Pedro White, head of Mercado Libre in Peru: “There is a lack of incentives to digitize e-commerce”

In 2023 e-commerce in Peru grew 7%, moving a total of $13,000 million. However, this was the lowest growth in 13 years, according to the latest report of the Ecommerce Observatory 2023-2024 of the Peruvian Chamber of Electronic Commerce (CAPECE).

“The world of MSME trade is very traditional. This happens in Polvos (pink and blue, shopping emporia), not in the digital world,” said Pedro White, director of Mercado Libre in Peru, during his presentation at the event “Accelerating the country’s digital economy.”

In doing so, he reinforced his claim that a “conformist” mentality dominates the commercial sphere in Peru, which explains why the country lags behind in the implementation of modern technologies compared to neighboring countries, even after the acceleration of technology adoption brought by the Covid pandemic -19.

” online shopping per capita in Peru is only one-tenth of the total population in Argentina, even though the former has a larger population,” White explained. “There is a lack of incentives for digitalization.”

Since 2022, Mercado Libre, present in 18 Latin American countries, has been observing the effects of the economic slowdown in Peru, linking this phenomenon to the reactivation of operations a year later than in other regions. White said this discrepancy was visible when comparing order volumes in 2022-2023 instead of 2021 and 2022.

In addition, there are spillover effects at political, economic and social levels, which CAPECE says explain why, from 2.4% in 2019, the industry now represents 5.4% of GDP, “when it should have increased fivefold.” (since 2020, the year of the pandemic).”

“The everyday life of a Peruvian is full of challenges,” White explained. “(For MSMEs) digital transformation is difficult because it involves fixed costs and resources and a medium- and long-term vision.”

In this way, White presents the progress of Mercado Libre’s logistics arm through Mercado Envoys and with which long-term plans were made in the country.

This initiative, strategically linked to the Peruvian company Olva Courier, is capable of handling up to three million shipments a day within 24 hours, and by air within a maximum of 48 hours. But the company is trying to create storage and distribution centers across the country, so its first steps in that direction are reflected in business confidence in its FLEX technology, White says. The alternative provides full packaging traceability, visible to entrepreneurs, from packaging to final delivery, enabling them to increase their presence in the industry as adoption increases.

In the same spirit, to accelerate the digital transformation process of small and medium-sized enterprises, Pedro White proposes a collaborative public-private alliance. This would mean creating a comprehensive strategic plan that includes investments and incentives in the digital field, such as introducing a VAT and IGV-free day in Colombia or reducing taxes to zero, in order to stimulate investment.

“More than competitors, we are colleagues. We need a governing body in Peru,” he concluded.