Latin American e-commerce is expected to double its size by 2024 and that means there is an opportunity for all types of players: from challengers and incumbents, globals and locals. This is what we have seen in the region over the last couple of years. Although some e-commerce behemoths still lead the way, companies who bet on localization strategies and mobile can also reach for the top.
In partnership with AI-based market intelligence platform Similarweb, EBANX’s study Beyond Borders 2021/2022 looked at online traffic data to identify the largest players in Latin America’s retail e-commerce. The Brazilian fintech also owns LABS.
The Argentina-based Mercado Libre, now a regional giant all across LatAm, continues to lead as the main e-commerce platform in the region, having more than 50% of the traffic among the top-10 players. But international players have gained a larger piece of the pie, with companies such as Amazon, Shopee and Walmart consistently gaining traffic and awareness in different countries.
“E-commerce has accelerated aggressively in Latin America, with many new players entering the space, which brought up a much more pulverized market in terms of online traffic”, says sales director at Similarweb, Juliana Quarantani Junkes. Interviewed by Beyond Borders, the executive explains that “in general, top players have lowered their traffic market share in different countries, with some exceptions”.
They have invested hard in logistics, user experience and brand awareness, and their engagement and loyalty metrics have increased considerably across the region, according to Similarweb. Mercado Libre posted a 67% jump in quarterly revenue as it benefited from a surge in online shopping and online payment across Latin America.
But even Mercado Libre saw its share of online traffic among the top players decrease in countries like Brazil and Mexico – where it faced new and increasing competition from both domestic and international players.
Local retailers jumping in
At the same time, domestic marketplaces and department stores like Casas Bahia, Magazine Luiza, Coppel, Bodega Aurrera and Falabella are also jumping into this hypergrowth ring.
Brazilian retailer giant Via (parent company of Casas Bahia, Ponto, and Extra.com.br) recently opened up its marketplace to third-party sellers. The company is building its footprint in digital space and has now surpassed 100,000 sellers using its platform. “We have an eye on growth and digital transformation and another on developing new business units. They both combine, there’s a little bit of feedback in this cycle we are creating”, tells Via’s chief digital officer (CDO), Helisson Lemos, in an interview with LABS.
The company has been transitioning from an offline to an online retailer, now with 65% of its sales being online. Making two deliveries per second, the company redesigned its distribution centers management. “Via puts itself in a position of being a channel where Brazilian customers can buy whatever they want, whenever they want. Logistics must be agile to be able to support this movement,” says Via’s logistics and supply executive director, Fernando Gasparini, to LABS.
In Mexico, the popular Bodega Aurrera, a supermarket chain owned by Walmart and with a massive presence in mid-to-low neighborhoods, has gone online with a lot of success. It ranks among the top 10 e-commerce websites in 2021 (in Mexico) – due not only to the adoption of online shopping by its usual customers, using vast communication campaigns on TikTok and other social media, but also to the new middle to high-income consumers looking for bargains on its website.
Global behemoths set foot in Latin America
Along with local giants, Amazon is one of the new competitors in the arena, ranking twice among the top 10 e-commerce websites in Latin America overall, and growing consistently its online traffic in different markets across the region.
The competition also comes from East Asia: the Singapore-based Shopee was, to a large extent, the fastest-growing e-commerce player in the region, with its Brazilian website expanding almost 900% in 2021 when it comes to online traffic, according to Similarweb figures. The Asian company is betting heavily in the region, with what it calls a “mobile-first strategy”.
“Shopee entered in a super aggressive way in Brazil and more recently, in Mexico. Its Mexican shopping app has been climbing positions fast in the country and is already taking local players out of the top 10”, states Junkes.
Shopee is not the only one who is craving the app market in LatAm. Having an app seems to be working out for fashion e-tailers such as SHEIN, Dafiti and Netshoes, who despite not ranking in the top 10 players when considering online traffic, are among the most downloaded shopping apps in Brazil, Mexico, Chile, and Colombia.
Regional department stores such as Liverpool and Coppel in Mexico, and Falabella in Chile and Colombia, are also having success in attracting users to their mobile applications, ranking among the top 10 players in these countries. “AliExpress, Wish and Amazon have also been delivering strong numbers of engagement in their apps”, says Junkes.
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.