While the tiger economies of Asia (most notably Indonesia, the Philippines, and China) continue to drive global ecommerce, South America’s markets are also predicted to grow by 21.3% to $71.34 billion by the end of 2019. The size and economic diversity of the region are compelling enough reasons for brands to take it seriously, but if the long-awaited trade deal between the EU and Mercosur does finally get approved after its 20-year negotiation then increased trade may aid additional growth. For businesses who wish to develop their presence in these markets, and who also need to protect their own brand identity and IP rights from being stolen in potentially lucrative markets, it has become particularly important to have a developed understanding of the most popular ecommerce marketplaces.
In terms of specific markets, Brazil’s 59 million online shoppers have recently pushed that country into the top 10 largest ecommerce markets in the world (the only South American country to do so), and the combined forces of Brazil and Mexico constitute over half of the South American share in ecommerce. Argentina is home to the most popular online platform for all South American shoppers and has been growing its own ecommerce market at a rate of 20%. Colombia is also experiencing similarly sharp growth.
Despite the sense of possibility, the various countries within South America are disparate in terms of politics and cultures, meaning that instability is common. Brands should remain very aware of economic and administrative changes which can dramatically alter the registration and enforcement of IP. However, while relying on law enforcement agencies to investigate and make seizures can be variable, taking one’s own enforcement action against online marketplaces can sometimes be a more reliable way for brands to police counterfeits.
Although global platforms including Alibaba and Aliexpress are commonly used in Latin America, the region does differ from many others due to a clear loyalty to local marketplaces. In light of the reported market growth, and a general preference for local marketplaces, we’ve analyzed the top three most popular South American ecommerce platforms for brands to be mindful of when planning brand protection strategy.
1 – MercadoLibre
Argentina’s Mercado Libre is South America’s number one shopping platform. It has 160 million users per month and surpasses both eBay and Amazon’s South and Central American domains by nearly three times the amount of visitors. Although the site began in Argentina is now has its own popular domains in 18 domestic markets across the continent. Heavily criticized by brands for the easy availability of counterfeits, this is a marketplace based on an eBay style mixture of new and used goods. It is one of the widest ranging marketplaces, with product categories that range from cars to apartments. For brands who need to monitor their presence in South America it’s a must.
2 – B2W Digital
Founded in 2006, B2W Digital is the holding company for two major ecommerce platforms in South America. The company is the result of a merger between Americanas.com and Submarino.com, two leading marketplaces operating in Rio de Janeiro and targeting Brazilian consumers. While Americanas.com boasts 45 million active monthly users and offers a broad range of products, Submarino.com focuses more on electronics and accessories. However, both platforms are key etailers in Brazil, a country where counterfeits are widely traded (some studies have suggested that as many as 74% of Brazilians have purchased a counterfeit within the last 12 months). All brands should be aware of their potential threat there.
3 – Linio
Although it’s primarily a Mexican marketplace, Linio also has users in Argentina, Chile, Columbia, Ecuador, Panama, Peru, and Venezuela; reaching a total of 300 million consumers and hosting 20 million active monthly users. It’s a platform which is especially popular with young males and which should be watched by electronics and fashion brands in particular.
One of Linio’s key differentiating features is how they incentivize sellers through variable commision rates on particular products. By not having a flat fee that sellers have to pay on all goods they prioritize certain areas. This can be attractive for counterfeiters looking to take advantage of emerging product categories and brands should be aware of how the commision rates alter over time.
Though these may be the top three most popular marketplaces in South America, they aren’t the only ones in operation. Larger companies such as Cnova and OLX, which host targeted marketplaces that are country or category specific, also contain infringing or counterfeit products that damage brand reputation, consumer trust, and profits.
If your brand is in high demand in the Americas, it may be time to look into an effective brand protection strategy. By proactively defending your business in a market gaining momentum, you’re ultimately averting future concerns and ensuring your brand is safe before it’s too late. For more detail on how Pointer can help you defend your brand and your business, contact us today and start the conversation.