Latin America (LatAm) has a culture that has been known for its face-to-face business transactions, with its own set of essential etiquette and local-savvy buying practices. With the integration of both technology and globalization, however, that tide is starting to turn and the region is flocking to online retail in droves.
The pandemic accelerated this shift. It was estimated that 13 million people across LatAm made an online transaction for the first time just last year, causing eCommerce in the region to be boosted by 36.7%, equaling around $85 billion USD.
With more than 10 million people who never bought online now doing so regularly, LatAm is locked and loaded to take off in eCommerce. Considering their business culture to date, however, this large and sudden change begs the question of whether the region’s infrastructure is ready. This will cause businesses across the retail spectrum, from suppliers to the delivery companies at the final leg, to implement digital efficiencies into their day-to-day operations.
Ready or not, the change is coming and with it, logistics companies will have an opportunity to provide innovative solutions for the LatAm supply chain.
Mexico City’s Cargamos is a company geared at accomplishing just that with its end-to-end logistics platform that offers solutions for LatAm and beyond. On a mission to unlock the potential of e-commerce logistics in the region, let’s take a look at how this company is helping LatAm accelerate the adoption of e-commerce.
Patching the Existing Disparities in LatAm’s Supply Chain
One of LatAm’s biggest challenges in getting onboard with eCommerce has been the fact that the payment economy has yet to get on the digital interface. With the majority of the population unbanked, 230 million shoppers are unable to purchase online even if they wanted to, revealing some serious growing pains. Transactional basics like accessible payment first need to be resolved before the LatAm supply chain can truly evolve with the digital times.
Cargamos helps to patch this disparity by providing a zero-cost shipping method with the option for customers to pay in cash for their product upon delivery. With options such as “click and collect” or “buy now, pay later,” people without a credit card in LatAm can still order their favorite products and services online and pay in cash. This is crucial as it was shown that 80% of transactions in LatAm are still cash-based, so by empowering customers to transact with this payment method, steps toward success in eCommerce can be made in the region.
Even prior to the pandemic, last-mile delivery services were already the biggest cost-driver in the global supply chain, comprising 53% of costs overall. These last-mile shipping expenses can only be predicted to compound as we move into the future of online retail—with dramatic increases in the number of parcels delivered each day and raised customer expectations. With developing nations especially scrambling to keep up due to their lack of local infrastructure, last-mile delivery is beginning to become the key piece to success in eCommerce for growing regions.
Cargamos is innovating unique modern-day solutions for LatAm by creating a local micro-distribution network leveraging repurposed abandoned retail spaces and parking garages. The company assists in the final leg of the transport chain by creating a space to which packages can go once they arrive from abroad, mitigating the congestion at ports and distribution centers, and instead routing them to an intermediary where they can be more efficiently organized for final delivery.
Taking the concept behind this innovation even further, Cargamos continues the last-mile revolution through their proprietary Point of Delivery (POD) centers, self-sufficient mobile micro hubs for parcels. A first in LatAm, the mobile POD is specially designed to be easily relocated on-demand and operates out of any parking lot with access to sunlight thanks to solar panels.
By using electric vehicles and bicycles to achieve package delivery in less than three hours, the mobile POD allows rapid circulation of last-mile delivery drivers while using the least possible amount of CO2 emissions, according to the company.
Through all of these innovative solutions, Cargamos forges new horizons for sustainable and optimized delivery including increased proximity to consumers, a reduction in last-mile costs and emissions, and better flexibility in payment for customers and businesses. Working to eliminate the biggest roadblocks that currently exist for LatAm’s supply chain infrastructure, Cargamos is helping to create new avenues to which digital eCommerce can be achieved in the region.
A New Road to eCommerce
Adversity breeds innovation, and Cargamos has shown that creative e-commerce payment options and last-mile logistics technology can be key factors in unlocking eCommerce in LatAm. This is vital now more than ever as the region attempts to catch up with the rest of the world and has become the single fastest-growing regional eCommerce market on the planet.
In September, the company raised the largest seed round for a log-tech company in Latin American history and partnered with Mexico’s Secretary of the Economy to provide eCommerce shipping solutions to small businesses as well as the country’s largest retailers—showing the great potential in their pursuits for the LatAm supply chain.
A company on a mission to help the region overcome its roadblocks for growth in eCommerce, Cargamos is building a new road to success for LatAm’s economy via the online digital retail world.
Disclaimer: This article contains a client of Espacio’s Portfolio.