Digital reinvents retail
Both traditional and digitally native businesses have stepped up their online operations. In 2022, Mercado Libre, Latin America's leading online marketplace, announced a 400 million U.S. dollar logistics investment plan for Chile in 2022 and 2023. The move is part of the company's strategy to achieve a delivery time of under 48 hours, regardless of the country's region. By expanding its storage and distribution capacity, Mercado Libre aims to gain a competitive advantage over the increasing number of international players and local retailers striving to conquer the Chilean market.Far from sitting idly by, long-established department store chains such as Falabella and Ripley have turned on full steam in digital transformation. For one, in August 2021, Grupo Falabella revamped falabella.com making it an overarching e-commerce platform including all of its brands – Falabella, Tottus, Sodimac, and its marketplace Linio. Meanwhile, for Ripley, the development of its digital channel was not just an option but a necessity, acting as a lifeline during the pandemic when physical stores faced long-term closure.
A two-faced e-commerce economy
Retailers were not the only ones who had to make rapid adjustments to e-commerce. In 2022, Chile counted some 12.7 million e-commerce users, up more than two million from before the crisis. About a quarter of these users were adults in their twenties, typically digitally savvy yet with some financial independence to afford their own purchases.Nonetheless, Chile still struggles with income inequality. Consequently, informal trade remains an attractive alternative for sellers and consumers alike, even on the web. That year, informal e-commerce accounted for approximately 10.3 percent of all digital transactions. But a challenge for digital commerce in Chile today could mean opportunity tomorrow. If informal e-retailers eventually transitioned into the formal economy, this could fuel the growth of the country's e-commerce sector.