Gauging the Impact of Coronavirus on

LatAm E-Commerce

Americas Market Intelligence

March 2020
 Leading advisory group 27 years experience
for companies operating in
AMI is the leading
in the region
Latin America

analytical voice
in Latin American
sectors:
• Payments Our teams have executed
• Logistics Full coverage
3000+ projects
In Latin American &
• Consumer services of Latin America and the
Caribbean
Caribbean markets
since 1993

• Natural resources
• Industrial
• Healthcare
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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.

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Webinar agenda

Introductions

• A global view on e-commerce

• Coronavirus and Payments
• Coronavirus and Logistics
• AMI resources
• Q&A

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Introductions

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Today’s presenters

John Price Lindsay Lehr Diego Rodríguez Jaqueline Bartzen

AMI Managing Director Payments Practice Director Logistics Practice Director Head of Global Merchant
Engagement @ EBANX

And moderated by Abel Delgado

AMI Digital Marketing Director
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Poll question #1

What kind of company are you?

Bank, card network or E-commerce merchant Fintech or Logistics

payments processor or marketplace technology company services provider

Consumer packaged Consumer

Buyer of logistics Other
goods brand services brand
services

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A global view

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Coronavirus cases in Latin America
Latin America has enough hospital beds and clinics but not enough ICU beds and ventilators

% of basic
% of ICU beds
5-day trailing How many 5-day trailing hospital beds
to be
daily avg days ago Active cases *Total cases *Total cases daily growth to be
Country occupied by
growth rate was 100th 3/26/20 4/2/20 5/02/20 rate occupied by
COVID (4% of
(03/28/20) case? (05/02/20) COVID (25% of
cases)
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 10

Latin America COVID vulnerability versus other regions
Latin America is ill-equipped for both the health and economic challenges ahead

Demographic
vulnerability
Germany USA China Brazil
% Pop
over 75 11.3% 6.7% 4.7% 3.6%

Sources: World Bank, AMI analysis

Rebound Political/cultural
vulnerability vulnerability

LatAm

USA
EU USA E. Asia LatAm
Eastern Asia Overall
Europe vulnerability Med-high Med-high Low High

Sources: AMI analysis

Economic
vulnerability 11
2020 GDP forecasts
Latin America will lag leading economies in its recovery from COVID-19

Y-O-Y GDP Growth Forecast – 2020 - 2021

15.0%

10.0%

5.0%

0.0%
Q1 - 2020 Q2 - 2020 Q3 - 2020 Q4 - 2020 Full year - 2020 Full year - 2021

-5.0%

-10.0%

-15.0%

LAC EU USA China

Sources: GS, DB, BBVA, JP Morgan, AMI

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Other markets provide some guidance on e-commerce disruption

COVID-19, like SARS did for China in 2003, will prove a catalyst of change for e-commerce buying habits in the Americas

Delivery of physical goods SARS (2003) → 50% growth for Alibaba.

(food, pharma, pet food, cleaning COVID-19 →22% growth in Jan/Feb 2020 in China
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

Digital Goods Zoom usage up 30% worldwide. Netflix non-US sales to jump 31% in Q1.
(Entertainment, Communication, Rappi Colombia sales in 2nd week of March up 40%. US e-comm/retailers
Education, home delivery, to hire 750,000 for home delivery. Uber sales down 70% in US in March.
transportation)

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Poll question #2

Compared to 2019, how much do you expect your business to grow,

considering the coronavirus?

-100 0 100

Will shrink by 30% or more

0% to -30%

Around 0%

Will grow up to 10%

Will grow by more than 10%

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Coronavirus and payments

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Redistribution of e-commerce spend in 2020
Major disruptions in March and April, creating a total market decline of 12% YoY in overall e-commerce in 2020

Jan 2020 breakdown Dec 2020 breakdown

Retail 17% Retail

32%
Travel Travel

Digital 28% 54% YoY growth in 2020 16%

52%
Digital

35%

0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

-92%
Retail Travel Digital goods Overall Sources: AMI analysis
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Some return to normalcy in 2021, with some caveats
Some permanently changed consumer behaviors based on a new paradigm

2021 growth over 2019

Delivery services
Retail 6%

Travel -6%

Buying essentials online

Digital 35%

Overall 23%
Virtual content, entertainment,
socializing, communication (compared to 43% pre-epidemic)

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Other payments industry opportunities
Now is the time to push education of remote payment and banking opportunities

Promoting contactless Mobile/neo banking Credit and installments

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PANEL DISCUSSION With Jaqueline Bartzen
of
EBANX
The
The Impacts
Impactsof
of COVID-19
COVID-19
on
on the
the e-commerce
e-commerceandandlogistics
logisticsindustries in
industries
Latin America
in Latin America

Presented
Presentedby:
by:
Diego
Diego Rodríguez
Rodríguez

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The perfect storm for logistics disruptors

Delivery apps allowed to continue

operating

Mandatory home isolation as of March 25th

Last mile firms allowed to continue

operating

• 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
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delivery
 March 16th signaled the beginning of drastic measures in LatAm

Borders closed for passengers

As of March 20th

slashed 50% of its international flights

Borders closed for goods and trade grounded 95% of its fleet

Reduced air freight capacity cut 70% and Gol All of its Int flights
Only cargo/military
planes are permitted to
• Cross-border e-commerce is the most impacted as it land/depart
relies heavily on belly freight
• Logistics players with own assets are better prepared to
serve customers that will switch to air from ocean
freight Cancelled all
• Delays in LAC customs are starting to kick-off as international flights
except special flights to
government agencies workforce is reduce because of sick cut 70% of its flights
rescue Argentines 22
staff and furloughs of workers at high risk of contagion stranded abroad
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

What type of information

would be most helpful to you
right now?
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

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Next steps
Let AMI help guide your next steps at this critical time

2019-2023
Phone Payments
E-commerce
consultations Coffee Chat
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Get AMI insight into your Detailed e-commerce industry A free, informal Q&A with
specific situation forecast considering the Lindsay Lehr on anything
impact of COVID-19 payment-related

March 30th 11am ET

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Scan to register:
COVID-19 services:

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Ask us your questions

John Price Lindsay Lehr Diego Rodríguez Jaqueline Bartzen

AMI Managing Director Payments Practice Director Logistics Practice Director Head of Global Merchant
Engagement @ EBANX

jprice@americasmi.com llehr@americasmi.com drodriguez@americasmi.com jaqueline@ebanx.com

And moderated by Abel Delgado

AMI Digital Marketing Director
adelgado@americasmi.com

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