by LU Keyan

Latin America's largest e-commerce platform Mercado Libre is intensifying efforts to attract Chinese sellers as competition grows in one of the world's fastest-growing online retail markets, where penetration remains low and global platforms are moving in.

At a Shenzhen event on April 21, senior executives from the Argentina-based company outlined new incentives for Chinese merchants, highlighting the rising importance of cross-border supply from China.

With gross merchandise value reaching $65 billion in 2025 and more than 120 million unique buyers, Mercado Libre has become a dominant regional platform — and a key gateway for Chinese sellers entering Latin America.

Strong interest was evident at the venue, where logistics, tax and compliance providers crowded the entrance, competing for access to Chinese merchants.

Latin America's e-commerce market has grown more than 20% annually since 2019, according to the Inter-American Development Bank, with forecasts pointing to $215.3 billion by 2026 — about 1.5 times the global growth rate.

As tariff barriers rise in Western markets and growth slows in Southeast Asia, Chinese exporters are increasingly shifting toward Latin America, where online retail remains underpenetrated and competition is still fragmented.

Fernando Yunes, executive vice president of Mercado Libre's marketplace and Brazil country head, told Jiemian News that regional penetration stands at about 14%, compared with over 32% in China, more than 27% in the United States, and a global average of 23%.

The region remains uneven. Brazil, the largest market, is weighed down by complex tax rules and lengthy customs procedures, while Mexico is the most mature for cross-border trade. Smaller markets such as Chile and Colombia are growing faster but require localized operations.

Demand for Chinese goods is strong across the region, from toys and baby products to home goods, auto parts and beauty items. Yunes said China's edge lies in combining low-cost manufacturing with rapid product iteration — capabilities still limited in local supply chains.

Logistics remain a key constraint. Shipping from China typically takes 10–20 days by sea, while air freight is costly, making it harder for sellers to move beyond price competition and build pricing power.

To address this, Mercado Libre has expanded its seller support model. According to German Spataro, senior vice president of marketplace operations, the platform initially offered only overseas warehousing (FBM) and direct shipping from China (IDS). It has since introduced semi-managed and fully managed services to help manufacturers without e-commerce expertise reach consumers directly.

The shift reflects a broader strategy to lower operational barriers and broaden its seller base beyond traditional cross-border merchants.

Karen Bruck, vice president of cross-border business, said seller onboarding has "exceeded expectations," with the merchant base growing 65% year on year in recent quarters.

Competition is accelerating as Asian platforms move in. Shopee entered Brazil in 2019 and doubled sales in 2024. Temu launched in Mexico in May 2023 and quickly became one of the most downloaded shopping apps. TikTok Shop followed in February 2025, generating about $6.64 million in sales within its first week, with beauty, electronics and fast fashion accounting for more than 60%.

The arrival of major platforms has helped build infrastructure and consumer awareness, lowering barriers for smaller Chinese sellers.

Yunes said the growing competition is expanding the overall market. As more consumers shift online, Mercado Libre expects to benefit from its stronger logistics and payments network.

The company plans to invest nearly $15 billion in Latin America this year, a record level, with a focus on Mexico and Argentina. Rivals including Temu and TikTok Shop are also stepping up investment, intensifying competition for market share in a region with 600 million people and still-low e-commerce penetration.