May 10, 2017 / 4:31 PM / in 3 months

DHL says new Chile e-commerce business is 'booming'

SANTIAGO, May 10 (Reuters) - DHL eCommerce's first entry into South America via Chile is exceeding expectations a month after starting as it gives retailers easier ways to deliver to consumers that could boost online shopping, a regional executive said.

E-commerce is still in its infancy in Latin America, held back by poor infrastructure, consumer fears over fraud, and lack of practical payment options.

Chile, one of the region's most developed markets, has a high level of credit card use and good quality roads, but its package delivery industry to date has been largely focused on business-to-business transactions.

More than 50 "small and medium" shippers signed up in the first month and DHL was in talks with some of the larger players, Paul Tessy, chief executive of DHL eCommerce Latin America and Canada, said in an interview last week.

"Our solution in Chile is very groundbreaking from what the competition is offering ... the business is already booming because there is nothing like that out there," Tessy said.

DHL is introducing consumer-focused conveniences that may not seem revolutionary in more mature markets, but represent a sea change in Chile. They include the option for evening and weekend deliveries, an app that allows customers to see where their delivery is in real time, lower charges for lightweight packets, and an option for returns to be picked up from homes.

E-commerce in the region is expected to grow around 14 percent annually through to 2020, analysts at BMI Research said.

"We expect global players such as Amazon to increase their exposure to the Latin American market, particularly if DHL replicates its offering outside Chile," BMI said.

Amazon.com operates in Brazil and Mexico but is not present elsewhere in Latin America.

Tessy said Chile was being used as a "model" and DHL is actively evaluating markets such as Brazil, Argentina and Colombia.

Large retailers such as Falabella, Ripley and Wal-Mart already operate e-commerce businesses in Chile. (Reporting by Rosalba O'Brien; editing by Grant McCool)

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