It’s been almost a decade since the first international retail e-commerce titan debuted in Latin America: AliExpress, from the Chinese behemoth Alibaba Group, started its operations on the region in Brazil. Since then, dozens of global players have dove into this territory, gaining the loyalty of consumers in the region, and are now exploring a new path: going hybrid.
In the largest markets in LatAm, companies such as the US-based Amazon and Asian marketplaces Shopee and AliExpress are increasingly attracting domestic sellers to their platforms – in some cases already having more national than international sellers in Brazil, according to new data provided by Crawly — a data intelligence company specialized in the development of robots for data collection and structuring.
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The findings are part of the Beyond Borders 2021/2022 report, published by the Brazilian payments fintech EBANX, which also owns LABS.
In response, local retailers are launching their own ‘international shelves’, with players such as Americanas, Casas Bahia, and Mercado Libre already having up to 20% of their products being international offerings in Brazil.
The report points to a new trend in Latin America: the hybridization of retail marketplaces — which is amplifying the product range offered in platforms, attracting small and medium businesses and entrepreneurs to the digital world. According to Beyond Borders analysis the strategy allows global and local players to compete head-to-head for Latin Americans’ preference.
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“At the end of the day, through technology, everyone can be domestic, everyone can be international – so there is not so much a divide”, says Payments Practice Leader at AMI (Americas Market Intelligence), Lindsay Lehr, in an interview published in EBANX’s report.
Domestic versus international
The data gathered by Crawly shows the strength of this trend in Brazil – the largest e-commerce market in the region and a benchmark for other LatAm countries.
Through web crawling, data scraping and data analysis, the company analyzed the full range of products offered by six different marketplaces in Brazil (half of them international and half local), in early September 2021 – AliExpress, Shopee, Amazon, Mercado Livre, Americanas and Casas Bahia. The compilation considered the first hundred product pages in each website (as the most relevant products are within these pages), and divided both products and sellers into domestic versus international.
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Overall, more than 750,000 items, sold by more than 230,000 sellers, were considered in this analysis. At this point, data showed that this hybridization trend is definitely stronger among international marketplaces. The share of Brazilian sellers within these platforms reaches 28% overall – and, most importantly, local sellers are already responsible for 64% of the products available to the Brazilian customer.
Among local marketplaces, the share of international sellers is small, reaching less than 1% overall, although they already account for 8% of the products offered by the three players considered for this analysis. However, recent partnerships announced by companies such as Via (parent company of Casas Bahia) and Americanas are aimed at expanding their international offerings and have the potential to change this in the short term.
Global going local
When it comes to price, in general, national products are cheaper than the international ones in global marketplaces, at least in the case of the three companies considered for Beyond Borders analysis. This also leads to the hypothesis of an economic factor involved in the global players’ decision of opening their platforms to local sellers – so they can offer cheaper options combined with faster delivery.
The Singapore-based Shopee has more domestic sellers in Brazil than cross-border sellers. AliExpress, on the other hand, has recently opened its platform to local sellers in Brazil (for the first time in the Americas), with very competitive rates and free shipping for national orders over BRL 502.
Global giant Amazon is doubling down on attracting more domestic sellers to its platform, having recently launched logistics and loyalty incentives for Brazilian third-parties to sell in its marketplace.
Ariel Patschiki, CPO (Chief Product Officer) at EBANX, believes that this phenomenon has a lot to do with global retailers’ maturity stage, after spending so many years in the local market in Latin America.
“Not only the shopping experience improved, in terms of logistics, payments, inventory – but the level of trust in these retailers also increased”, says Patschiki. “Maybe, in the near future, consumers will not even be concerned about where the product is coming from, if it’s imported or not. Because the level of trust in these international companies will be extremely high.”
A two-way street
At the same time (but not in the same pace), big local marketplaces are also increasingly investing in international offerings. According to data from Crawly, this is not yet such a widespread strategy, since the share of global products in the three Brazilian marketplaces analyzed by this study is still at 8%. Nevertheless, there is definitely room to grow, given that less than 1% of sellers registered in these platforms are considered international.
For the moment, local titans seem to be kicking off their international expansion by investing in specific partnerships. This is the case of Via, one of the biggest retailers in Brazil (owner of Casas Bahia and Ponto), who has recently closed an agreement with the Uruguayan gateway nocnoc, connecting the marketplace with over 70,000 imported products from China and the United States.
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But it will be a matter of time for local players to have a more significant share of international products. Americanas, for instance, has invested in weekly chartered flights from China and is already delivering international packages from Asia within 11 days.
“In general, international players will have some best practices that the local players don’t have, and vice-versa, so everyone can learn from each other”, says Lehr, from AMI.
In addition to the battle for consumers and market share, the initiative of global and local players in bringing in thirdparty sellers to their marketplaces is also contributing to SMBs (small and medium businesses) and entrepreneurs across Latin America to go online.
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International companies are also embracing the goal of bringing small businesses to the online space.
“We will not only be able to serve Brazilian consumers, but also contribute with our technology to the growth of small and medium businesses in Brazil, the development and digitization of the Brazilian economy”, said Yaman Alpata, Head of AliExpress Marketplace in Brazil, driving the launch of its platform to local sellers.
The Beyond Borders report is issued annually by the Brazilian fintech company with global operations EBANX. Take a look at the full Beyond Borders 2021/2022 survey here.