Latin America is home to one of the fastest-growing mobile markets in the world. In 2018, the region had 326 million mobile internet users — a figure that's expected to increase to 422 million by 2025.
Part of the reason for LATAM's explosive mobile growth is because mobile is that mobile devices are the primary way people access the internet throughout the region. Problems with infrastructure and sprawling rural towns with limited connectivity meant populations needed simple, portable ways to get online for both business and recreation. At the same time, the rise of social media and instant-messaging platforms caused skyrocketing demand for optimized mobile services.
As mobile penetration has soared, it is simultaneously facilitating innovative apps that promote opportunities for societal change, social mobility, financial control, and pathways to overseas markets. Mobile technology is advancing at such a speed that 4G adoption is anticipated to hit 67% in LATAM by 2025, and commercial launches for 5G are already underway in 2020.
Still, varying maturity levels and local regulations are dictating the speed of mobile acceleration for individual countries in the region. The nations currently leading mobile growth in LATAM are Brazil, Mexico, Argentina, Chile, and Colombia. To better understand how and why these countries are pioneering all things mobile, here's a breakdown of their mobile usage habits:
Mobile in Brazil
LATAM's largest country unsurprisingly has the highest number of mobile users. 141.45 million Brazilians own smartphones, 92% of whom are people aged between 18 and 55. Interestingly, despite having a mostly female population, 63% of men are mobile owners compared to 57% of women.
According to a report by We Are Social and Hootsuite, 63% of mobile connections in Brazil are pre-paid, meaning users can change their plans every time they recharge, suggesting that they prefer a level of flexibility in how they pay for their mobile activity. At the same time, only 4.5% of users have a mobile money account, although 44% of users say their preferred payment methods would be through a virtual bank account. A safe assumption is that Brazil has yet to introduce widespread fintech solutions.
WhatsApp, Facebook, Facebook Messenger, and Instagram are the most popular apps in Brazil based on monthly active users. WhatsApp in particular is so common that 53% of users say they would like the option to make payments in the app. In June, WhatsApp did launch such capabilities in the country, however, it was suspended by the Central Bank after just one week due to concerns over lack of competition in the payment system market.
Mobile in Mexico
Mexico has laid the groundwork for mobile solutions in a way that no other country in LATAM has. It is the first nation in the region to have a complete law regulating fintechs and is home to some of the most influential mobile companies in the region.
With 80.88 million smartphone users, Mexican citizens spend an average of three hours and 46 minutes on social media every day. Facebook is the most popular app, followed by Twitter, Tumblr, and Pinterest. A noticeable habit in Mexico is that shoppers tend to click through to shopping sites from social platforms on mobile. As it stands, 34% of all transactions for e-commerce come from mobile accounts, amounting to $7.7 billion in sales.
When it comes to paying, though, most transactions for mobile shopping apps are completed on desktop. Additionally, Mexico has a culture of ordering items via mobile but paying in cash at convenience stores like Oxxco. Nearly 60% of the workforce in Mexico are part of the informal economy — meaning they are paid in cash and prefer to spend using cash. They also maintain a level of mistrust around paying with mobile platforms, so e-commerce apps hoping to launch in Mexico have to focus on streamlining checkout processes and investing in UX that increases trust.
That said, Mexico's strengths lie in pioneering digital bank accounts. Considering only 37% of the population have bank accounts at formal institutions, digital wallets are slowly growing in popularity and are predicted to occupy a 27.7% share of the business to consumer e-commerce payments market by 2021. Nonetheless, there are still strides to be made in convincing older Mexicans to switch from cash to digital banking on a mass scale.
Mobile in Argentina
In the mobile sphere, Argentina is most recognizable for being home to the e-commerce giant MercadoLibre. Headquartered in Buenos Aires, MercadoLibre has the largest online commerce and payments ecosystem in Latin America. Naturally, MercadoLibre's payment app, MercadoPago, is the eighth most popular app in Argentina, with 97.21% of traffic originating from the country.
