Increasing Chinese e-commerce volumes threaten Latin America’s “fragile retail economy,” with one analyst describing the region as facing a “stick-or-twist” moment.
Dr. Walter Kemmsies, shipping advisor for The Kemmsies Group, noted that companies like Shein and Temu are tapping into the demand from a growing global middle class, which struggles to afford products from European and North American retailers, both online and offline.
“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 these goods meet demand, Dr. Kemmsies warned that Latin American countries allowing these imports risk “eating themselves.”
He explained that although Latin America is experiencing growth in its retail sector, it remains “fragile” and could be undermined by consumers purchasing goods from overseas at a time when local products are preferred.
“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 fashion trends, then making these items and shipping them 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.”
