Huawei Cloud is Enabling Digital Transformation of E-Commerce and More in Latam

Digitalization has been recognized as a key driver for the modernization of Latin America and enhancing the economic prosperity of the region. To achieve this, the World Bank has set out a Digital Economy Framework (DE4LAC) with six core pillars including building digital infrastructure (affordable, high-speed internet); establishing digital platforms (access to public and private services online); digital financial services (creating financial inclusion by removing geographic and market barriers); digital businesses (to drive employment and innovation); a digitally-savvy workforce; and a trust environment of governance. Underpinning all digitalization is the importance of cloud computing. Studies suggest that the availability of cloud computing can add 5.7% GDP during the next decade and that investment in related technologies such as cloud, networks, storage and professional services will increase by around 12% during 2023 which is significantly higher than GDP growth of around 2.1%. In 2022, spending on cloud computing in the LatAm region was approximately US$13 billion with Argentina, Brazil, Chile, Colombia and Mexico accounting for 84% of spending.

Opening up New Market Opportunities

The average per capita income in Latin America is now over US$10,000 creating a strong foundation for the digital economy in one of the most dynamic regions in the world, both culturally and economically. This creates new consumers and opportunities for new sectors such as e-commerce. According to the Statista Digital Market Outlook, e-commerce users in Latin America reached approximately 317.5 million in 2022. By 2027, this figure will grow by 22 percent, resulting in some 387.7 million users across the region (Statista). The number of transactions has in the region increased by three-fold between 2019 – 2023, from $117 million to $364 million with Covid-19 accounting for the acceleration. Many Latin Americans tried e-commerce for the first time during this period resulting in e-commerce market growth of 37% from 2020-2021. It is projected that the B2C e-commerce market in the region will surpass $7.5 trillion by 2030 offering a major opportunity for merchants to reach new audiences by offering their products and services in new markets.

Building the Infrastructure

There are many similarities between Latin America and China. Some of China’s own learnings about digitalization are therefore relevant to the region, customized to suit the region’s individual needs and those of each country. These are themes which have been echoed throughout Huawei Cloud’s four summits in Latin America in November and December. Held in Brazil, Chile, Peru and Mexico, the events emphasize Huawei Cloud’s “In LatAm, for LatAm” ethos and corresponding country strategies.

Supporting transformation of the region, in 2019, Huawei Cloud announced its service launch in Chile, the first public cloud Region in Latin America. In 2021, Huawei Cloud launched its second availability zone (AZ) in Chile, becoming the only dual-AZ cloud service provider in the country with a latency circle as low as 50 ms to improve access experience. Huawei Cloud has established core regions in Brazil and Mexico, and country regions in Argentina and Peru. Plans are underway for more availability zones in the region.

How the Cloud Supports Business Growth

In e-commerce, Huawei Cloud's solutions enhance consumer analysis and search precision. For example, the Chilean food retail giant SMU built their own e-commerce platform leveraging Huawei's cloud native technologies. In the media industry, Huawei Cloud has helped to improve content productivity, enhancing user experience, and fostering innovation. And during the livestreaming of the 2022 World Cup Huawei Cloud supported and reduced live latency from 3 seconds to 800 milliseconds, resulting in more real-time and seamless live streams.

Cloud computing is set to drive economic prosperity in the region. E-commerce growth is expected to maintain growth of over 10% until at least 2027. Overall global trade with the region will continue to grow with China accounting for 22% while foreign direct investment (FDI) is continuing led by Brazil then followed by Mexico, Chile, Colombia, Argentina and Peru (World Bank) signifying that the next decade will be one of digital transformation.