How B2B Marketplace Tech Startups Underpinning LatAm’s E-Commerce Success Can Capitalize on Growth

The success of direct-to-consumer brands and e-commerce stores in Latin America is well-known – Argentina, Brazil, and Mexico have annual e-commerce retail growth of .

But as an investor in Latin America, I emphasize that the driver of e-commerce is B2B technology. B2B brands are taking retail challenges in marketing, fraud, customer service, payments, and shipping as an opportunity to develop innovative solutions and revenue.

The need for marketplace technologies is growing, and B2B startups need to scale their solutions to the markets. This means 2023 will be a decisive year for innovation, and investors are paying close attention.

Predictions for LatAm's B2B tech

Throughout 2021 and 2022, underwent their first digital transformation, aiming at more efficient and streamlined supply chain processes. However, facing structural challenges with digital payments, supply chains, and infrastructure, many brands have yet to digitize their business truly – and they are looking for external help on these matters.

Most B2B marketplace developers in this space understand the ever-evolving challenges small businesses and vendors face. They know the importance of improving retail activities' productivity, efficiency, and profitability, making them work on many levels simultaneously, such as automation, cloud, and communication technologies. Some take a challenge and target traditional and hard-to-enter markets, such as Nuqlea and Agrizon.

Many experts believe that the B2B marketplaces’ abilities to offer efficiencies for businesses at multiple levels are the key selling points. Expecting a high ROI, strong market demand, and high growth potential from this sector, forward-thinking VCs will invest in those developing tech for B2B marketplaces this year.

Remaining barriers in 2023

But despite this optimistic forecast, there are still crucial barriers to entry, including:

Lack of education

To succeed in B2B, you need executives in the e-commerce business to want your solution. Unfortunately, in many parts of Latin America, there are still significant gaps in the adoption and understanding of digital tools. Small and mid-sized retailers, in particular, need to be persuaded with marketing and cold outreach to demonstrate the value of B2B solutions to them.

Regulatory challenges

The regulatory environment in some Latin American countries can be complex and challenging. There are numerous rules and regulations that B2B companies must comply with to establish and operate in the market. Therefore, startups collaborate with local associations, long-established investors, and often politically savvy lawyers to ensure they navigate the red tape.

Competition

The Latin American B2B market is highly competitive, with many incumbents and big marketplaces, such as Mercado Libre or Rappi. For example, . To compete, startups must home in on unique experiences for buyers and sellers, such as increased buyer credit through data or transaction transparency.

Business model

In 2022, demonstrated e-commerce growth of 33% – its brother Mercado Pago, the fintech solution, showed 115%. This is because there is a high demand for infrastructure technology, such as payments, as these are the necessary basics to fuel marketplaces’ success. Given this demand, startups specializing in supporting existing enterprises with highly innovative tech on all fronts will grow comparably fast and might have a massive impact.

So what's next in 2023?

With B2B marketplaces continuing to catalyze growth in LatAm’s e-commerce industry, 2023 will be critical. The better B2B brands get at strengthening themselves, offering quickly deployable solutions for small to midsize businesses, and incorporating customers' buying experience, the more likely they will continue driving e-commerce’s success.

This article mentions portfolio companies from Newtopia VC as examples.