SANTIAGO (Reuters) – Package delivery company DHL [DHL.UL] will shutter its Chilean e-commerce division in April, plagued by weak results in one of Latin America’s most stable and prosperous economies, Chile’s Diario Financiero newspaper reported.
DHL said that it would close its eCommerce division on April 12, but that the company’s other package delivery divisions would continue to operate in Chile, the daily reported.
DHL did not immediately respond to Reuters’ requests for comment on the report.
DHL began its e-commerce business in Chile in 2017, introducing consumer-focused conveniences for e-commerce purchases, such as options for evening and weekend deliveries, an app that allows customers to see where their delivery is in real time and an option for returns to be picked up from homes.
Diario Financiero cited industry sources that said weak results stemmed from stiff competition from domestic package delivery companies that already service Chile’s top retailers, including Falabella, Ripley and Wal-Mart.
DHL’s struggles in Chile coincide with Amazon.com <AMZN.O> discussing potential investment in Chile and neighbouring Argentina.
E-commerce is quickly gaining traction in Chile but still in its infancy across much of Latin America, held back by poor infrastructure, consumer fears over fraud, and lack of practical payment options.
Chile has a high level of credit card use and good quality roads, but its package delivery industry to date has been largely focussed on business-to-business transactions.
(Reporting by Dave Sherwood and Fabian Cambero; editing by Grant McCool)