Today, people in countries like the United States take it for granted that they can press a button on their phone and receive nearly any product at their front door the next day. But people living in rural parts of lower-income countries often must choose between travelling to cities or paying high prices for many products.
Now the online marketplace Pacifiko, founded by Jorge Schippers MBA ’13, is expanding access to low-cost products in Central America.
The company offers tens of thousands of products on its website and uses its own fulfillment centers in Guatemala and Costa Rica to provide fast deliveries to every corner of both countries. The goal is to offer a convenient, more affordable shopping experience, and by pursuing that goal, Pacifiko’s impact in the region has gone far beyond convenience for consumers.
The company launched at the end of 2019 in a world that was soon upended by the Covid-19 pandemic. Many of its early sales were health-related items like masks and hand sanitizer. It also found itself at the center of lifestyle shifts, selling huge amounts of home office and home school supplies in a region where such products were increasingly difficult to find.
“It was stressful because we were getting orders across the country at the same time that we were standing up our operations, but we were adding value, so it was also incredibly rewarding,” Schippers recalls.
More recently, Pacifiko has helped facilitate donations by working with the Mathile Institute for the Advancement of Human Nutrition, which is on a mission to end child malnutrition in Central America. When the nonprofit discovered Pacifiko, it added its micronutrient Chispuditos product to the marketplace and told its donors they could purchase a large amount through Pacifiko, after which the company could distribute it in the rural areas where families need it most.
Schippers, who is from Guatemala, takes great pride in seeing his home country’s economy evolve. In fact, contributing to Central America’s development was one of the reasons he came to MIT’s Sloan School of Management in 2011 for his MBA.
“I was really interested in the ‘mens et manus’ idea,” Schippers recalls, referring to MIT’s motto, which is Latin for “mind and hand.” “MIT exposes you to experiences in which theory and practice go hand in hand. It’s about building something that can have impact on the world. I love that mentality.”
As an MBA candidate, Schippers took classes in operations, systems engineering, entrepreneurship, and management. He also attended a presentation from Jeff Wilke SM ’93, former CEO of Amazon’s Worldwide Consumer business. The experience inspired him to join Amazon after graduation, where he helped the e-commerce giant expand to new markets including Mexico, Australia, and the Middle East.
“The expansion to Mexico and the Middle East really opened my mind to the impact this could have because those were more developing economies,” Schippers recalls.
Schippers saw Amazon’s reluctance to expand into smaller developing countries like those in Latin America, so he decided to start an e-commerce company himself.
“I saw a pocket of countries in the world, relatively small countries, where e-commerce penetration was very low compared to developed economies,” Schippers recalls. “These are places where e-commerce as a percentage of retail spending is less than 10 percent. In most developed economies, it’s 20, 30, or even 40 percent.”
There are a number of ways Pacifiko’s operations specifically cater to the region’s economies. For one thing, it offers cash payments on delivery and bank account transfers, since fewer people have credit cards. Pacifiko also offers one- and two-day motorcycle delivery through a mix of its own services and local logistics companies.
“We don’t discriminate based on where you’re buying from,” Schippers says. “The price is the same for everyone and the accessibility is the same. It’s a big value add: Independent of where you live, you have access to tens of thousands of products in one place.”
The company is also encouraging local artisans and entrepreneurs to sell on Pacifiko to spur more production in local economies.
“We want local products so people can buy things produced in their home countries,” Schippers says. “We have examples like local people writing their first book and selling it on Pacifiko, local businesses producing garments to sell through Pacifiko. It’s an additional sales channel at a very low-entry cost, and it gives them access to the country’s entire population.”
Contributing to the local economy is a central part of Pacifiko’s mission. The vast majority of Latin American businesses are family-owned. Pacifiko, conversely, has raised venture capital, and Schippers sees the company’s success as a way to attract more foreign investment in the region.
“We want to prove technology companies can be successful here,” Schippers says. “By successfully scaling a large technology company, more money should come to this region of the world. As we grow, we expect to start seeing the network effect for money coming here and more entrepreneurs building large, scalable businesses.”
As the company continues to evolve, Schippers says Pacifiko could begin offering credit to suppliers and buyers, which would unlock a new way to grow businesses in developing countries, where traditional financing is harder to come by.
“I worked at a large telecommunications company before coming to MIT, and around 2010 very few people had access to affordable data plans for smartphones,” Schippers says. “Now everyone has a smartphone in these countries. It’s great to see. I tell my team that’s what’s going to happen with e-commerce in the next 15 years.”