Compared to other popular minority language markets, the vast Latin American market covered by Spanish has not been deeply studied and developed. Many e-commerce giants with a keen sense of smell are gradually turning their attention to this “new blue ocean” and betting on it. In 2014, AliExpress focused on developing sites in Brazil and Spain; in July of the same year, eBay expanded its global delivery plan and added 6 Latin American countries; throughout 2014, Latin America was the fastest growing market for Amazon’s business. It is not difficult to see from the frequent actions of giants such as AliExpress, eBay, and Amazon in Latin America that the Latin American market is a real “potential stock”.
Compared to the Southeast Asian market, Latin America is a relatively unfamiliar market for Chinese people, but it is also the next rapidly developing e-commerce emerging market with huge development potential. The main reasons why the Latin American e-commerce market is optimistic are the relatively young population structure, the increase in the number of potential consumers brought about by the demographic dividend, the increasing Internet penetration rate, and the widespread use of social media.
Although there are several major local e-commerce websites in Latin America, the total e-commerce volume only accounts for 5% of the overall retail market. International e-commerce giants such as Amazon and AliExpress are eyeing the Latin American market, which has a lot of room for growth.
1. Amazon
Amazon’s entry into the Latin American market started in Brazil: In 2012, Amazon first launched the Kindle e-bookstore in Brazil, and further sold physical printed books in 2014. In October 2017, Amazon Brazil opened to third-party sellers. As of December 2017, the number of sellers on Amazon Brazil reached 1,700. Amazon will continue to expand the sales scope of electronic products, including TVs, monitors, computers, digital cameras, mobile phones and accessories.
Amazon launched the Amazon Mexico site in June 2015. Since the use of credit cards by local consumers in Mexico is not high, as many as 80% of consumers in the country tend to pay with cash, Amazon cooperates with the local 0xxo convenience store, where consumers can buy Amazon gift cards. The original prepaid cards of Oxxo convenience stores can also be used on the Amazon platform, which greatly increases the trust of local consumers.
In March 2017, Amazon launched the Prime membership system in Mexico, providing free shipping services for more than 20 million products, and some areas can be delivered in one day. In May 2018, in order to shorten the delivery time, Amazon launched further cooperation with Oxxo convenience stores: consumers can go to nearby Oxxo convenience stores to receive and pay for the goods purchased on Amazon.
Currently, there are 13,000 Oxxo convenience stores in Mexico, through which Amazon’s tentacles have been initially spread.
However, despite its great success in the United States, Amazon still finds it difficult to quickly replicate this successful model in Latin America. In the past five years, Amazon has been exploring the Latin American market, and has tried the waters in Brazil, Argentina, Chile and Mexico, but the progress has been slightly slow. It seems that it will not be a matter of one day or one night to eat the “big cake” of the Latin American market.
2. Alibaba
Over the past decade, China and Latin America have been developing close economic and trade cooperation, which has contributed to the 22-fold increase in the scale of trade between China and Latin America. At the same time, China is also an important trading partner of Brazil, Chile, Peru and other countries. China’s e-commerce giant Alibaba has seized this rare trend and actively expanded its layout in Latin America.
In early 2013, AliExpress, a subsidiary of Alibaba Group, transformed into an overseas shopping platform and actively expanded overseas emerging markets, which was widely recognized by consumers in Brazil.
In 2014, the monthly page views of AliExpress in Brazil reached more than 10 million. In the same year, Alibaba further established a partnership with the Brazilian Post (Correios), using the Brazilian Post’s stations and storage facilities throughout Brazil to complete the “last mile” delivery service and speed up the delivery of packages.
In 2017, Alibaba signed an e-commerce cooperation agreement with Argentina and Mexico, including: helping Argentina sell food and wine to China; Alibaba and Mexican companies share logistics and payment methods. When visiting Argentina and Mexico, Jack Ma also publicly stated that Alibaba will regard the Latin American market as a key target for long-term development and expects to invest 10 years of efforts to develop e-commerce in Latin America.