On a more general level, 94% of Argentines own a mobile phone, 88% of which have a smartphone. Similar to fellow LATAM countries, WhatsApp, Facebook, and Instagram have the largest share of active monthly users. In contrast to other LATAM nations, Argentina has strict rules about manufacturing and assembly processes, so only a few mobile brands have a presence there. Samsung, Motorola, and LG are the most popular, resulting in 92.5% of mobile traffic coming from Android devices, and only 6.6% for Apple devices.
In terms of payment trends, the majority (78%) of online purchases in Argentina are made using a credit card. Mobile payments are yet to really take off in the country, as only 27% of people use mobile to transfer money. The most significant portion of mobile behavior is reserved for scanning QR codes (40%), while 12% of people use their mobiles for boarding passes.
Mobile in Chile
In comparison to the rest of Latin America, Chile has the most diverse habits when it comes to mobile. Of the 25.05 million mobile phone subscribers, 19% have a mobile money account, 30.5% use their data for video, 28.8% for social networking, and 17.4% for web browsing. Meanwhile, 3.5 million people use their phones for ride-sharing apps like Uber, Lyft, Ola, and Didi.
Facebook, Google, and YouTube are the most downloaded apps in Chile, although the Netflix app has seen significant growth in usage over recent years, increasing from 12% in 2017 to 30% in 2018. Also booming are e-commerce purchases made from mobile, which rose from 25% in 2017 to 34% the following year. It's worth mentioning though, that 66% of Chileans use credit cards to complete such purchases, so there is room for wider adoption of different mobile payments.
Notably, what concerns Chileans most in e-commerce is free shipping features. 70% of people say that no delivery fees are “important” or “very important,” and half of the consumers say they'd be willing to wait longer for products in exchange for free shipping.
Elsewhere in Chile, MercadoLibre, BancoEstado, and Falabella are LATAM-specific companies that perform well. In particular, BancoEstado is facilitating the 19% of mobile users who have a mobile money account.
Mobile in Colombia
With 34.9 million mobile users, Colombia has lower mobile penetration when compared to the likes of Brazil and Mexico, however, Colombians are some of the most active mobile users in LATAM. 98% of the mobile owners use their phones for chat apps, 98% for social media, 93% for entertainment, 68% for shopping, and 44% for banking.
Behind Mexico, Colombia is making the biggest strides in mobile payments, as 2.5 million people manage their money digitally; 38% of whom transfer money to friends and family via mobile. Apps from local banks like Bancolombia (Nequi) and Davivienda (Daviplata) are the most prevalent, but the country is still predominantly reliant on cash. Worth noting is that more than 8 in 10 Colombians worry about how their personal data is used by companies — which could factor into reservations about wider fintech adoption.
Despite privacy concerns, social media is a huge hit. On average, Colombians visit Facebook and WhatsApp 16 times a day, and social platforms overshadow search engines in terms of product research. In fact, 66% of people use social media to review items, compared to 61% who use search engines. Meanwhile, WhatsApp is used for both leisure and business activities, with many companies choosing to deliver, promote, and organize payments through the app.
A 5G trial in Colombia has been an especially exciting development for the country, which began in an effort to help control the spread of COVID-19. Using 5G technology, a camera at the Secretary of Health building in Bogotá is monitoring the body temperature of over 400 employees in real time. Led by Movistar, the technology could be implemented on a long-term basis after the pandemic.
Latin America's mobile movement has been on an upward trajectory for a number of years now, and individual countries in the region are set to find their niche pockets in the mobile space, as they continue responding to their unique market needs. No doubt, the COVID-19 pandemic — which has hit LATAM especially hard — will bring with it the recognition that mobile capabilities are a utility and not a luxury. With this understanding, and a strong foundation already laid for mobile technology, LATAM has the potential to surpass other parts of the world in its mobile adoption.