As well as the pandemic, the Latin American retail industry has had to cope with economic, social and political upheaval in a number of countries in recent years. However, the three biggest markets were all recording positive value growth in 2023, with this expected to continue for Mexico, Brazil and Argentina in the coming years as well. While e-commerce will continue to be a dynamic channel, direct selling is also performing relatively well in much of the region.
This report comes in PPT.
Sales continued to rise in the Mexican retail market, as the Consumer Confidence Index reached its highest level since it was created in 2001 and Mexico was found to be among the few countries where real wage growth was experienced in 2023. Players, such as convenience store chain OXXO, also continue to expand their network of physical outlets, despite the growth of the e-commerce channel.
The economic problems in Argentina have seen a number of players leave the country, including Louis Vuitton closing its store in Buenos Aires, Casino selling its business in Argentina, e-commerce apparel and footwear player Dafiti announcing its departure and Shopee.com’s foray into the Argentinian market lasting a mere nine months.
E-commerce sales, given further impetus by the pandemic, continue to grow across the region. However, online sales are not as well developed in Latin America as in some other regions. In addition, direct selling remains an important channel in Latin America, with Mexico and Brazil ranking as the fourth and fifth biggest direct selling country markets globally.
While better times lie ahead for Chilean retail as inflation comes under control, 2023 was a difficult year as elevated inflation and steady price rises continued to impact the retail industry, leading to a steep drop in demand from consumers, who looked to postpone purchases as much as possible or switched to the second-hand, refurbished or informal markets.
Retail is the sale of new and used goods to consumers from a business for personal or household consumption from retail outlets, kiosks, market stalls, vending, direct selling and e-commerce. Retail is the aggregation of Retail Offline and Retail E-Commerce. Excludes specialist retailers of motor vehicles, motorcycles, vehicle parts. Also excludes fuel sales, foodservice sales, rental transactions, and wholesale sales (e.g. Cash and Carry). Sales value excluding or including VAT/Sales Tax. Retail also excludes the informal retail sector. Informal retailing is retail trade which is not declared to the tax authorities. Informal retailing encompasses (a) sales generated by unregistered and unlicensed retailers, i.e. retailers operating illegally, and (b) any proportion of sales generated by a registered and licensed retailer that is not declared to the tax authorities. Unregistered and unlicensed retailers operate predominantly (although not exclusively) as street hawkers or operate open market stalls, as these channels are harder for the authorities to monitor than permanent outlets. Activities in the illegal market, which is usually understood to refer to trade in illegal, counterfeit or stolen merchandise, are included within our definition of informal retailing. Activities in the “grey market”, which is usually understood to refer to trade in legal merchandise that is sold through unauthorized channels – for example cigarettes bought legally in another country, legally imported, but sold at lower prices than in authorized channels – will be included as informal retailing if no tax is paid on sale by the retailer. However if the retailer pays tax – for example on cigarettes bought legally in another country but sold at a lower price than standard – the sale is included within formal retail.
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