Economy

Retail e-commerce begins to decelerate in Latin America

Persistent inflation and consumers’ return to brick-and-mortar stores are holding back the growth of some of the region's biggest e-retailers. Online shopping, however, will never play a supporting role again

e-commerce decelerates latin america
Illustration: Aanbetta/Shutterstock

After two years of growing at breakneck speed, Latin America’s e-commerce sector is experiencing a slowdown, especially in retail — that is, sales of physical and digital goods except for food delivery, subscription-based products, and travel-related services. 

Persistent inflation — despite region-wide monetary tightening — and the return of consumers to brick-and-mortar stores are two of the main factors holding back the expansion of some of the region’s leading retailers. Online shopping, however, will never play a supporting role again, even more so in the age of mobile commerce.

In early August, while reporting a record-breaking net revenue of USD 2.6 billion for Q2 2022, Latin America’s e-commerce behemoth Mercado Libre warned investors about “local and worldwide signs of online retail slowdown due to the normalization of mobility triggering shifts and constraints in consumer spending.” 

The company also said it has absorbed logistics costs pressured by inflation, particularly rising fuel prices. Verticalizing its logistics operations remains one of the company’s priorities, as cheap and efficient freight is crucial to continue growing. 

Big Brazilian retailers, such as Americanas and Magazine Luiza, are following the same path.

“We are coming from two periods of such record,...

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