Since the 20th century, Latin America has been one of the most polarized regions in the world. Brazil and Mexico are the two countries with the fastest economic growth in the region, while Haiti and Venezuela are still struggling in the mud of political fights, giving the economy little room to develop.
Influenced by geopolitics and from the colonial times, the language families and beliefs of various countries and regions in Latin America are largely interlinked. At present, the online retail scale in Latin America can reach 70 billion U.S. dollars per year, accounting for only 4.4% of the total retail sales, which is dwarfed by other countries and regions (the U.S. online retail sales accounted for 11.3% of the total retail sales).
However, with the advancement of infrastructure construction, the network environment in various regions has gradually improved. The total number of people connected to the Internet and started shopping online exceeded 267 million, accounting for 45% of the total population in Latin America. It is estimated that by 2024, this number will exceed 350 million, and the economic development of e-commerce will also usher in a blowout.
Brazil is the largest e-commerce economy in Latin America, with sales accounting for 32.5% of the country. In terms of population, GDP or land area, Brazil is the largest in the region and the only country that uses Portuguese as its official language.
Mercado Libre is the largest e-commerce platform in Latin America, with visitor traffic reaching 642 million per month. Mercado Libre’s No. 9 “little brother” Linio is the only 2 platforms on the list that does not have its own private labeled products. Americanas, Submarino and Shoptime are the three e-commerce platforms under the Brazilian B2W Group; Casas Bahia, Extra and Pontofrio are under Via Varejo; GFG from Singapore owns Dafiti, Kanui and Tricae. Most platforms focus on the Brazilian market, and only Dafiti has a lot of traffic from other regions.
Amazon, ranked #3, has opened its sites in Brazil and Mexico, trying very hard to catch up. At the same time, Mercado Libre’s traffic is 5 times more than Amazon. It is clear at a glance who is the uncrowned king of Latin America.
Inspired by the eBay model, Mercado Libre (called Mercado Livre in Brazil) was founded in 1999 in Argentina. eBay also invested in Mercado Libre from 2001 to 2016. Today, Mercado Libre has 642 million visitors per month from 18 countries in Latin America. Brazil is the largest source of traffic accounting for 39%, followed by Argentina and Mexico with 22% and 18% respectively.
Although it does not have private label product as Amazon does, Mercado Libre has never stopped building its business ecosystem. It has launched the following services:
- Mercado Pago – Online payment, offline payment and loans;
- Mercado Ads – Paid promotion (formerly Mercado Publicado);
- Mercado Shops – an independent e-commerce platform;
- Mercado Envíos – Logistics;
Mercado Libre has more than 11,000 employees in 7 offices in Argentina, Brazil, Mexico, Venezuela, Chile, Colombia and Uruguay. In 2007, the company was listed on the Nasdaq Stock Exchange.
Mercado Libre started from cloning eBay model and then became a typical e-commerce marketplace. Similar “copycat” include Poland’s Allegro and New Zealand’s Trade Me, but Mercado Libre has succeeded in evolving the business and even surpass eBay in market share.
Global sellers can enter Mercado Libre through the Cross-Border Trade Program to connect with consumers from Brazil, Mexico, Argentina and Chile. In terms of logistics, sellers are also given full autonomy to choose. Sellers can choose between direct mail, Mercado Envíos, and 3rd party logistics providers. Mercado Libre is also equipped with a machine translation tool. Sellers do not need to worry about the exchange rate fluctuation problem in Latin America. The system will convert it into U.S. dollars for settlement. The commission in Mexico is 17.5%, and the commission in other countries is 16%.
Lojas Americanas is the parent company of B2W Group. B2W Group owns three e-commerce platforms: Submarino, Americanas and Shoptime. Americanas and Submarino were founded in 1999, acquired Shoptime in 2005, and merged into B2W Group in 2006. Americanas has become the largest traffic platform with 134 million visitors per month, and the traffic of Submarino and Shoptime is roughly 33 million per month and 14 million per month.
Americanas not only has a wide range of products, generates high consumer traffic, but also designs a sub-website Americanas Empresas for corporate group purchases. Submarino targets young audiences and focuses on high-tech products, fashion and sports products. Shoptime focuses on home furnishing products, beauty and personal care products.
