A long road ahead for foreign competition
Latin America's growing adoption of e-commerce in recent years has prompted several industry giants to seek a piece of the pie. Mexico and Brazil have played a defining role in this regard. In 2021, both were among the Latin American countries with the most visits to Amazon and AliExpress sites. Even so, regionally, the two marketplaces face stiff competition from local players and remain far behind frontrunner Mercado Libre. In addition, local websites remain buyers' top choice when spending their money online. By the end of 2022, domestic e-commerce spending in the region was expected to be more than five times higher than cross-border. Although shopping expenditure via international sites was forecast to increase by 20 percent in 2023, it would still account for less than a quarter of the total market that year.Marketplaces: a second life for traditional retailers
Mercado Libre has inspired retailers across Latin America to go online. Chilean holding company S.A.C.I. Falabella is a case in point. The group, which already had an e-commerce segment for each of its stores, namely Falabella Retail, Sodimac, and Tottus, added online marketplace Linio to its portfolio in 2018. As part of its goal to compete as a genuine marketplace, the company took another strategic step in August 2021, integrating all its business units in Chile into a single platform.Meanwhile, in Brazil, multi-retailer Magazine Luiza also launched its marketplace halfway through 2016. Five years later, third-party online sales amounted to 13 billion Brazilian reals, almost double the figure recorded in 2020 amid the COVID-19 pandemic. Even after the crisis, small sellers and large retailers continue to invest heavily in their digital channels. In 2021, Brazilian retail chain Lojas Americanas S.A. and online marketplace B2W Digital merged to form Americanas S.A., seeking to rival Magazine Luiza and Mercado Libre. One year later, its e-commerce segment had grown by over five billion reals.
