What the future of e-commerce holds for Peru?
E-commerce is quickly becoming the top choice for Peruvians. With that in mind, the Sherlock Communications team took part in the ninth edition of the e-Summit Peru e-Commerce, hosted by Lima Chamber of Commerce, a two-day event focused on discussing both the current state and the future of e-commerce in the country. Take a look at our insights.
What’s the current state of ecommerce in Peru?
Between 2020 and 2023, the number of Peruvians shopping online nearly doubled, jumping from 11.8 million users to 20 million, according to Statista. That’s a 70% increase in just three years.
This shift is also reflected in the way people pay. According to the Peruvian Chamber of Electronic Commerce (CAPECE), digital wallets have gained the most traction in recent years. By May 2024, they made up 27% of all transactions, a massive leap from just 3% in 2019.
Debit and credit card payments are also on the rise, though bank transfers haven’t yet overtaken cash-on-delivery options. This may be due to the high level of informality in the country and lingering distrust of online transactions among some shoppers.
Marketplaces are still the most popular platforms for online shopping, handling 50% to 70% of Peru’s total ecommerce. Without Amazon, Peruvians turn to regional platforms like Mercado Libre and Falabella. Technology remains the top-selling category.
Technological advancements
Over the past five years, digital transformation has driven the growth of ecommerce in Peru. As a result, staying ahead in the market will require businesses to embrace new technologies, with early adopters leading the way.
At the CCL’s e-Summit Perú eCommerce, artificial intelligence was highlighted as the technology set to have the biggest impact on the future of ecommerce. With its ability to analyze data, develop algorithms, and create machine learning models, AI will be key to cutting costs and streamlining operations for Peruvian companies. It’s also already being used in chatbots, which can assist customers in real time and answer their questions.
CAPECE also pointed out the strong presence of mobile ecommerce: 60% of online transactions in Peru are now made through mobile devices. This is largely thanks to the speed of mobile payments, the growing popularity of apps, and the widespread use of digital wallets.
Logistics and infrastructure
One of the biggest challenges for ecommerce in Peru is its heavy focus on the capital. Of the 42% of Peruvians who shop online, 70% are based in Lima, and the city accounts for 80% of the country’s total transaction volume, according to FLOW Pagos at the e-Summit Perú eCommerce hosted by the CCL.
As a result, Lima has the most advanced delivery services, whether through companies’ own systems or third-party providers. The future of ecommerce in Peru will depend on expanding these services to other regions and cutting down delivery times.
To make logistics more efficient, businesses will need to optimize transport routes, improve inventory management, and automate warehouse processes. The goal is to create a fast and smooth supply chain. Speed and reliability are crucial not just on ecommerce platforms but also in the final stage of the transaction: delivering the product or service.
Ecommerce infrastructure also requires a solid payment gateway. Unlike in the past, companies now need to offer a wide range of payment options to reduce the chances of customers hitting a “bottleneck,” where they abandon a purchase because their preferred payment method isn’t available.
The evolution of digital payments in Peru
Fintech has been crucial in the growth of digital payments in Peru. While ecommerce surged rapidly during the COVID-19 pandemic, it was the introduction of digital wallets by banks that helped build more trust among Peruvians in online transactions.
This payment method has also made ecommerce more accessible to lower-income individuals. At this year’s e-Summit Perú eCommerce, hosted by the CCL, it was noted that with a minimum transfer amount of just one sol, more Peruvians are turning to digital wallets for their transactions. Yape, in particular, has become the most popular option.
Another big factor is the rise of delivery services and ride-hailing apps, which are now some of the most widely used forms of ecommerce in the country. In 2022 alone, Peruvians booked an estimated 194 million rides and placed 43 million delivery orders, according to the Peruvian Institute of Economics.
By 2023, these apps accounted for 0.59% of the country’s GDP, contributing over 5.5 billion soles. This has sparked a major debate in Peru around the regulation and taxation of these services.
Current regulations impacting e-commerce in Peru
One of the standout regulations affecting e-commerce is Legislative Decree No. 1623, commonly known as the “Netflix Tax.” This law applies an 18% General Sales Tax (IGV) on digital services.
These kinds of regulations could significantly impact e-commerce in the coming years, potentially driving up costs for consumers. In some cases, companies may even be forced to stop operations due to these added expenses. A notable example is Uber Eats, which decided to pull out of Peru when additional rules for delivery services were introduced during the pandemic.
Peru also has Law No. 29733, the Personal Data Protection Law. In 2023 alone, the National Authority for Personal Data Protection issued fines of over 7.6 million soles after auditing 336 companies.
Data breaches are a major concern for businesses in Peru. According to a report by Azion presented at the CCL’s e-Summit Perú eCommerce, 98% of companies have experienced some form of data breach. This is largely driven by the 1,600 cyberattacks that occur every second in Latin America. These breaches can cost companies around $6 million each, along with the damage to their reputations.
Challenges and opportunities
One of the biggest challenges for the future of e-commerce in Peru is overcoming barriers to payment methods. While online shopping continues to grow, there’s still a segment of the population that’s reluctant to embrace digital money transfers.
According to the National Institute of Statistics and Informatics (INEI), only 60% of Peru’s adult population has a bank account, marking a 2.6% increase from 2023.
At the CCL’s e-Summit Perú eCommerce, it was revealed that the main reasons people avoid opening bank accounts are distrust in financial institutions, concerns about how their money is handled, and a desire to avoid paying taxes on their business activities. On the business side, the growth of e-commerce could help integrate this group into the financial system.
A big opportunity lies in leveraging omnichannel strategies, which let customers access the same products or services across different platforms, whether through an app, website, or physical store.
As businesses integrate payment gateways with omnichannel options, the Peruvian population that’s hesitant to use e-commerce may gradually come around. Seeing others trust electronic transactions and enjoy a seamless experience across all platforms could encourage them to adopt this new way of paying.
Future outlook
E-commerce in Peru is set to grow by 15% in 2024, according to the CCL, generating over $23 billion in economic activity. By 2028, Statista projects the market will expand by 66% compared to 2023, showing strong growth over the next five years.
At the CCL’s e-Summit Perú eCommerce, experts emphasized the need for companies to quickly adapt to the ever-changing e-commerce landscape. They highlighted trends like full commerce (offering end-to-end services), quick commerce (fast, on-demand service), omnichannel strategies, artificial intelligence, conversational e-commerce (using chatbots to assist with purchases), and the increasing popularity of digital wallets.
Businesses that embrace these trends and technologies will be the ones shaping the future of e-commerce in Peru. But those that lag behind may find themselves struggling to keep up in the fast-moving world of online shopping.
