China’s Online Retail Giants Transform Shopping Habits in Latin America

For Isidora Olave, shopping malls are a thing of the past. This young Chilean shops on Shein, Temu, or AliExpress—the ultra-cheap Chinese online stores whose aggressive competition is pushing Latin America to protect its retail trade.University-aged women, active on social media but above all lovers of “ultra-fast fashion” (very low-priced fast fashion), Olave and her group of friends are part of the global trend of on-demand consumers.

“I bought from Shein because I needed it for a specific occasion and it was cheaper than buying it here in Chile,” says this 20-year-old dentistry student.She has just opened the latest package sent from China: a T-shirt, a skirt, and a set of adhesive glitter. They cost 15 dollars, half of what she would have paid in a local store, she assures.

According to Statista, the specialized data site, in 2022 online commerce moved 122 billion dollars in Latin America and could reach 200 billion in 2026.AliExpress, Shein, and Temu are behind this formidable expansion, confirming China’s weight in the region, historically an area of influence for the United States.

In an additional sign of its advancement, China plans to inaugurate the mega-port of Chancay in Peru during the Asia-Pacific Economic Cooperation (APEC) summit being held this week in Lima.

Pressure on Customs

Driven by the pandemic, the business model of Shein or Temu consists of offering products at very low prices through direct purchases from suppliers and agreements with transport companies. At the Santiago Customs office, the movement is incessant: daily, they inspect—and dispatch—more than 80,000 packages to prevent the smuggling of products and drugs.

While in 2023 they received 20 million shipments, in 2024 they project reaching 30 million. In the last five years, the reception of packages grew by around 1,000%. “It has been a significant challenge to address all the risks and what this substantial influx of shipments implies operationally,” explains María José Rodríguez, head of the Oversight Department of the Metropolitan Customs of Chile.

In an attempt to protect the local industry and increase revenue, Chile and Brazil recently eliminated tax exemptions on foreign purchases below 41 and 50 dollars, respectively. Mexico announced it would strengthen the control of this commercial activity. But experts dismiss that the tariff measures will significantly impact this new rampant form of consumption, which has raised concerns on several fronts.

Ephemeral Pleasure

In October, the European Union announced an investigation into Temu for the alleged sale of illicit products through these platforms. There is also the risk of the addictive potential they entail. “At night, instead of watching a series, many people sit in front of a screen to scroll, wander, look; buy or not buy,” describes Verónica Massonier, a psychologist specializing in market and trends.

Consumers are driven to “enjoy the new and the replacement,” she adds, although she warns that it’s a “very ephemeral” pleasure. Soon after, the purchase becomes irrelevant. Overstimulated by social networks, young people are the most exposed, especially to buying clothes to use and discard.

“It’s purely a matter of opportunity, among a very cheap offer for people who have stopped considering clothes as a durable product,” explains journalist Sofía Calvo, a consultant in fashion sustainability. In May 2023, U.S. congress members requested an investigation into Temu, Shein, and other firms for the exploitation of members of the Muslim Uyghur ethnicity in the Xinjiang region, in western China.

According to the UN, the fashion industry is responsible for more than 8% of greenhouse gas emissions and 20% of the world’s wastewater. And despite its potential for reuse, 85% of clothing ends up burned or in landfills, like the one in the Atacama Desert in northern Chile.

Meanwhile, Shein continues to bolster its presence in Latin America. Its president for the region, Marcelo Claure, assured that the fast-fashion giant wants to “set up 2,000 factories” in Brazil. “Brazil is going to be an export hub to manufacture and deliver the product in Latin America,” he said last year in an interview with the news portal 360.