Latin America on alert over the rise of low-cost Chinese online sites

A t-shirt, a skirt and stickers: Isidora Olave, a 20-year-old Chilean, has just received her latest package from China… at a ridiculous price. The meteoric growth of platforms like Shein and Temu is also worrying in Latin America.

A student and active on social networks, the young woman is a fan, like her friends, of “ultra fast fashion”, this fashion often described as disposable, with ultra-competitive prices and the incessant renewal of collections.

“I bought on Shein because I needed an outfit for a specific occasion and it was cheaper than buying it in Chile,” explains the dentistry student, opening her latest package from from China.

Inside, a T-shirt, a skirt and glitter stickers, all for $15, about half what she would have paid in the store, she assures, as she unpacks her things in the her parents’ apartment, on the outskirts of the capital Santiago, where she lives.

E-commerce generated $122 billion in Latin America in 2022 and could reach $200 billion by 2026, according to market analysis firm Statista.

On the front line facing the meteoric growth of platforms like Shein, Temu or AliExpress, which sell all types of products, Chilean customs say they process more than 80,000 packages every day. In 2023, they managed 20 million, and for 2024 they plan to reach 30 million. Over the past five years, parcel receipt has increased by approximately 1,000%.

“It has been a major challenge to process (…) this significant influx of packages,” observes Maria José Rodriguez, head of the taxation department of Santiago Metropolitan Customs.

Platforms of Chinese origin are at the origin of this spectacular growth in a region where the influence of the Asian giant continues to expand to the detriment of the United States, once predominant.

In a further demonstration of its presence in the region, China plans to inaugurate the megaport of Chancay, Peru, on Thursday, on the sidelines of the Asia-Pacific Economic Cooperation (Apec) summit being held this week in Lima.

– “Acts of justice” –

To protect local commerce, and also increase their revenues, Chile and Brazil recently removed tax exemptions on low-cost purchases (41 and 50 dollars respectively) made on this type of platforms. “This is an act of justice for Chile,” welcomed Chilean President Gabriel Boric.

Mexico, for its part, announced its intention to strengthen controls on this type of trade.

However, experts believe that these measures will probably not have a significant impact on this new form of consumption.

“It is above all a question of opportunity, between an extremely cheap offer and consumers who have stopped seeing clothes as sustainable products,” explains Sofia Calvo, Chilean journalist and consultant in ethical fashion.

Elsewhere too, particularly in the European Union and the United States, the growth of these sites is worrying.

The fashion industry is responsible for more than 8% of global greenhouse gas emissions and 20% of the planet’s wastewater, according to the UN and despite their potential for reuse, 85% of clothes end up in illegal dumps such as that in the Atacama Desert in Chile.

In a society where image and appearance take precedence, under the influence of social networks, the potentially addictive nature, particularly among the youngest, also raises concerns.

“In the evening, instead of watching a series, many people are in front of a screen to browse, stroll, watch… to buy or not to buy,” describes Veronica Massonier, a graduate in psychology and Uruguayan expert in markets and trends.

More than a purchase out of necessity, consumers are motivated by “the pleasure of novelty and renewal”, she adds, emphasizing the “very ephemeral” nature of the satisfaction obtained.

In the meantime, Shein continues to strengthen its presence in Latin America. Its president for the region, Marcelo Claure, welcomed last year the upcoming installation of “2,000 factories” in Brazil. The country “will become an export hub for manufacturing and distributing products in Latin America,” he said in an interview with the 360 ​​information portal.

Santiago du Chili, 13 nov 2024 (AFP)
Pair Paulina ABRAMOVICH