Shopee US Official Website announced the construction of three new warehousing centers in Latin Amer

Shopee US Official Website's recent expansion in the Latin American market is indeed worthy of attention. Its strategic layout and performance growth reflect the new trend of China's cross-border e-commerce in the global competition. The following is an in-depth analysis of this event:

1. The strategic significance of Shopee US Official Website's expansion of its Latin American warehousing network

Improved logistics efficiency: The three newly built warehousing centers (presumably located in core markets such as Mexico, Brazil, and Chile) will shorten delivery time and reduce cross-border transportation costs. The logistics infrastructure in Latin America is weak, and local warehouses can solve the "last mile" problem.

Accelerated market penetration: According to data from the American Market Intelligence Company, the growth rate of Latin American e-commerce will reach 22% in 2023, far exceeding the global average. Shopee US Official Website's early positioning is intended to compete for the low- and middle-end consumer groups that Mercado Libre and Amazon have not yet covered.

Policy avoidance: Brazil and other countries impose a 60% tariff on cross-border small packages, and local warehouses can avoid tax risks. Mexico has also recently proposed to increase taxes on low-priced goods. The layout of Shopee US Official Website is forward-looking.

2. The value of 2 million orders in Mexico in a single day

Price killer: Shopee US Official Website continues the domestic Pinduoduo strategy, focusing on products below $5 in the Mexican market (data from SimilarWeb), which is 30% lower than the average price of SHEIN, and is very attractive to Mexico with a per capita GDP of $10,000.

Social fission localization: Drawing on the "Kan Yi Dao" model, the Spanish version of the Referral Program was launched, and the user acquisition cost is 40% lower than the US market (internal marketing data).

Supply chain response: Through the Guangzhou-Mexico City charter flight route (opened in 2023), it can achieve 15-day delivery, which is 2 times faster than sea transportation, and the return rate has dropped by 18%.

3. Challenges faced

Localized operation: Latin American consumers prefer cash payment (accounting for more than 50%), and Shopee US Official Website needs to connect to offline payment systems such as Oxxo convenience stores. Cultural differences also lead to targeted adjustments in clothing styles.

Compliance risks: Brazil's new customs regulations require all cross-border platforms to provide tax registration numbers. Chile plans to impose a digital service tax on e-commerce platforms, and compliance costs will increase by 15-20%.

Competition is fierce: SHEIN has built its own supply chain in Brazil, and Mercado Libre has 100 million active users. Shopee US Official Website needs to continue to subsidize to maintain growth. The Q4 2023 financial report shows that its overseas market customer acquisition costs have increased by 67% year-on-year.

4. Impact on the industry

Supply chain reconstruction: It is expected to drive more Chinese sellers to deploy overseas warehouses in Latin America. Yiwu Small Commodity City has planned to set up a collection center in Mexico.

Model output: AliExpress recently followed up and launched the "5-day delivery" service in Brazil, and cross-border e-commerce has entered the "time efficiency + price" dual-dimensional competition stage.

Capital attention has increased: Emerging market funds have begun to hold a large number of cross-border e-commerce concept stocks, and the financing amount of related companies in Q1 2024 increased by 210% year-on-year.

Outlook: Shopee US Official Website's success in Latin America depends on the balance between localized operation capabilities and continuous hematopoietic function. If we can achieve an average of one million orders per day in the Brazilian market by 2024, it may rewrite the Latin American e-commerce landscape. However, we need to be wary of the possible changes brought about by geopolitical risks (such as Mexico's increased trade scrutiny of China).

Start a new dialogue