The number one issue weighing down e-commerce in Latin America is that of payments.
In Brazil, Latin America’s largest e-commerce market, many consumers are blocked from making purchases because they don’t have access to international credit cards. Argentina’s online retail market grew 48.5% in 2013, but continued growth will depend on the evolution of payments and logistics in the months and years ahead. And throughout all of Latin America, an estimated 70-80% of the population remains unbanked.
A group of all star entrepreneurs and developers have teamed up to tackle Latin America’s electronic payment problems head-on. With their startup, Mango, they have set out to “make the experience of selling and buying via online/mobile solutions as simple, beautiful and transparent as possible for everyone in the process.” The team is working on a number of technologies and services to take the region’s e-commerce system to the next level.
The team has also managed to gather an impressive group of backers right out of the gate, having raised funds from European VC firm Kima Ventures and angel investors Adrian Kolonski, Reuben Katz and Eric Friedman.
We reached out to Mango CEO Pablo Sánchez to learn more about the startup’s proposal and the Latin American payment and online retail landscape.
Emily Stewart: Your team comes from a pretty eclectic background. How did you come together for this project?
Pablo Sánchez: One of our key values has always been to deliver happiness in the shape of quality products. While working on a service-based company, we trusted our work could make a difference in the lives of our clients and their clients as well. Throughout the years, we noticed a serious lack of quality solutions in the e-commerce industry in Latin America, and since no one was determined to fix this problem, we decided that we had to do it ourselves. Our values of quality and happiness remain the same, and we hope to now deliver them to thousands of more clients.
ES: There are products out there for online and mobile payments right now in Latin America, but none of them have really proven a definitive solution. What do you think is the missing piece of the puzzle?
PS: We truly believe that there are not as many “solutions” as one may think. Many of the alternatives out there were designed to support bigger platforms or projects, and their main focus was not to provide solutions for others. On top of that, we’re in an industry where technology is always evolving, and many of these alternatives seem to be stuck in the 90s. Innovation is key to provide a really helpful solution.
User experience is not given the importance it requires. By now, most companies understand they need to prioritize user experience. But we’re bringing this idea to the table that we also prioritize developer experience.
Another key aspect is mobile. If stores are still having problems simply paying via desktop computers, how can we really give the user a great and fast experience in mobile? We believe that the problem goes much deeper and is completely independent of the device. Once it’s fixed, it will open the game to all platforms.
ES: There’s still a lot of skepticism surrounding virtual payments in Latin America. What’s your take on the scenario?
PS: People are always skeptical of what is not straightforward, complicated and they don’t understand. There are quite a few differences between Latin American e-commerce and U.S. e-commerce:
- Lack of information and culture. Some people still believe it’s not safe to buy online. Luckily, this myth is coming to an end. Proof of that is that Latin America is having e-commerce growth of 45% year over year.
- People seldom buy in one installment. People are used to buying things and paying them off for six to 12 months, because items are expensive.
- Most stores aren’t online because they don’t know how to achieve that and find it complicated (because it is).
- Those few who do manage to implement a workaround-solution to sell online are not happy with it and cannot provide their clients the experience they would like.
- Some people remain unbanked, so they don’t have credit cards. Thus, they cannot buy online. Luckily, as well, this is also getting better.
We can improve the growth of the market by addressing these issues intelligently.
ES: What sorts of products can we expect from you? What timeline are you working on?
PS: Our goal is to make e-commerce in Latin America smooth and enjoyable. So any product of the many we have in mind will address issues with different points of view and different needs of that same problem.
We’re in Private Beta at the moment, working with a reduced number of companies that are providing feedback and helping us to test our first product. We’re going to open our Beta progressively to more companies in the upcoming months, and communicate further details about Mango through our company blog and Twitter account. Our product will include much more features to come and will be the true game changer.
ES: What markets do you plan to address first?
PS: We’re launching in Argentina first and moving to neighboring countries after that. Our objective is to help Latin America as a whole, moving quickly.
ES: Argentina is struggling right now in terms of economy, inflation and currency. Does this affect how you’re approaching the project in the country?
PS: Not really. It may sound crazy, but inflation in our country is always common so people find it as yesterday news. From a market standpoint, if things are becoming more expensive, credit cards will come even more into play. So if you don’t have money right now and need something, you can pay for it at a later time.
On top of that, buying goods from abroad is becoming more expensive and complicated every day, so local shops will need to start providing these goods themselves and find great e-commerce solutions to reach most buyers.