gauging the impact of coronavirus on latam e-commerce · 2020-03-26 · retail travel digital goods...
TRANSCRIPT
March 2020
Americas Market Intelligence
Gauging the Impact of Coronavirus on
LatAm E-Commerce
AMI is the leading analytical voice in Latin American sectors:• Payments• Logistics• Consumer services• Natural resources• Industrial• Healthcare
Leading advisory group for companies operating in
Latin America
27 years experience in the region
Full coverage of Latin America and the
Caribbean
Our teams have executed
3000+ projectsIn Latin American &
Caribbean markets
since 1993
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Legal Notice
The opinions and analysis presented today by Americas Market Intelligence (AMI)
represent only the views of the AMI speaker(s)
and not of the panelists who are participating in today’s webinar or their respective companies.
Whenever possible, AMI has verified the accuracy of the information provided by third parties, but does not under any
circumstances accept responsibility for such inaccuracies should they remain unverified.
It is expected that webinar attendees will use the information provided in this webinar in conjunction
with other information and with sound management practices. AMI therefore will not assume responsibility
for commercial loss due to business decisions made based on the use or non-use of the information provided
in today’s webinar.
Webinar agenda
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Introductions
• A global view on e-commerce
• Coronavirus and Payments
• Coronavirus and Logistics
• AMI resources
• Q&A
Introductions
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Today’s presenters
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And moderated by Abel DelgadoAMI Digital Marketing Director
Jaqueline BartzenHead of Global Merchant
Engagement @ EBANX
John PriceAMI Managing Director
Lindsay LehrPayments Practice Director
Diego RodríguezLogistics Practice Director
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2019-2023 LatAm E-commerce reportForecast considering impact of COVID-19
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Tailored monitoring of your industry trends
AMI-moderated strategic planning session
Poll question #1
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What kind of company are you?
Bank, card network or
payments processor
E-commerce merchant
or marketplace
Fintech or
technology company
Logistics
services provider
Consumer packaged
goods brand
Consumer
services brand OtherBuyer of logistics
services
A global view
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Coronavirus cases in Latin America
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Latin America has enough hospital beds and clinics but not enough ICU beds and ventilators
5-day trailing
daily avg
growth rate
(03/28/20)
Country
How many
days ago
was 100th
case?
Active cases
3/26/20
*Total cases
4/2/20
*Total cases
5/02/20
5-day trailing
daily growth
rate
(05/02/20)
% of basic
hospital beds
to be
occupied by
COVID (25% of
cases)
% of ICU beds
to be
occupied by
COVID (4% of
cases)
26% Argentina 6 502 2,348 110,459 5% 4.7% 142%
23% Brazil 11 2,554 10,499 598,443 8% 9.7% 272%
25% Colombia 7 470 2,054 68,167 5% 6.9% 211%
21% Chile 9 1,142 4,015 51,925 3% 9.5% 277%
15% Mexico 7 405 1,236 21,264 5% 0.9% 28%
13% Peru 8 480 1,222 9,163 2% 1.3% 44%
18% Switzerland 19 10,897 26,552 98,022 1% 18.9% 206%
12% Taiwan 7 235 473 1,379 1% 0.1% 2%
7% Iran 28 27,017 43,054 120,350 1% 7.4% 294%*Case number projections assume that each country maintains strict social distancing policies till the end of April 2020
Sources: ECDC, World Bank, AMI analysis
Latin America COVID vulnerability versus other regions
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Latin America is ill-equipped for both the health and economic challenges ahead
Demographicvulnerability
Political/culturalvulnerability
Economicvulnerability
Reboundvulnerability
LatAm
USA
Eastern Asia
Europe
% Pop
over 75
Germany USA China Brazil
11.3% 6.7% 4.7% 3.6%
Overall
vulnerability
EU USA E. Asia LatAm
Med-high Med-high Low High
Sources: World Bank, AMI analysis
Sources: AMI analysis
2020 GDP forecasts
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Latin America will lag leading economies in its recovery from COVID-19
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
Q1 - 2020 Q2 - 2020 Q3 - 2020 Q4 - 2020 Full year - 2020 Full year - 2021
Y-O-Y GDP Growth Forecast – 2020 - 2021
LAC EU USA China
Sources: GS, DB, BBVA, JP Morgan, AMI
Other markets provide some guidance on e-commerce disruption
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COVID-19, like SARS did for China in 2003, will prove a catalyst of change for e-commerce buying habits in the Americas
SARS (2003) → 50% growth for Alibaba. COVID-19 →22% growth in Jan/Feb 2020 in China
Delivery of physical goods(food, pharma, pet food, cleaning
products, screen devices)
COVID-19 → 95% drop in Chinese business travel (mid-Jan to mid-Mar 2020) Online travel(plane tickets, hotel reservations, car
rentals)
COVID-19 → Microsoft ‘Teams’ sales jumped 500% in China in Q1. Q1
Zoom usage up 30% worldwide. Netflix non-US sales to jump 31% in Q1.
