Many international companies are considering shipping to Peru, one of the star economies in Latin America in the 21st century, to expand their business. Despite the global economic downturn, Peru has maintained a stellar record. According to the World Bank, “Peru has been one of the region’s fastest-growing economies, with an average growth rate [of] 5.9 percent in a context of low inflation (averaging 2.9 percent).”
There’s a lot to love about the country beyond the numbers, though. If you’re shipping to Peru it’s worth getting to know the nation a little more in order to ensure the best possible business experience.
Spotlight on Peru
Peru is a large country— roughly twice the size of Texas— sitting on the western coast of South America. It shares borders with Ecuador, Colombia, Brazil, Bolivia, Chile, and the Pacific Ocean. While Peru is perhaps most famous for the historic Machu Picchu and Inca Empire Trails, the country is growing into a regional economic powerhouse.
With over 32 million people living in the country, Peru is the fourth largest country in South America. It’s surprisingly diverse, thanks to a mix of native populations, its colonial settlers, and the influx of European and Asian immigrants in the last two centuries.
With such a large geographical expanse, the population isn’t very dense, counting only 25 people per square kilometer. But nearly a quarter of the population—over 8 million Peruvians—lives in its capital city, Lima, and the surrounding metropolitan area. Lima’s population is equal in size to New York City. With a growing economy and room for people to expand, Peru’s population growth has been one of the fastest in the world in recent decades.
For the majority of the population, Spanish is the primary language. But thanks to Peru’s large and diverse indigenous population, indigenous languages like Quechua and Aymara are recognized official languages in certain regions, and there are over 150 more recognized languages in the country. In some parts of Peru, there are languages yet to be discovered because tribes have never been contacted.
Peru has incredible geographic and biological diversity throughout the country, from the Amazon rainforest to the highlands of the Andes mountain range and down to the coastal region where large cities like Lima reside.
Like many Latin American countries, Peru experienced authoritarian rule and guerilla warfare during the 20th century. But today the Peruvian government is strongly democratic by many measures and is committed to the global economy.
Thanks to Peru’s geographic and biological diversity, the nation’s economy is bolstered by many different industries. Peru’s top exports include copper, gems, petroleum, coffee, fruits, fish, and clothing.
Peru’s economic growth after 2000 has been impressive. Between 2005 and 2013, half of the country’s impoverished population was lifted out of poverty (from 52% of the population down to 26%). Since then, the country has had more moderate growth, which is expected to pick up in 2018 and 2019 thanks to increased domestic demand and rising public spending. Alongside Chile, Peru is helping buoy the region’s economic forecast thanks in large part to growing consumer spending.
Peru has also helped drive free trade agreements locally. Alongside Mexico, Chile, and Colombia, Peru helped organize the Pacific Alliance (Alianza del Pacífico), which is dedicated to free trade and cooperation in the region. Beyond regional agreements, Peru has many free trade agreements with countries around the globe, including the U.S. and the European Union. For the U.S., Peru represents the 32nd largest export market, valued at over USD 8 billion. Since the free trade agreement between the two countries in 2005, trade between the U.S. and Peru has increased nearly 250%.
Peru’s currency is the nuevo sol (Symbol: S/.) and can be found in denominations of 10, 20, 50, 100, and 200, alongside a variety of coins ranging from one céntimo to 5 nuevos soles. Despite being the national currency, many businesses and banks accept U.S. dollars, particularly in areas frequented by tourists. Still, the primary economic driver is the nuevo sol. Of all the national currencies in Latin America, the nuevo sol has been the most stable.
Thanks to the country’s economic growth throughout the past few decades, many more Peruvians have extra nuevos soles to spend on discretionary goods. Increased consumer demand is making Peru an attractive new market for many companies, which is one of the reasons why businesses of all sizes are shipping to Peru.
Doing Business in Peru
Peru’s ascent on the global economic stage has taken place quite recently, and as such the country is still undergoing many growing pains. Nevertheless, there are economic benefits for international companies looking to export into Peru.
