March 2020

Americas Market Intelligence

Gauging the Impact of Coronavirus on

LatAm E-Commerce

AMI is the leading analytical voice in Latin American sectors:• Payments• Logistics• Consumer services• Natural resources• Industrial• Healthcare

Leading advisory group for companies operating in

Latin America

27 years experience in the region

Full coverage of Latin America and the

Caribbean

Our teams have executed

3000+ projectsIn Latin American &

Caribbean markets

since 1993

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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.

Webinar agenda

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Introductions

• A global view on e-commerce

• Coronavirus and Payments

• Coronavirus and Logistics

• AMI resources

• Q&A

Introductions

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Today’s presenters

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And moderated by Abel DelgadoAMI Digital Marketing Director

Jaqueline BartzenHead of Global Merchant

Engagement @ EBANX

John PriceAMI Managing Director

Lindsay LehrPayments Practice Director

Diego RodríguezLogistics Practice Director

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2019-2023 LatAm E-commerce reportForecast considering impact of COVID-19

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AMI-moderated strategic planning session

Poll question #1

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What kind of company are you?

Bank, card network or

payments processor

E-commerce merchant

or marketplace

Fintech or

technology company

Logistics

services provider

Consumer packaged

goods brand

Consumer

services brand OtherBuyer of logistics

services

A global view

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Coronavirus cases in Latin America

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

5-day trailing

daily avg

growth rate

(03/28/20)

Country

How many

days ago

was 100th

case?

Active cases

3/26/20

*Total cases

4/2/20

*Total cases

5/02/20

5-day trailing

daily growth

rate

(05/02/20)

% of basic

hospital beds

to be

occupied by

COVID (25% of

cases)

% of ICU beds

to be

occupied by

COVID (4% of

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

Latin America COVID vulnerability versus other regions

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Latin America is ill-equipped for both the health and economic challenges ahead

Demographicvulnerability

Political/culturalvulnerability

Economicvulnerability

Reboundvulnerability

LatAm

USA

Eastern Asia

Europe

% Pop

over 75

Germany USA China Brazil

11.3% 6.7% 4.7% 3.6%

Overall

vulnerability

EU USA E. Asia LatAm

Med-high Med-high Low High

Sources: World Bank, AMI analysis

Sources: AMI analysis

2020 GDP forecasts

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Latin America will lag leading economies in its recovery from COVID-19

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

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

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

LAC EU USA China

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

Other markets provide some guidance on e-commerce disruption

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

SARS (2003) → 50% growth for Alibaba. COVID-19 →22% growth in Jan/Feb 2020 in China

Delivery of physical goods(food, pharma, pet food, cleaning

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

Zoom usage up 30% worldwide. Netflix non-US sales to jump 31% in Q1.

Rappi Colombia sales in 2nd week of March up 40%. US e-comm/retailers

to hire 750,000 for home delivery. Uber sales down 70% in US in March.

Digital Goods(Entertainment, Communication,

Education, home delivery,

transportation)

Poll question #2

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

considering the coronavirus?

Will shrink by 30% or more

0% to -30%

Around 0%

Will grow up to 10%

Will grow by more than 10%

0-100 100

Coronavirus and payments

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

YoY growth in 2020

Retail Travel Digital goods Overall

Redistribution of e-commerce spend in 2020

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0%

-92%

35%

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

52%

16%

32%

Dec 2020 breakdown

Retail

Travel

Digital54%28%

17%

Jan 2020 breakdown

Retail

Travel

Digital

Sources: AMI analysis

Some return to normalcy in 2021, with some caveats

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Some permanently changed consumer behaviors based on a new paradigm

2021 growth over 2019

Delivery services

Buying essentials online

Virtual content, entertainment,

socializing, communication

Retail 6%

Travel -6%

Digital 35%

Overall 23%

(compared to 43% pre-epidemic)

Other payments industry opportunities

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Mobile/neo banking Credit and installments

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

Promoting contactless

PANEL DISCUSSION With Jaqueline Bartzen

of

EBANX

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The Impacts of COVID-19

on the e-commerce and logistics industries in

Latin America

Presented by:

Diego Rodríguez

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The Impacts of COVID-19

on the e-commerce and logistics industries

in Latin America

Presented by:

Diego Rodríguez

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The perfect storm for logistics disruptors

• 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

delivery

Delivery apps allowed to continue

operating

Mandatory home isolation as of March 25th

Last mile firms allowed to continue

operating

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March 16th signaled the beginning of drastic measures in LatAm

Borders closed for passengers

Borders closed for goods and trade

Reduced air freight capacity

grounded 95% of its fleet

slashed 50% of its international flights

Only cargo/military

planes are permitted to

land/depart

cut 70% of its flights

Cancelled all

international flights

except special flights to

rescue Argentines

stranded abroad

As

of

Marc

h 2

0th

• Cross-border e-commerce is the most impacted as it

relies heavily on belly freight

• Logistics players with own assets are better prepared to

serve customers that will switch to air from ocean

freight

• Delays in LAC customs are starting to kick-off as

government agencies workforce is reduce because of sick

staff and furloughs of workers at high risk of contagion

cut 70% and Gol All of its Int flights

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

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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

What type of information

would be most helpful to you

right now?

Next steps

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Let AMI help guide your next steps at this critical time

2019-2023

E-commerce

Report

Detailed e-commerce industry

forecast considering the

impact of COVID-19

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consultations

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specific situation

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Coffee Chat

A free, informal Q&A with

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March 30th 11am ET

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Ask us your questions

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And moderated by Abel DelgadoAMI Digital Marketing Director

Jaqueline BartzenHead of Global Merchant

Engagement @ EBANX

John PriceAMI Managing Director

Lindsay LehrPayments Practice Director

Diego RodríguezLogistics Practice Director

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

adelgado@americasmi.com