Increasing Chinese e-commerce volumes threaten Latin America’s “fragile retail economy”, with one analyst claiming the region was having a “stick-or-twist” moment.
Dr Walter Kemmsies, shipping advisor for The Kemmsies Group, said the likes of Shein and Temu were tapping into demand from a growing global middle-class unable to keep up with the expense of European and North American retailers, online or otherwise.
“That group, outside of Europe and North America, is on a much lower income and the cheap goods from Chinese retailers cater to this,” he told The Loadstar.
“These retailers are known for low-quality, but when it comes to women’s wear, this is not always the case – it is good quality and, importantly, it can be produced at a scale and speed to meet market trends.”
While meeting demand, Dr Kemmsies warned that Latin American countries allowing these flows threatened to “eat themselves”.
This, he said, was because Latin America was seeing growth in its retail sector, but it was “fragile”, and could find itself being undermined by its consumer base buying goods from overseas at a time when it wanted to be buying domestic.
“Given the quality of goods coming from China, I think it will be very hard to stop, because you have a growing Latin American middle class that wants this stuff,” he continued.
“China has huge factory floors, it can produce at scale and speed. It is harvesting a lot of data from TikTok on the fashion trends and then making these items and having them shipped out in two weeks, rather than the typical seven-to-nine-month timeframes.
“But the governments in these countries need to be thinking very carefully, because the reason for their growing middle classes is an increase in retail jobs.”