During the economic crisis facing the world in the wake of COVID-19, there have been winners and losers. Sales at the Latin American e-commerce company Mercado Libre rose more than 70% in April and Rappi (delivery and pick-up service start-up) increased 40% in the second week of March, according to unofficial data. In the financial sector, the Brazilian digital bank Nubank has seen an increase in customers ages over 60, an unprecedented situation, considering that this segment of the population did not seem willing to abandon their physical visits to bank branches.
The coronavirus arrived and with it, the boom in digital commerce – which was already on the rise – took a historic leap that experts believe will hardly regress to pre-pandemic levels when a vaccine appears.
And the field where growth opportunities are clearest for entrepreneurs who manage to survive the financial effects of the pandemic are digital businesses. These are 8 digital business opportunities in Latin America detected by the IDB.
1. Distance education platforms
Due to the partial closure of schools, universities, and offices, traditional education had to be transformed from one day to the next into distance education. The educational centers were among the first to be closed when confinements began to be decreed and policies of social distancing were put in place. So it was they who were forced to hold virtual classes and muddle through waiting to improve their digital systems.
And although in several countries of the region the confinements have been lifted, the existence of new outbreaks has called into question the return to face-to-face classes.
Globally, the closure of schools as of May affected 70% of the world’s student population, equivalent to more than 1.7 billion students, according to the IDB. Such will be the need for educational platforms around the world that business opportunities and competition will increase, even if a vaccine is eventually found.
In fact, before the pandemic hit, the virtual learning market in Latin America was already expected to grow to US $ 10 billion in 2025.
Who wants to go to a hospital or a clinic in the middle of the pandemic? Probably no one.
People have postponed medical visits, but in many cases, they are doing them from home through virtual sessions with the doctor. Although not the entire population has access to the internet and the elderly are not used to this system, the shock of COVID-19 has drastically accelerated change.
Patients with an internet connection prefer to go to virtual appointments with doctors to avoid hospitals and clinics. With the containment measures, the US platform Geisinger Health, for example, reported that the use of its service increased 500% in the first weeks of the pandemic.
And since telemedicine is much less developed in the region, an undeniable field of opportunities opens up for entrepreneurs.
3. Digital services for electronic commerce
Although there are no regional estimates yet, there are country-specific data showing the increase in online sales, especially in food and cleaning products. In Chile, they grew 119% and in Brazil 180% only in the month of March, according to IDB data.
Electronic commerce requires digital services associated with the development of the sector.
In this area, the agency has detected the growth of businesses that offer digital solutions to integrate payment and billing platforms, sales carts and catalogs, or tools that use artificial intelligence for order management, marketing and inventory control.
4. Digital services for the agricultural sector
In Latin America, there are at least 450 companies that sell digital services to the agricultural world. They are companies that operate in a sector known as agrotech and that are constantly developing solutions to improve food production and distribution.
Agrotech firms (AgroTools, NotCo, Auravant, Kilimo) work with data analysis tools coming from the field and use technologies based on artificial intelligence, internet of things (IoT), or blockchain to increase business productivity and monitor practical issues such as weather and crops.
For example, Uruguay successfully exports livestock traceability software. At the regional level, the projections are positive for the techno-agricultural sector due to the interruptions in the food supply during the crisis, the increase in logistical problems and the fall in the production capacity of fruits and vegetables.
5.Augmented and virtual reality for commerce
These technologies are developing useful applications in many industries. For example, shopping malls and stores that used to sell their products in person have started to use augmented and virtual reality technology so that people can buy from home.
This is also what the real estate sector is doing, for example, where people who want to rent or buy a property have the possibility of taking virtual tours that allow them to “walk” through the site they want to know. The same is true for architectural designs and entertainment-related businesses such as concerts, sporting or cultural events.
6. Entertainment: animation, video game development and electronic sports
Just as Netflix has become one of the big winners during the pandemic, digital services associated with the production of series, movies and videos for different platforms have increased.
In the cinematographic area, interruptions in live filming due to the pandemic are expected to generate a boom in animated content. Latin America has dozens of large animation studios that sell products in international markets and hundreds of smaller studios that could benefit from the crisis.
On the other hand, video games have replaced other forms of entertainment. In the United States, its use increased 75% during peak hours in the first week of isolation. And esports has also seen a rise.
Although it all depends on how the pandemic evolves, different estimates suggest that the number of people doing remote work could double in the long term. Not being centralized, teleworking exposes companies and workers themselves to potential cybersecurity threats.
Before the crisis, the cybersecurity services industry – at the global market level – was projected to grow to $ 230 billion in 2021. But under the new circumstances, the market could expand much more, considering that in addition to companies, public services and all kinds of organizations that operate remotely also require digital protection.
Companies like Nukke and Absolute have seen exponential growth since February in the region.
8. Financial technologies
Another field in full development has to do with the financial technology or fintech industry, which refers to digital services focused on the finance sector. As electronic payments are increasingly common, there is a demand for services that help improve transactions through cell phones and simplify the customer experience when doing their operations online.
Although the market is dominated by big players in this area, a number of startups have emerged that are trying to gain a foothold in this industry. Most issues they face are related to the regulations and laws of their countries.
Our recommendation is to explore opportunities in a specific niche market, in Latin America, there’s a lot of room for innovation and improvement. If you want to launch a product or enter a specific market in the region, get a free consultation with one of our experts to check your possibilities.
1 thought on “Which businesses are booming in LatinAmerica during COVID-19 Pandemic?”
Post covid, we all need to understand that the covid may be there for few years. It means we have to focus online instead of offline which is good. Thanks for sharing this information and subscribed your blog.