All three e-commerce platforms belong to the same parent company. Sellers can register the above three platforms at once. However, sellers must register their business in Brazil. The platform will charge a 16% commission fee (including delivery fees). B2W Group also has logistics services similar to Amazon FBA.
Note: Submarino, Americanas and Shoptime prohibit direct access by visitors outside Brazil
Amazon’s two major sites in Latin America
Amazon is the third largest e-commerce platform in Latin America. The traffic in Mexico and Brazil is 63 million per month and 54 million per month, accounting for only 2% of Amazon’s global traffic, which is far from the United States and the European Union. Amazon opened its Mexico site in 2015 and its Brazilian site in 2017. In fact, Amazon was already active in these two countries before that, but only sold electronic products. These two sites are no different from other sites. Amazon has invested a lot of financial and human resources to build supporting logistics facilities.
The Mexico site belongs to Amazon’s North American joint account, which means that sellers who register for the US and Canadian sites can use their existing accounts to directly enter the Mexico site. In terms of logistics, sellers can choose FedEx, DHL and UPS or Amazon FBA, but they need to have a local business address in Mexico to clear customs.
The Brazil site is only open to local sellers in Brazil. International sellers who want to settle in need to find a local agent.
Via Varejo is the second largest e-commerce platform in Brazil and has many similarities with B2W Group. Via Varejo has more than 1,000 physical stores throughout Brazil and has three e-commerce platforms: Casas Bahia, Extra and Pontofrio. The three platforms have their main product category like electronic products and household appliances. The number of visitors to each platform is 36 million per month, 17 million per month and 14 million per month. The omni-channel GMV in R$ 38.8 billion (roughly 7 billion) USD, an increase of 21% compared to 2019.
Sellers can list products on 3 platforms by registering one account, provided they have a business address in Brazil. Registering as a seller does not need to pay a monthly fee, but need to pay a commission (the commission ratio is different for each category). Via Varejo has also acquired many assistant software to help sellers manage inventory and orders, and calculate logistics costs.
Other e-commerce platforms in Latin America
GFG owns many e-commerce companies around the world. The more famous ones are lamoda in Russia, The Iconic in Australia and Zalora in Southeast Asia, as well as the “3 golden flowers” in Latin America-Dafiti, Kanui and Tricae.
Dafiti has 30.4 million visitors per month. Brazil (57%), Argentina (17%), Colombia (17%), and Chile (9%) are the major sources of traffic. Dafiti focuses on apparel, sporting goods and household products category; Kanui on sports and outdoor products; Tricae on children’s clothing. Kanui and Tricae only target consumers from Brazil, with 2.5 million visitors per month.
Netshoes, headquartered in Brazil, is mainly engaged in sports shoes, clothing and equipment, with 22.5 million visitors per month. Netshoes started with physical retail in 2000, gradually moved online in 2002, closed the physical store in 2007, sponsored many sports events in Brazil, was eventually acquired by Magazine Luiza in 2019. Currently, Netshoes only open to sellers registered in Brazil.
Linio is 15 million monthly unique visitors. Here is the traffic breakdown: Colombia (30%), Chile (23%), Mexico (20%), Peru (19%) and Argentina (6%). The official language of the Linio platform is Spanish, so Brazil has not yet been involved. Linio does not have a direct traffic entrance in Argentina, but uses its sister company Falabella to connect with Argentine users. Linio has an English interface, and they also have English-speaking customer service staff to help international sellers solve problems.
Wish is a global e-commerce platform known for its “fast fashion” and low cost. Most of its products are shipped from China. Wish sellers are all over the world, and roughly 10 million/month traffic comes from Brazil, accounting for 9% of Wish’s global traffic.
Privalia is mainly engaged in fashion fast-moving consumer goods. Its parent company is French e-commerce platform Veepee. Consumers from southern Europe and Latin America are its main traffic sources. With 6 million unique visitors per month, 32% comes from Italy, 28% comes from Brazil, and 27% comes from In Spain, 12% are from Mexico.