As January came to a close, DHL announced that, as of April 2019, the global delivery company will terminate its e-commerce business in Chile.
It’s been less than two years since DHL launched an e-commerce service delivering shipments from online stores to consumers in Chile, and, despite the country’s status as one of the most stable economies in Latin America, the venture didn’t yield profitable results, according to multiple reports.
Chilean newspaper, Diario Financiero reported that DHL has endured some tough competition from domestic package delivery companies already serving Chile’s top retailers.
However, e-commerce in Chile is still in a nascent stage of development, and obstacles like poor infrastructure and a lack of practical payment options keep much of Latin America from expanding into the online marketplace.
The announcement does raise questions about the challenges of expanding into a global market without understanding how to effectively compete there. Also concerning are the myriad challenges of cross-border payments, a topic addressed in a recent report authored by Steve Villegas, PPRO Group’s vice president of partner management.
“A lack of regional knowledge and not offering a region’s preferred payment option are key disadvantages that hinder U.S. online merchants attempting to scale globally. Merchants cannot offer the same traditional payment options they do domestically to other international markets, expecting the same results,” Villegas wrote.
“U.S. merchants need to adapt with the global market, be strategic and region-specific to capitalize on increased sales from consumers outside of the U.S., where 85 percent of the world’s purchasing power lies. Taking the time to learn and adapt to regions that vary not only culturally, but also in how they handle their money, will give any merchant that extra step in an already competitive global market.”