Image source: Figureworm Creative
From the heavy deployment of Shopee in Brazil at the beginning of the year, to the recent Latin American e-commerce giant Meikeduo, who wants to open a new round of sellers to enter the investment, the blue ocean of e-commerce in Latin America is attracting the attention of many Chinese sellers.
Breaking through the $300 billion mark, Latin American e-commerce ushered in the spring
Even in the context of the impact of the new crown epidemic on global trade, the trade volume between China and Latin America in 2020 still broke through the $300 billion mark for the third consecutive year, and since the first half of this year, China-Latin America trade has continued to soar, with an increase of 45.6% year-on-year, showing strong resilience.
From the perspective of the overall e-commerce market, the scale of online retail sales in Latin America can reach $70 billion per year, accounting for only 4.4% of the total retail sales, dwarfed by the "neighbor" of the United States.
In recent years, with the advancement of Internet infrastructure, the online shopping population in Latin America has increased suddenly, exceeding 267 million, accounting for 45% of the total population of the region. This figure is expected to reach a staggering 350 million by 2024.
With the ongoing e-commerce economy superimposed on the online population, Latin America is becoming another emerging market that has attracted the attention of Chinese sellers after Southeast Asia.
According to Hugo Cross-Border, many sellers are radiating the Latin American market through cross-border e-commerce such as Amazon, AliExpress, Shopee and Mercado Libre, a local e-commerce company in Latin America, and stepping up the pace of global expansion.
E-commerce platforms talk about traffic and scale. Compared with cross-border platforms, local e-commerce Meikeduo has a natural advantage in the Latin American market. Although it does not have its own brand like Amazon, Methot still relies on its local genes to be more fans in Latin America. The platform currently covers 18 countries in Latin America and has 642 million visitors per month. Brazil, the largest economy in Latin America, accounted for the largest source of traffic on the platform with a high share of 39%, followed by Argentina and Mexico, accounting for 22% and 18% respectively.
(Source: Webrtailer)
With the popularity of Chinese goods in Latin America, Meikeduo has gradually increased its recruitment efforts for Chinese sellers and continuously optimized the business ecosystem such as payment and logistics. On the upcoming November 19th, Merkeduo is also about to open a new round of platform investment activities "2022 Sailing to Latin America - Mercardo Libre Hangzhou Investment Conference".
According to relevant industry insiders, due to the lack of home, outdoor sports and other categories of sellers, the platform's investment in China will focus on absorbing sellers of scarce categories to settle in the platform, and these categories have a large market in Latin America, which relies on imports.
Air freight rose $16, and freight rates reached a new high!
When more attention is focused on the emerging market of Latin America, problems follow. "Difficult customs clearance, logistics difficulties" is the seller's general feedback on the Latin American market. Indeed, although the languages and beliefs of various Latin American countries and regions are generally the same due to geographical factors, there are huge differences in customs policy procedures between Latin American countries. In addition to customs fees and duties, some products may have to wait more than 30 days to clear customs clearance, especially in Brazil and Argentina. As a result, cross-border sellers often need to prepare goods in advance, inventory and logistics costs increase, and buyers also need longer signing times.
Since the outbreak of the epidemic, the instability of the global logistics environment has exacerbated the high freight rates of Latin America to countries. The data shows that in 2020, Latin American air freight logistics rose by nearly 3 times compared with the highest in 2019, a huge increase. Although air freight prices fell back in late May last year, they remained rising and remained at a high level.
Recently, a freight forwarder revealed that the price of air freight from Shanghai to Latin America rose by $16 per kilogram.
Compared with air freight, the problem faced by latin American road freight is insufficient space. Under the epidemic situation, on the one hand, the shortage of manpower and the congestion of ports have led to the extension of the sea transport cycle and the reduction of sea routes. On the other hand, the number of goods arriving in China from overseas has decreased, and many shipping companies have cut some routes in order to reduce shipping costs, and the reduction of cargo ships has directly led to the increase in export freight rates.
In the case of soaring air freight rates and the challenges of front-end logistics such as the soaring air freight rates and the "hard to find a cabinet" for shipping, for most Latin American sellers, more attention needs to be spent on the logistics layout.
Hugo Cross-Border learned from the Industry's Weishi Internet of Things (360Lion), which is deeply involved in the field of Latin American logistics, that since the epidemic, the number of consultations related to Latin American routes has generally increased. As the China GSA (General Sales Agent) of many overseas airlines, Weishi chartered more than 100 flights in 2020 alone. At the same time, in order to solve the problem of cargo front-loading, Weishi has opened a Mexican overseas warehouse in 2021 on the basis of Special Line services in Mexico, Brazil, Chile, Peru, Colombia and other Latin American special lines, and invested in intelligent robots on a large scale.
"At present, each line in Latin America has its own normalized charter flights, and strives to ensure stable timeliness and smooth logistics throughout the process." The head of logistics for its Special Line for Latin America further added.
Under the background of the vigorous development of e-commerce in Latin America, Weishi has also stepped up its cooperation with major e-commerce platforms while ushering in more development opportunities. At present, Weishi not only cooperates closely with Amazon, Shopee, Merkeduo, B2W, Linio and other international and Latin American e-commerce platforms, but also provides platform sellers with a full range of one-stop logistics solutions such as private line packets, FBA/FBM headway, and overseas warehouses. At the same time, it also provides end-to-end logistics services for many independent station brands, and further expands its logistics ecology in Latin America. Recently, Weishi has been a co-organizer of the "2022 Sailing for Latin America - Mercardo Libre Hangzhou Investment Promotion Conference", and has deeply participated in the platform's official "recruitment activities".
In this regard, the relevant person in charge of Weishi said that in this cooperation with the Multi-platform of Meike, Weishi hopes to obtain more real feedback from the seller, and constantly improve its own logistics infrastructure to solve the existing logistics needs of sellers who collect more handheld admission tickets.