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Despite being negatively affected by the pandemic, Chile’s e-commerce sector saw a significant 77% increase in sales in 2020. Despite the economic challenges caused by the pandemic, Chile’s overall economy has recovered quickly in 2021, with a 11% growth in GDP. As a highly developed economy and member of the OECD, Chile remains a strong market for retail and a high-growth-potential market for its e-commerce.
Chile boasts several advantages in the retail market, including its well-established domestic retailers and its thriving food and food-processing industry that primarily exports. Leading retailers have expanded aggressively into neighboring countries, including Argentina, Brazil, Mexico, and Peru, making Chile home to some of the leading e-commerce players in Latin America. Furthermore, Chile’s wide network of free-trade agreements with most major global economies has opened up consumer goods markets to foreign participation and kept the cost of imported goods low.
The retail market in Chile is primarily dominated by Walmart, Cencosud, and Falabella, with Walmart leading in the hypermarket segment and the other two companies operating department stores, supermarkets, home improvement stores, and shopping malls across South America. Shopping malls have become increasingly popular among Chilean consumers, who have traditionally preferred to shop at local convenience stores. However, the impact of the coronavirus pandemic has led to an increased focus on improving digital presence and logistics capabilities among retailers, with expansions and store upgrades expected to take place later in the forecast period.
In the e-commerce sector, Falabella remains the clear winner, with market shares growing from 15.8% in the 2017 to about 23.8% in 2021 according to Euromonitor. Cencosud and MercadoLibre are close second and third, while MercadoLibre, an online marketplace, is the only relevant e-commerce platform in Chile.
Despite in Chile, most major e-commerce aren’t marketplace, the strong growth of MercadoLibre over the last five years (growing from 3.2% to 10.3%) and the steady presence of Amazon and Alibaba also show a huge potential for the sector.
Falabella has also been expanding its product range and investing in its e-commerce platform, which has been well-received by customers. The company plans to continue investing in the product offering and improving delivery services to gain a competitive advantage in the online retail market. Specialized marketplaces such as food and homewares are also expected to grow as consumers become more accustomed to online shopping and look for unique products and services.
Subscription Services: Subscription services continue to grow, but these remain a niche and usually focus on the higher-income segment of the population. Such services tend to concentrate mainly on groceries, especially for gourmet and exclusive products. Amongst the well-known brands are Mr Jeff and MeatMe, which offer laundry services and meat, respectively.
App-Based Delivery Services: Throughout the second half of the review period, various app-based delivery services boomed in the capital and several other densely populated cities in Chile, becoming strongly established in the country as an increasingly demanded channel. The high penetration of smartphones, combined with a high banked population, allows customers to opt for these new purchasing methods, as they appeal to their busy lifestyles, with the convenience of the services allowing consumers to save time.
Growth in SocialCommerce: Social media commerce, especially via Instagram and WhatsApp, continues to gain ground with traditional players such as Falabella launching special livestreaming selling events, in addition to new brands such as Emma Cares that focus on beauty and personal care, and utilise platforms such as WhatsApp as their main client communication channel to personalise and sell their products. Social media as a channel for buying and informing consumers about products and launches, is set to continue to gain importance over the coming years.
In Chile, There are about 29.8% of people use credit cards, and 59.8% of people use debit cards. While there are 22.9% of people purchase on the internet, there is only 28% of people with online banking accounts.
There is 12.05 million consumer goods e-commerce users in Chile, and they spend total of around 7.64 billion USD dollars in 2021. That makes a per capita spending on consumer goods e-commerce of around 634 USD. Also, in those e-commerce users, about 36.2% of them purchase through their mobile phone.
Our consumer research practice tracks what customers spend and how they make decisions across major economies in the world.