Rappi Colombia sales in 2nd week of March up 40%. US e-comm/retailers
to hire 750,000 for home delivery. Uber sales down 70% in US in March.
Digital Goods(Entertainment, Communication,
Education, home delivery,
transportation)
Poll question #2
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Compared to 2019, how much do you expect your business to grow,
considering the coronavirus?
Will shrink by 30% or more
0% to -30%
Around 0%
Will grow up to 10%
Will grow by more than 10%
0-100 100
Coronavirus and payments
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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
YoY growth in 2020
Retail Travel Digital goods Overall
Redistribution of e-commerce spend in 2020
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0%
-92%
35%
Major disruptions in March and April, creating a total market decline of 12% YoY in overall e-commerce in 2020
52%
16%
32%
Dec 2020 breakdown
Retail
Travel
Digital54%28%
17%
Jan 2020 breakdown
Retail
Travel
Digital
Sources: AMI analysis
Some return to normalcy in 2021, with some caveats
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Some permanently changed consumer behaviors based on a new paradigm
2021 growth over 2019
Delivery services
Buying essentials online
Virtual content, entertainment,
socializing, communication
Retail 6%
Travel -6%
Digital 35%
Overall 23%
(compared to 43% pre-epidemic)
Other payments industry opportunities
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Mobile/neo banking Credit and installments
Now is the time to push education of remote payment and banking opportunities
Promoting contactless
PANEL DISCUSSION With Jaqueline Bartzen
of
EBANX
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The Impacts of COVID-19
on the e-commerce and logistics industries in
Latin America
Presented by:
Diego Rodríguez
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The Impacts of COVID-19
on the e-commerce and logistics industries
in Latin America
Presented by:
Diego Rodríguez
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The perfect storm for logistics disruptors
• Last mile firms and delivery apps are forcing employees to make contactless
deliveries in CO, AR, CL
• Delivery apps are discouraging the use of cash to reduce the risk of
contagion
• Guaranteeing safer delivery standards could mean thriving while others go
bankrupt
• Supermarkets in the region promote phone and online orders for home
delivery
Delivery apps allowed to continue
operating
Mandatory home isolation as of March 25th
Last mile firms allowed to continue
operating
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March 16th signaled the beginning of drastic measures in LatAm
Borders closed for passengers
Borders closed for goods and trade
Reduced air freight capacity
grounded 95% of its fleet
slashed 50% of its international flights
Only cargo/military
planes are permitted to
land/depart
cut 70% of its flights
Cancelled all
international flights
except special flights to
rescue Argentines
stranded abroad
As
of
Marc
h 2
0th
• Cross-border e-commerce is the most impacted as it
relies heavily on belly freight
• Logistics players with own assets are better prepared to
serve customers that will switch to air from ocean
freight
• Delays in LAC customs are starting to kick-off as
government agencies workforce is reduce because of sick
staff and furloughs of workers at high risk of contagion
cut 70% and Gol All of its Int flights
The disruption of supply chains in LatAm follow a domino effect
Ford, GM, Mercedes, Honda and Bridgestone
among others began suspending operations on March 23rd in AR, MX, BR
Textile producers in El Salvador, Colombia and Peru face stockouts of yarn,
thread and fabric imported from China and Asia to produce apparel
• Factories in BR and MX start to shut down because of stockouts while consumers
stockpile goods
• Start planning for the eventual recovery. Which products are going to be bought? How
you can adjust your service/product offering to strive where others fail?
• Trend toward the decentralization of supply chains and alternative sources for materials
• Invest on how the future will look like
Poll question #3
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a. Accurate e-commerce volume forecasts
b. Accurate logistics industry forecasts
c. Accurate GDP and consumption forecasts
d. Monitoring of best practices to deal with the crisis
e. Individualized consulting
f. Virtual conferences for your company
g. Help with adjusting your strategic planning for 2020 and
beyond
What type of information
would be most helpful to you
right now?
Next steps
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Let AMI help guide your next steps at this critical time
2019-2023
E-commerce
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forecast considering the
impact of COVID-19
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26
And moderated by Abel DelgadoAMI Digital Marketing Director
Jaqueline BartzenHead of Global Merchant
Engagement @ EBANX
John PriceAMI Managing Director
Lindsay LehrPayments Practice Director
Diego RodríguezLogistics Practice Director
[email protected]@americasmi.com [email protected] [email protected]