Another emerging market is booming! A large number of Chinese sellers follow AliExpress into the market

The online shopping craze triggered by the epidemic has made the cross-border e-commerce industry the talk of the town. New sellers continue to enter this market, eager to make a fortune.

However, as the world enters the post-epidemic era, the industry's dividends are fading, and sellers are also complaining. Market saturation, rising costs, and declining order volume ... The living environment of cross-border sellers is full of challenges.

Therefore, looking for emerging markets for layout has become a consensus among many cross-border sellers.

All signs indicate that Latin America is becoming the next blue ocean market for cross-border e-commerce.

Latin American market is booming! Chinese sellers still need to overcome many challenges

In recent years, the Latin American e-commerce market has experienced rapid development. According to eMarketer statistics, the current market value of Latin American e-commerce has reached 362 billion US dollars. It is expected that by 2025, the compound annual growth rate will reach 25%.

In addition to the rapid growth of e-commerce, the Latin American market also has a huge demographic dividend. Currently, the total population of Latin America has reached 651 million , about twice that of the United States. This is a huge and underdeveloped market.

Moreover, the Internet is becoming increasingly popular in Latin America, with Internet coverage exceeding 60%. Online shopping has become the choice of most consumers, with more than 200 million people shopping online , which holds huge development potential.

Speaking of the booming Latin American market, Wu Jun, head of category planning and market insight for AliExpress Latin America, said in an exclusive interview with Ennet that the bonus window for the Latin American market has gradually opened in the past two years. From a macro perspective, as the world's fourth largest economic sector, Latin America will have the fastest growth rate in e-commerce in the next few years, driven by the increasing demand of Latin American people for cost-effective products.

Public data shows that the CPI index in Latin America is as high as 12%, while in China it is 1%.

Compared with other developed countries and regions, the user acquisition cost in the Latin American market is also very attractive. As more platforms and industry chain service providers enter this track, the corresponding fulfillment and service costs will further decrease. Of course, this window period will not always exist, and sellers who want to expand into new markets must catch up with this express train as soon as possible.

However, Chinese sellers need to overcome many difficulties when entering the Latin American market.

Wu Jun believes that we must first pay attention to local needs. We should shift from focusing only on "what I have" to paying more attention to "what I can do to satisfy local users", respect the unique product and service needs of local users, and select products and services in a targeted manner as well as customize products and services.

Secondly, the selection of product categories must be compliant. While completing the corresponding certifications that meet the requirements of Latin American countries (such as Anatel for wireless communications, Immetro for electrical appliances, Anvisa for health and hygiene, etc.), the declared names of goods must be refined and comply with local market rules.

Then, we should be tolerant of logistics time efficiency. We should acknowledge the remoteness of physical distance and include comprehensive logistics time efficiency in the criteria for selecting the main operating platform. Of course, we can also look for some platforms with better logistics and warehousing construction to join. Currently, AliExpress is one of the fastest platforms in the world for cross-border delivery between China and Pakistan.

Wu Jun admitted that after overcoming the above difficulties, choosing the right target market is also crucial. The market opportunities in Latin America are actually supported by several core countries in Latin America. Not only is the overall growth rate of the sector high, but the growth rates of markets including Brazil, Mexico, and Chile in the next few years will all lead the world. Of course, there are also obvious differences between them.

Specifically, Brazil and Mexico are two of the largest e-commerce markets in Latin America. Driven by high domestic inflation and high taxes, consumers' acceptance of e-commerce has accelerated , but there is still room for improvement in logistics and payment systems. Although Chile's e-commerce scale ceiling is not high, its per capita GDP is the highest among Latin American countries, and users have strong purchasing power. It is also a good choice to make key breakthroughs in vertical categories.

Entering Latin America! AliExpress GMV and orders are growing every year

Currently, the mainstream e-commerce platforms in the Latin American market are Mercadolibre, Linio, Dafiti, Americanas, AliExpress, SHEIN and Shopee.

The competition among major e-commerce platforms in the Latin American market is quite fierce. How did AliExpress gain a leading position in the fierce market competition?

In Wu Jun's opinion, it is very important to clarify the platform positioning. Different platforms have different target user groups, platform mentality among users, and investment methods. What needs to be targeted is the pain point of Latin American users' strong demand for cost-effective products in the context of high inflation.

It is also necessary to continuously reduce costs and improve efficiency for merchants , such as the full hosting service launched this year, which helps merchants in need to focus only on providing a high-quality product supply chain, while leaving platform operations and consumer services to the platform.

At the same time, speeding up logistics is also very important. AliExpress strives to speed up logistics to one of the fastest in the world. AliExpress has currently increased the number of charter flights to 8 flights per week, which can achieve fast delivery to the core cities in the seven southeastern continents of Brazil.

How should we further open up the local market when entering Latin America ?

Wu Jun said that the first step is to conduct in-depth research and communication on local demand characteristics. Research on market/user/festival/category trends in Latin America is conducted and shared with merchants in the form of monthly merchant reports to reduce the difficulty of merchant information acquisition and improve operational efficiency.

Secondly, the logistics speed has been increased to one of the fastest in the world . AliExpress has increased the number of charter flights to 8 flights per week, which can achieve short-time delivery to the core cities in the seven southeastern continents of Brazil.

Then there is logistics delivery /reverse insurance. We offer a wide range of insurance services for merchants, providing compensation services for problems that occur during transportation and customs clearance, and reducing business risks .

Finally, we provide interest-free /low-interest installment payment services. AliExpress takes advantage of the fact that Latin American people have a strong preference for installment payments for shopping. The platform has launched interest-free/low-interest services and supports local mainstream payment methods to help improve consumers' user experience.

In the past three years, AliExpress has achieved high growth in both GMV and orders every year.

In addition to platforms such as AliExpress, many big sellers are also focusing on developing the Latin American market. Shenzhen big seller Huakai Yibai disclosed that the company's sales in Latin America are currently growing rapidly and will focus on the Latin American market in the future.

Overall, the current Latin American market has entered a period of rapid growth and dividends, which is a good time for sellers to enter the market.

On April 11, at the 2023 Sixth Cross-border E-commerce Internet Marketing Conference hosted by Yien.com, Wu Jun will bring a wonderful sharing on the theme of " It's the Right Time to Dig Gold in Latin America ". You can scan the QR code below to register for the conference and listen to Wu Jun's sharing face to face .

Latin American Market

AliExpress