There remains a relatively low level of internet penetration in the country, but this is quickly changing. Nearly two-thirds of the country has access to the internet, much lower than other top Latin American economies like Argentina (93%) and Uruguay (88%). With the majority of the population (55%) under the age of thirty having grown up using the internet, the future of e-commerce in the country looks bright. The amount of growth in e-commerce shopping in Peru is, according to livinginperu.com, one of the reasons why the country should be seen as a market with growing potential.
In the last two years, e-commerce has grown 198% in Peru to USD 2.8 billion in sales. Like many Latin Americans, the majority of Peruvian shoppers are purchasing via mobile devices including smartphones and tablets.
Peru’s economic growth isn’t without its challenges though. According to world rankings for ease of doing business, Peru ranks 58th overall—comparable to Chile, Colombia, and Israel. While Peru ranks high for being able to get credit (20th), it scores less favorably for starting a business (121st), paying taxes (121st), and trading across borders (92).
This is in large part due to “cumbersome bureaucratic procedures” including complicated and backed up legal proceedings as well as political challenges. The good news is that e-commerce retailers shouldn’t be affected by most of these issues when shipping to Peru.
Top Products for E-Commerce Sales
E-commerce sales from international retailers are quickly growing, especially among young adults between the ages of 18 and 25, 77% of whom have internet access. Peruvian consumers are most interested in purchasing online:
Digital/computer accessories and applications (38%)
Clothing and footwear (30%)
Shipping to Peru
Due to to Peru’s diverse geographic system, the location to which you’re shipping in Peru makes a big difference in the cost, reliability, and speed of delivery. Many people shipping to Peru will run into the postal system known as SerPost.
Like some other Latin American countries, when shipping to Peru you’ll find that many addresses lack postal codes with the exception of the cities of Lima and Callao. In most cases, small packages and mail are delivered directly to the physical address, but larger boxes require pick up at the SerPost office. Reliability of delivery is much better in big cities like Lima.
Last Mile Delivery
One of the challenges of SerPost is the last mile, where issues can arise. Packages with contents valued at over USD 100 are more likely to be opened at customs, and small packages can get lost.
The reliability of final mile delivery suffers as you get further away from the big cities. For companies shipping to Peru, sending packages through a carrier like SkyPostal that provides door-to-door package tracking can help improve the final mile experience compared to the local postal service.
Customs remains a tricky spot for foreign exporters. Delays in shipment are not uncommon, although the situation is improving. Despite being part of many free trade agreements, Peru’s customs process is still relatively expensive. Border compliance and document compliance costs are higher than many other Latin American countries.
All shipments, regardless of value, require a commercial invoice and a copy of the consignee’s national ID, known as the DNI The requirements for invoices are very specific, so make sure to include all necessary components.
Unlike many countries, Peru doesn’t have a de minimis value for imported goods, meaning the entire price of the commodity is eligible to be taxed. This can result in higher costs for consumers, and can be a barrier to sales on goods with high duties.
Resources for Shipping to Peru
Peru is a growing country and one of the highest-potential markets in Latin America. Thanks to the country’s rock solid economic record in the past two decades, Peru is on track to further develop its infrastructure and grow its middle class. E-commerce demand will continue to increase as Peru’s youthful population matures.
If you’re unfamiliar with the country and are considering shipping to Peru as part of your company’s expansion into Latin America, export.gov’s Country Commercial Guide is a great starting place to learn about the ins and outs of doing business there.
Any company shipping to Peru should count on experienced assistance to break into the Peruvian market. With decades of experience shipping to Peru and the rest of Latin America, SkyPostal can provide your business with:
The largest private delivery network in Latin America
Fully trackable packages
Integrated data and tracking management
Customs clearance and duty collection
Contact us today to see why SkyPostal has been trusted for years by some of the world’s largest retailers to make shipping to Peru a reality.