Industry Trend Analysis - DHL Investment To Mitigate LatAm e-Commerce Operational Risks - JUNE 2017

BMI View : DHL ' s decision to establish a dedicated e-commerce unit in Chile reflects the strong potential for that market that is not yet being fully exploited. Inadequate logisti cs is the most pressing of the challenges the Latin American e-commerce industry faces in the medium term and DHL ' s investment will go a long way towards easing operational risks.

DHL eCommerce, the business-to-consumer (B2C) e-commerce division of Germany-based logistics specialist DHL, has launched its first Latin American unit in Chile. The company cites the fast-growing nature of the local e-commerce market as well as several other fundamentals that will not only repay DHL's investment but also provide it with a business model it can replicate in other markets across the region. Although it is not the largest Latin American market for e-commerce, we believe Chile has considerable potential that will only be unlocked through focused investment.

We forecast B2C and consumer-to-consumer (C2C) e-commerce sales in Chile to grow at an average annual rate of 11.4% through to 2020, reaching a total value of USD6.993bn. This is slower than the regional average growth rate of 14.4%, which is lifted by the expansion of the Brazilian and Mexican markets, but this is still expected to be a very strong performance and will be one reason why DHL has chosen to launch its Latin American e-Commerce foray in Chile.

Strong Fundamentals Give Chile A Head Start
Chile e-Commerce Sales (USDmn)
e/f = BMI estimate/forecast. Source: BMI

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