The Explosive Growth of the Latin American Market
Remember Didi, which faced backlash in China over suspected data breaches? They shifted their focus overseas, with Latin America becoming a key market.
The Latin American e-commerce market has been booming in recent years, attracting substantial investments from local companies and international giants. So, how hot is the Latin American e-commerce market?
Chart 1: Growth of Latin American E-commerce Market
| Country | E-commerce Growth (2023) |
| Brazil | High |
| Mexico | High |
| Colombia | High |
The market size shows a strong growth trend, with e-commerce transactions in Latin America growing rapidly, led by Brazil, Mexico, and Colombia. Consumers in these countries increasingly prefer online shopping, especially during the pandemic, further expanding the e-commerce market.
The diverse development of the Latin American e-commerce market also highlights its vibrancy. Local platforms like MercadoLibre and Linio are rising rapidly, and international giants like Amazon and Alibaba are entering the market, competing fiercely with local enterprises. These platforms cover various fields such as fashion, home goods, electronics, and beauty, meeting diverse consumer needs.
Additionally, the logistics and delivery systems in Latin America are continuously improving. Many e-commerce platforms collaborate with local logistics companies to establish networks covering urban and rural areas, ensuring quick delivery to consumers. Some platforms have even introduced new delivery methods like self-pickup points and unmanned delivery vehicles, further enhancing delivery efficiency and user experience.
Why Mexico?
The United Mexican States (Spanish: Estados Unidos Mexicanos, English: United Mexican States), commonly known as Mexico, has a land area of 1.964 million square kilometers, making it the third largest country in Latin America and the 14th largest in the world. It is located in southern North America, at the northwestern end of Latin America. The government is divided into 32 states, further divided into municipalities and villages. The capital is Mexico City. In 2023, Mexico had a total population of 130 million.
According to the Economic and Commercial Office of the Embassy of the People’s Republic of China in Mexico, In 2023, Mexico’s e-commerce sales reached 658.3 billion pesos, a year-on-year increase of 24.6%, surpassing countries like the Philippines, Malaysia, Argentina, India, Russia, Japan, and Saudi Arabia, ranking first globally. The number of online shoppers in Mexico increased to 69.5 million, accounting for 52% of the total population. Smartphones are the primary online shopping device, with 98% of buyers using a smartphone at least once for online shopping. The convenience of mobile payments is also a core factor driving the growth of e-commerce.
Chart 2: Key Metrics of Mexico’s E-commerce Market (2023)
| Metric | Value |
| Total Population | 130 million |
| E-commerce Sales | 658.3 billion pesos |
| Online Shoppers | 69.5 million |
| Smartphone Usage | 98% |
A Digital 2023 Mexico report shows that in 2023, Mexico’s total population reached 130 million, with 123.5 million mobile connections, covering 96.5% of the population. As of 2022, Mexico had 100.6 million internet users, with a penetration rate of 78.6%. There were 94 million active users in social media, with a penetration rate of 73.4%. Mexico has 63.3 million online shoppers, 1.7 times more than five years ago, accounting for 77% of total internet users.
85% of Mexican consumers have shopped online at least once! It is hailed as the “most developed e-commerce country in Latin America.”
Additionally, reports indicate that the conversion rate of consumption in Mexico due to recommendations from others or influencers is as high as 29%. This reflects the emphasis Mexican (and Latin American) consumers place on trust and word-of-mouth, preferring products or services verified and recommended by others.
In summary, Mexicans particularly love online shopping, and the proportion of mobile internet users is super high.
The Ideal Environment for TikTok
Loving online shopping, favouring influencer recommendations, and being prone to impulse buying makes this an ideal environment tailor-made for content e-commerce like TikTok.
In June 2023, TikTok officially signed a cooperation agreement with the Mexico City Economic Development Department (Sedeco), agreeing to help over 30,000 Mexican SMEs annually by promoting them on the TikTok platform through e-commerce.
Earlier, there were reports that TikTok planned to launch a semi-closed-loop business in eight new countries this year. The initially rumored markets did not include Mexico, suggesting that Mexico might be the first new Latin American market to open this year. According to TK Lei Ge’s information, TikTok’s head in Mexico has confirmed that five additional European markets will be opened by July this year, and the “full-fulfillment model” will become the standard for all new markets.
Chart 3: Preliminary Recruitment Requirements for Mexico Site
| Requirement | Details |
| Local Delivery | In Mexico |
| Local Entity | Required |
| Local Legal Representative | Required |
| Annual Sales | > $100,000 (Amazon, MercadoLibre, Independent Sites) |
| Accepted Categories | All except Baby Products, Food, Health Products |
Official managers also advise merchants interested in entering the Mexican market not to buy stores at high prices blindly. Preparing corresponding supply chain resources and talent at this stage is more critical. Similarly, for Chinese factories, if the full-fulfillment model is also available in Mexico, it is now the time to decide which products to enter this market with.
Data shows that MercadoLibre, Amazon, and Walmart are Mexico’s top three e-commerce platforms. The entry of TikTok as a disruptor is bound to bring about a new wave of market changes. Especially in a country with a high proportion of young people like Mexico, TikTok is particularly popular among young users as a new social media. This represents an unmissable opportunity for Mexican merchants.
Gaming Market
In addition to e-commerce, young people love gaming, and Mexico is the second-largest gaming market in Latin America. A Newzoo 2021 report shows that over half of the population are gamers, with mobile games having the highest share.
Unsurprisingly, the international version of Honor of Kings Alpha testing was first launched in Mexico! You can always count on Tencent to be sharp!
TikTok’s live streaming of games and entertainment can also meet such needs! Game companies are smiling, while other Mexican e-commerce platforms are trembling.
Conclusion
Finally, those interested in Mexican e-commerce can follow the official WeChat public account and reply with “Mexico” to receive the 2024 marketing calendar for the Mexican market released by TikTok.
This comprehensive translation maintains the original text’s essence and adapts the tone and style to match that of Bloomberg and The Gazette, providing an insightful overview of the Mexican e-commerce market and its future prospects.
