Asia-Backed E-tailers Encroach on Localized Player Market Share in LatAm

Key Takeaways:

• Temu has expanded rapidly across LatAm, representing 20% of MAU share in the market through 3Q24 QTD, up from merely 4% in 3Q23 per ST data, while Mercado Libre (-4ppts), Shopee (-3ppts), Shein (-2ppts), AliExpress (-2ppts), Americanas (-2ppts), Amazon (-1ppts) and Magalu (-1ppts) all saw YoY declines in MAU share, driven by headwinds from this increasingly competitive environment

  • Per ST data, both Temu (30%) and Shein (25%) boast the highest percentage of downloads from paid sources in LatAm through 3Q24 QTD, vs <20% for Casas Bahia, Americanas, AliExpress, Shopee, Mercado Libre and Amazon. While paid advertising campaigns bode well for driving user acquisition on both Temu and Shein in the short term, maintaining current levels of paid digital ad spend in LatAm while effectively balancing user acquisition and retention strategies in other geographies may be quite difficult

• ST data shows that Mercado Libre and Shopee boast the lowest user churn in LatAm out of the marketplace cohort through 3Q24 QTD at 10% and 8%, respectively. Comparatively, Temu’s user churn in LatAm resided around 37% in the same period, suggesting that Temu users are churning 3x faster than users of Mercado Libre and Shopee, which could be a near term threat for Temu’s top line growth in the region

• The proliferation of e-tailers operating in LatAm coupled with various competing sales events has made it more difficult to hold consumer attention in the region. Per ST data, only Shopee (+6%) and Mercado Libre (+1%) have seen weekly average user time spent increase consecutively on a YoY basis, per quarter, from 1Q24-3Q24 QTD

  • Shopee benefits from its monthly sales events, where it provides consumers with a slew of limited-time deals, which likely contributes to its industry-leading growth in user engagement and low levels of user churn

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