Latin America has become one of the most sought-after emerging e-commerce markets. As retailers have seen in the shifting emerging economies of India and Asia-Pacific, the pathway into new markets isn’t always laid out, especially for brands without a local presence.
As developed markets show less growth opportunities for international brands, merchants are turning to LATAM’s $63 billion e-commerce markets where smartphones and Internet penetration are converging with high social media usage to accelerate the growth and increased sophistication of e-commerce.
The potential for high-growth is promising, but not without a nuance for navigating the complexity of the LATAM region, where restricted access to banking, low credit card penetration and idiosyncratic online buying behaviors make for a tricky entrance, particularly for those who do it from afar. Like any challenge though, if there is a will, there is a way.
For a globally-minded company such as Avast, whose digital security products are used by more than 400 million people across the globe, the fragmented LATAM markets could have posed a challenge. Instead, the company’s ‘Go Local’ strategy turned Avast into the largest consumer security provider in the region, with about 85 million active users. Key to Avast’s ‘Go Local’ approach is understanding and catering to their local users’ needs at every step of the user experience journey. Avast, who partnered with dLocal (for transparency sake, I happen to be the CEO of dLocal) to deliver and manage country-specific payment options across Argentina, Chile, Colombia, Mexico and Peru, reports that the ability to offer all the locally-relevant payment methods to its customers, down to the country level, was the key to capturing a sizable portion of the market in LATAM.
In looking at Avast’s success in the region, Cristian Gallardo, Regional Manager for LATAM at Avast, said: “Our LATAM users appreciate that we listen and tailor our offerings and selling process to their needs. This has been the key to helping us reach a 35% year-over-year growth in the region.”
Avast, like other user-centric companies such as Uber and Home Depot, began with the development of a custom, in-product checkout flow for a user experience in the local currency and in the preferred language. Importantly, it also featured all the relevant payment methods for their country, even off-line payment options and localized customer support.
Go Local or Go Home
Avast, headquartered in the Czech Republic, first launched the free version of its security software in 2001 in LATAM. It spread to millions of users in a matter of months. The problem was that users who wanted to upgrade their device protection, couldn’t purchase a subscription without an international credit card. However, local credit and debit cards can account for 25%-60% of e-commerce transactions, depending on country. For Avast, local cards ended up playing an even more important role – accounting for as much as 80% of their sales in the region.
Avast also found that by offering local cards, banks transfers and cash payments in its cross-border payments mix, they could significantly lift checkout conversions. Reflecting the diversity of the countries it served, the payment mix and local preferences were varied, yet the result were equally impressive, ranging from a boost in checkout conversion of 15% in Mexico to 25% in Argentina, Chile and Colombia.
To reach their full potential in this fast-growing region and unlock the pent-up demand for its products, Avast decided to focus on their users’ needs. By implementing a Go Local strategy anchored on offering a truly localized product and payment experience Avast has seized the opportunity and grown its regional revenue by 35% year over year.
Today, we still encounter many brands who assume that international credit cards are the holy grail of cross-border e-commerce. While they are important, they only are part of the local story. To cross borders as a trusted, user-centric brand and capture a strong foothold in the local markets, companies need to present a hyper-localized user experience that embraces the nuances of a diverse region, local infrastructure and users’ payment preferences.
About The Author
Sebastián Kanovich is a pioneer in emerging markets payments and the Chief Executive Officer at dLocal. He spun off dLocal from AstroPay in January 2016, creating a payments technology company which eliminates operational hurdles that hinder e-commerce expansion into emerging markets. Prior to dLocal, as the CEO of AstroPay, he grew the company into a premier payment-card provider that processed millions of transactions daily, winning recognition by Forbes as the top Fintech Startup to Watch. Sebastián studied Economics, Entrepreneurship & Innovation, and Management of Technology Business at Tel Aviv University and completed a prestigious Endeavor Innovation and Growth Program at Stanford Graduate College of Business. He continues to be fascinated with how payments work around the world.
