Consumers in the Global South are becoming major contributors to overall economic growth – but brands need to address these shoppers’ specific needs.
A new research report from dLocal, “The Next Wave of Global Consumers”, provides key insights into the shopping preferences and purchasing drivers of 1 358 consumers in Mexico, Argentina, Brazil, Thailand, the Philippines, Kenya and Nigeria.
The availability of local payment methods was a profound ease of entry, with 71% of consumers unlikely to buy from a site that didn’t accept their local currency or an alternative payment method. Close to 99% of respondents marking it as important.
By 2035, 65% of global economic growth is expected to be driven by emerging markets, while by 2027, almost 90% of millennials and Gen Z consumers are expected to reside there.
However, detailed, comparable data on how shoppers actually behave in Latin America, Africa, and Southeast Asia is relatively scarce, and this report aims to give brands, retailers, and payment providers key insights on consumer preferences and behaviors.
The seven markets sit in regions that will make up the majority of the world’s population growth within a generation.
Alternative payments preferences
The absence of Buy Now, Pay Later (BNPL) is one of the highest barriers to payments online at 39%, followed by alternative payment methods such as e-wallets, bank transfers, mobile payments, or prepaid cards at 37%. One in five (20%) pointed specifically to products not being priced in their local currency.
An overwhelming 93% of respondents said being able to use their preferred local payment method (such as Pix, a bank transfer, or a mobile wallet) on an international site would make them more likely to buy from a foreign brand.
Payment-related changes are already the biggest driver of shifting shopping habits, with more than half of consumers selecting local payment methods and currencies as having the biggest impact on their online shopping.
“International brands and retailers waiting for emerging markets to adapt global payment methods risk entering them when they are already saturated,” says Horacio Raviolo, head of commercial partnerships at dLocal. “Everyone expects world-class shopping experiences, fast shipping and great customer service, however differentiation in these markets comes in the form of local currencies and payment methods.”
Regional snapshots
- In Argentina and Mexico only 6% and 5% respectively would buy without local payment support, the two lowest figures recorded.
- Chinese brands are purchased most often despite being least trusted, with 5.4% negative sentiments (three times the negative rate of US brands at 1,9%), yet they’re purchased “often” or “all the time” by 44,3% of respondents, compared with 31,5% for US.
- The Philippines is the only market where accepting a preferred local payment method beats shipping entirely as the top driver for European brands (64%).
- Nigeria and Kenya are the only two markets where faster shipping beats lower shipping costs as the top purchase driver, whereas everywhere else, cost wins.
- Kenya’s single biggest cited barrier is the unavailability of Buy Now, Pay Later, at 59%, nearly 14 points above any other market.
The report combines original survey data with dLocal’s prior LATAM research, and publicly available market data to provide insights into cross-border shopping, attitudes towards US, European, and Chinese brands, and triggers to convert consumers into loyal, repeat customers.