The region’s private sector is actively seeking tech solutions to improve and optimise business operations, but in-market solutions are in short supply. This is where Singapore companies can fill the gap – especially in solutions for e-commerce, fintech, and healthcare, and stand to gain from this current early mover advantage.
The tech landscape today
Similar to Southeast Asia, Latin America has a huge population of over 600 million people, a rising middle class, and growing consumerism backed by digitalisation. On top of that, Latin America’s GDP tops out at S$7 trillion, which is more than double that of ASEAN's1.
The Artificial Intelligence (AI) sector in particular is growing fast, and is estimated to increase exponentially from S$124 million in 2016 to over S$2.6 billion in 20252.
Latin America is also estimated to be the fastest growing e-commerce market, expected to grow from S$77 billion in 2017 to S$154 billion in 20213. The region also saw a 31% increase in venture capital funding for fintech in 2016, and has produced a number of unicorns4 such as 99 Taxi, Despegar.com, Mercadolibre, and Globant.
Because the digital market is so nascent, most tech solutions are done in-house instead of using third party exportable platforms. For instance, domestic AI solutions currently tend to take the form of chat-bots for rudimentary commerce.
This is where Singapore companies can come in – with the largely exportable format of their solutions, companies might find it fairly easy to scale up in Latin America.
Don’t wait!
Some established private companies in Latin America have already started to invest in technology to grow their businesses. E-commerce sites magazineluisa.com and Mercadolibre have invested in in-house tech departments to develop visual analytics technology. Even pharmaceutical chains such as Farmacias San Pablo in Mexico have invested in search technology to recommend similar products when readers search for items on their e-commerce site.
The potential of the region has not gone unnoticed either – Google and Amazon have already started investing in fintech and e-commerce there. Even Singapore sovereign funds GIC and Temasek have also invested in e-commerce sites such as Netshoes.
Right now, the tech landscape in Latin America is fragmented and large enough to accommodate more solutions providers. This is why now is the right time for Singapore companies to get in – while the early mover advantage is still present.
There is also relatively less competition right now when you compare it to the more developed markets.
Tech is borderless
If you find the geographical distance of Latin America daunting, remember that tech is borderless.
Geographical distance means less to tech businesses since many solutions can even exist over the cloud. Cloud solutions also speed up the implementation of these solutions, reducing project lifecycles and making projects more scalable.
The Singapore brand is also well regarded in Latin America. More than that, Singapore companies enjoy a few advantages:
- Singapore offers niche, quality solutions that are cost effective:
Unlike large, traditional enterprise software solution providers that target the mass market, Singapore companies generally offer niche solutions specialised for different sectors.
Through my interaction with both Singapore companies and Latin America ones, I’ve found Singapore solutions to be more cost competitive, and have higher accuracy rates when compared to generic solutions offered by other software companies for the mass market.
- Singapore is also regarded for IP and reliability:
I’ve found that Latin America companies tend to gravitate toward Singapore companies’ solutions, as they recognise Singapore’s strength in data privacy and reliability.
In an article by The Business Times, Oliver Tan, chief executive of Singapore-based AI startup Visenze says, “Latin America e-commerce markets are hungry for new tech. They don’t want to be left behind… If Singapore startups were to spend some time investing in these markets, they can ride the growth wave of market adoption of supporting technologies.”
Visenze has reportedly secured major retail clients in the region, where it has sales representatives and partners.
Benedict has been based in São Paulo, Brazil for over 2 years. Among other projects, he leads the technology initiative across Latin America, identifying gaps for Singapore companies to enter the market, and working with them to explore and realise opportunities there.
Interested? Please reach out to us at go.gov.sg/askenterprisesg to find out more about our upcoming e-commerce business mission to Brazil and Mexico!