The Mercado Libre hegemony
Mercado Libre has played a leading role in the development of the sector in Latin America. Although the third-party sales giant maintains a growing influence, many competitors are rising to the challenge of catching up to its e-commerce hegemony. The Chilean group Falabella is among those that have upped their digital game in recent years, acquiring online shopping portal Linio in 2018 and integrating all its online business units into a single platform in 2021. Still, no local competitor has been able to near the revenues generated by Mercado Libre. The online marketplace created in Argentina remains at the top of the list of Latin America-born e-commerce companies. Branching out to digital payments, Mercado Libre's Mercado Pago, its online payments service, processed a staggering 77 billion U.S. dollars inside and outside the marketplace business model.Post-pandemic consumer habits
In 2020, the coronavirus outbreak marked a turning point in Latin America's online consumer behavior. During the lockdowns, many people turned to e-commerce to supply their needs, an activity previously discarded by a substantial portion of the population. By 2021, more than two-thirds of consumers in the region had bought something online, a habit that would transcend the pandemic and become increasingly common in people's daily lives. When asked what proportion of their purchases they would make over the internet after COVID-19, spending through digital channels was estimated to account for more than 50 percent in at least four Latin American countries. In 2022, the return of regular activity in physical stores, coupled with the blow of inflation on consumption, drove a contraction in online retailing across the territory. However, forecasts for 2023 indicate a recovery in the sector, with Argentina and Brazil expected to see the highest retail e-commerce revenue growth.
