Shopee takes on MercadoLibre in South American e-commerce battle

Online shopping platform Shopee is hoping to replicate its success across Southeast Asia in Latin America as it brings its “gamified” shopping experience to more markets in the region.

Why it matters

E-commerce is growing faster in South America than anywhere else (up 63% in 2020 according to eMarketer) and the returns to Shopee if it succeeds in taking share from market leader MercadoLibre in a $105bn market will be significant. 

Context

• Shopee Brazil, which was limited to overseas merchants when it launched in 2019, now offers low-priced access to local sellers; in 2021 services were launched in Mexico, Chile and Colombia.
• Shopee is the most downloaded e-commerce app in Brazil this year, the Financial Times reports, with more than twice as many as MercadoLibre.
• Users can play simple games in the app and win rewards such as discounts; analysts believe that introducing features common in Southeast Asia, such as livestream selling, could also be very popular.
• But poor logistics are a challenge; In Brazil, for example, Shopee relies on the postal service, while MercadoLibre has built its own logistics network that covers most of its deliveries in that country.

Sourced from Financial Times