin Americans are opening their wallets for the latest gadgets—and they’re more than willing to look abroad for new brands and products.

 

Heightened Demand for Consumer Electronics

In 2017, the global market for consumer electronics amounted to nearly $1.2 trillion, and it’s expected to rise to over $1.7 trillion in the next six years. Countries in Latin America and the Caribbean imported over $148 billion in consumer electronics in 2017, with Mexico alone importing nearly $86 billion of goods in this category. In fact, Mexico was the 8th-largest electronics importer across the globe in 2017. Even smaller countries like Honduras (up 80%) and Nicaragua (up 71%) have demonstrated rapid growth in imports in this sector since 2013.

Though the region represents a small portion of the overall global consumer electronics market, many factors are emerging that will drive increased consumer demand in the near future. These include:

  1. Increased Access to the Internet

In 2016, around 56% of Latin America’s population had access to the Internet, but that number is expected to climb to nearly 61% by 2019. The rapid growth in Internet usage throughout the region is driven by smartphone adoption.

Between 2011 and 2018, smartphone usage increased from 39.1% of the population to 43.2%. While smartphone sales are helping to drive the growth in Latin America’s consumer electronics market, it’s at the expense of single-use items like digital cameras. Smartphone adoption is also driving another part of the equation, e-commerce sales.

Smartphone demand is helping drive consumer electronics sales.
Smartphone demand is helping drive consumer electronics sales. - Image source

 

  1. E-Commerce Adoption

Latin America is among the hottest regions for e-commerce growth. This status is hard to argue considering the region’s forecasted 19% growth in e-commerce shopping.

For many Latin Americans, the big e-commerce retailers are new arrivals. Chinese e-commerce giant Alibaba has only been in Mexico, Brazil, and Chile for a few years, but its online platform, AliExpress.com, is already showing high sales in consumer electronics. Amazon, on the other hand, only just made electronics available to Brazilian consumers in 2017 after five years selling in the country.

As these giants become more established, Latin American consumers will likely get more comfortable purchasing electronics online.

  1. Disposable Income

Every year, more Latin Americans join the middle class and have disposable income to spend. While imported goods can often cost more than locally available brands in many categories, including tech, Latin Americans tend to prefer global brands over local ones. With more disposable income comes more choice, and smart foreign brands can capitalize on consumer desires.

Thanks to a lack of local manufacturers in the consumer electronics space, Latin American consumers have little choice but to look abroad for their tech gadgets. With the rise of e-commerce, especially in emerging markets, it’s now easier for consumers to discover new brands and research purchases. Add to that the fact that popular tech products (smartphones, laptops, tablets) from global brands like Apple are exorbitantly expensive when bought locally, and it’s no wonder why international purchases are on the rise. International consumer electronics companies thus have more opportunities to connect to new customers in the region before they head to a local retailer.

 

Apple products are popular e-commerce buys among Latin American consumers.
Apple products are popular e-commerce buys among Latin American consumers - Image Source: Julian O'hayon on Unsplash

 

The Challenges of Shipping Consumer Electronics to Latin America

Shipping consumer electronics to Latin America adds an extra layer of responsibility and risk for foreign retailers: these items are often of higher value, and customers’ expectations will be high.

While many people think of Latin America as a homogenous unit, if you’re going to be shipping consumer electronics to Latin America, it’s important to understand the regulations and processes for each individual country. Unlike the EU or the U.S., Latin American countries don’t share uniform trade policies or tariff schedules.

The logistics process is often the key determining factor for the success of e-commerce companies exporting to Latin America. Here are some of the top logistics challenges to consider when shipping consumer electronics to Latin America:

  1. Fragmented Logistics Processes

From the different customs processes in each country to the “lack of end-to-end responsibility” for packages, shipping to Latin America requires due diligence and the right logistics partner to navigate the complexities.

  1. Luxury Taxes

Imported electronic items over a certain value may face steep tariffs. The taxes, meant to protect local brands, can make entering into certain countries like Brazil more difficult.

  1. Navigating Returns

Returns are a headache for cross-border consumers, and few international companies have return policies that engender goodwill between customer and brand.

  1. Unbanked Populations

It is estimated that nearly half of the population in Latin America does not use banks. However, mobile money and payment services are quickly working to fill a need for those consumers who operate in cash only, and the potential for penetration by 2022 is promising.

 

Finding Success Shipping Consumer Electronics to Latin America

To overcome the challenges of shipping consumer electronics to Latin America, retailers and distributors need a logistics partner familiar with the region and the regulations in each country. SkyPostal has decades of experience in Latin America and has developed trusted relationships with local couriers to ensure that your customers get the best logistics experience possible.

Contact us today to see how we can help you tap into Latin America’s demand for consumer electronics.