Why a Local Strategy Matters in LATAM

Latin America has been the fastest-growing eCommerce region in the world in 2020, with retail eCommerce sales increasing by 37%. According to different sources, the region is also expected to grow by 66% between 2019 and 2023. Customers around the region have slowly made the switch to online shopping throughout the pandemic, and online consumption is becoming the new normal. In the emerging markets of LATAM, digitization is catching up: eCommerce, digital payment methods and home delivery services are becoming increasingly popular, and are showing strong signs of a change in purchasing behavior.

Furthermore, the COVID-19 pandemic seems far from over in the region. At the time we are writing these lines (April 2021), the Latin American region is still battling the pandemic, with Brazil having by far the highest overall death toll in Latin America. In recent weeks, about a quarter of all COVID-19 deaths in the world were in Brazil, and the Brazilian public health institute Fiocruz declared there were 92 variants of coronavirus in the country.

As we wanted to learn a bit more about this geographically massive and equally interesting region, we reached out to Cristian Gallardo, an expert in business expansion focusing on Latin America. Cristian Gallardo has over 9 years of experience growing technological companies in the Latin American market. He implemented the Go Local strategy for the LATAM region at Avast Software, making Avast antivirus the largest consumer security product in the region, reaching over 85 million users. Cristian Gallardo is now the Co-Founder and CEO of Pulsoline, and he leverages his marketing and eCommerce regional expertise in order to address the challenges companies are facing when expanding into LATAM.

Cristian, could you tell us a bit more about your experience in LATAM?

“I am going to share with you a story that began in September 2016. I was entrusted by Avast software to build the business strategy for Latin America, in order to take advantage of the region’s booming potential. Based on my previous experience in LATAM, I suggested to roll out a Go Local formula: my customized business recipe for the region. Latin America is a fruitful yet particular region. It is not that easy to expand your business there if you don’t have the right approach. In fact, it is more than necessary to have a local approach when tackling a region with more than 30 countries and 630 million people.

When expanding abroad, the most common mistake is to think that a global approach will work everywhere. I would even argue that a single approach for the whole LATAM region will not work. Many countries within the region do have a common language and a similar culture, but that doesn’t mean they have the same purchasing behaviors. So, I decided to create a four-pillar strategy including the following: Go-to-Market strategy (local knowledge) + Branding (local content) + Lead generation (local channels and local approach) + Monetization (based on local buying needs and behaviors).”

Which one of these items did you focus on first when entering the Latin American market with Avast?

“The answer is simple: Monetization. It might sound counterintuitive, but Latin America always shows poorer results than developed countries when it comes to eCommerce sales. This is changing gradually with the pandemic as Latin Americans decided to dust off their credit cards and take their purchases online, bringing the eCommerce sector to levels never seen before. However, even with the COVID-19 behavioral changes, I still see Monetization as the most important issue to tackle. In my case, it was important to convince management and decision-makers of the region’s potential, so we could further invest in Latin America. It is always easier to negotiate higher investments when you show a return on the initial investment.

Therefore, my first project was to optimize the conversion funnel in the key countries with A/B tests, local content, local trust symbols, local payment methods and many other twists in order to eliminate any potential friction during the purchase. By showing a strong growth in sales, it was then easier for me to request some budget for the other pillars that help get the brand closer to the Latin American users.

Overall, as a piece of advice, eCommerce companies need to have local experts A/B testing all parts of the customer journey continuously with an A/B test calendar plan, so they can understand what is working best in the region. When it comes to improving the conversion and monetization, we were even running ABCD tests in order to assess several hypotheses at the same time.

The whole customer experience should be thought through before even localizing your marketing and advertising efforts. Otherwise, you will optimize your acquisition funnel, but you won’t optimize your sales and your retention rate.

What was the most important change you made? The one that had the biggest impact?

“The array of optimizations I made was wide, but the most important change was without a doubt related to the checkout: The introduction of local payment methods in the key markets' carts (Brazil, Mexico, Argentina, Chile, Colombia and Peru), as well as adding local preferences such as the possibility to pay by installments, or adding local trust marks. The first hints of success came in 2017 when our Go Local strategy boosted the checkout conversion by 15% in Mexico, and 25% in Argentina, Chile and Colombia. That was the starting point for Avast becoming a pure customer centric brand with a Go Local DNA.

The goal of an eCommerce expert is to keep testing and trying new things in order to constantly improve the checkout conversion. Softline Ecommerce was one of my last iterations, obtaining great results and moving the checkout conversion to the next level.”

Do you have a final word to conclude the discussion?

"The bottom line is that companies that want to expand into LATAM need to roll out a local strategy and remove friction throughout the whole customer journey, so they can optimize their business expansion. Using the Go Local Methodology, we have helped many companies successfully expand into countries like Brazil, Mexico, Colombia and Argentina.

And, if you think it’s too late to enter Latin America, think again. The digital revolution is just starting in the region, with the internet usage being on the rise. In January 2021, 72% of South Americans were using the internet and this number keeps rising (by 5% year-over-year actually in January 2021). But, let’s not forget that around 200 million people in Latin America still do not have access to the internet . The potential for growth is still enormous!

Finally, around 11 million consumers made an online purchase for the first time in 2020 in LATAM. So, there are a lot of new consumers that are going online. This is a massive potential for online businesses!”

Cristian Gallardo Co-Founder and CEO Pulsoline Ex-Regional Manager Latin America for Avast software


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