Digital tools central for development of MSME trade in Latin America 

  • 25 March 2024

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Digital tools and technologies play a crucial role in boosting trade for micro-, small-, and medium-sized enterprises (MSMEs) in Latin America, reveals a new ICC report.

The “MSME Digital Exports in Argentina, Brazil, Colombia, and Mexico: Opportunities and Challenges,” is based on the results of a survey conducted in 2023 among more than 2,000 MSMEs in the region. It analyses the impact of the Covid-19 pandemic three years after its onset, identifies barriers to exports, and assesses the role of digital tools in enabling trade. 

With this report, ICC aims to contribute to discussions and initiatives in the region that seek to enhance the export capacity of MSMEs. Additionally, ICC aims to leverage the report to develop tailored training programmes for MSMEs in the region. 

“Digital technologies are creating opportunities for small businesses to trade and reach international markets. ICC is committed to providing the necessary resources to help local businesses harness these opportunities and benefit the communities they serve, in the region and beyond”

said ICC Secretary General John W.H. Denton AO. 

Covid-19 pandemic: an inflection point 

 The report shows that employment in MSMEs has yet to fully return to pre-pandemic levels, with 40% of surveyed MSMEs indicating a decrease in the number of employees since the beginning of the pandemic. Similarly, the pandemic significantly restricted their export capacity with many MSMEs, particularly in Brazil and Mexico, changing the destination of their exports. 

However, the Covid-19 pandemic triggered a significant increase in the use of digital tools and technologies with 80% of surveyed companies reporting an increase in the use of these tools. It also greatly accelerated the development of online commerce for both formal and informal MSMEs. Over 75% of the surveyed MSMEs in Argentina, Brazil, and Mexico began buying or selling products and services online during the pandemic. This trend was less pronounced in Colombia.  

Export barriers limit opportunities  

70% of businesses surveyed in Argentina, Brazil, Colombia, and Mexico expressed an interest in exporting within Latin America, and 50% expressed an interest in exporting to North America. However, many barriers continue to hinder their ability to access international markets. The three main barriers that were reported are language, the lack of resources, and the regulatory environment. For micro-entrepreneurs, high competition levels and regulatory complexity are the most challenging hurdles. 

Digital tools: a key driver for the development of MSME exports 

Digital tools and technologies have become central to MSMEs’ ability to trade. Close to 80% of MSMEs surveyed in Argentina, Brazil, and Mexico claim to sell products online, and 63% of MSMEs in Colombia claim to do so. However, for many MSMEs, internet access remains too expensive, and many are dissatisfied with the quality of service, especially with the irregularity of the service, slow connection, and lack of technical support. Furthermore, the degree of familiarity with digital tools differs substantially between countries and business sizes. 

The main digital tools used to drive online sales are: WhatsApp, Mercado Libre, Instagram, Facebook Marketplace, and Amazon. However, MSMEs continue to face significant challenges linked to logistics, the regulatory environment, and payment systems. Finally, digital marketing is a key area of development for MSMEs – close to 70% of businesses are eager to receive training in digital marketing, while 50% are looking for training on how to identify market opportunities. 

Key findings: 

Download the country summary of surveyed MSMEs in Argentina

Download the country summary of surveyed MSMEs in Brazil

Download the country summary of surveyed MSMEs in Colombia

Download the country summary of surveyed MSMEs in Mexico