Economy
Buy now, pay later: China's e-commerce invasion of Latin America
Chinese e-retailers are luring Latin American consumers to a business model that undermines the environment and ravages the consumers' domestic industries.
By AFP |
SANTIAGO -- Isidora Olave opens a package containing a T-shirt, a skirt and a handful of glitter stickers shipped to her front door in Santiago, Chile, almost 20,000km from China.
Like many of her peers, the 20-year-old dentistry student says she no longer has use for malls.
Instead, she shops cheaply and conveniently for "ultra-fast fashion" on Chinese platforms such as Shein, Temu and AliExpress, which offer everything from household products to stationery.
"I bought it from Shein because I needed it for a specific occasion and it was cheaper than buying it here in Chile," Olave told AFP in Santiago of her latest online acquisition.
She paid $15 for the order, shipping included -- about half of what the same items would have cost at a local shop.
According to data platform Statista, Latin Americans spent some $122 billion on online purchases in 2022, a figure expected to rise to $200 billion by 2026.
It is a fast-growing consumer trend with a massive carbon footprint and disconcerting consequences for domestic industry.
The United Nations (UN) says the fashion industry generates about 10% of planet-warming carbon emissions each year -- more than all international flights and maritime shipping combined.
A 2023 report of the US-China Economic and Security Review Commission, a US government agency, said, "Shein and other fast fashion platforms are exacerbating this trend."
Every year, some 85% of all textiles sold globally end up in landfills or dumps, says the UN.
Most end up in developing countries such as Chile, whose Atacama desert features growing mountains of discarded clothing.
'A major challenge'
Latin America, once solidly within the sphere of influence of the United States, is a particular target for China's commercial expansion.
Beijing's Belt and Road Initiative has invested heavily in energy and infrastructure in the region as China also expands its diplomatic and cultural presence.
In a bid to shield domestic industry from the Chinese commercial onslaught, Chile and Brazil have eliminated tax exemptions for individual customers on foreign purchases below $41 and $50, respectively.
Mexico is mulling stronger controls, but analysts are not convinced the tide can be stopped.
Companies like Shein and Temu rely on a recipe of low product prices, ads targeting a captive social media audience and advantageous pricing agreements with shipping companies.
Their sales were bolstered by the COVID-19 pandemic that relegated millions of workers and students to shopping from home.
At Santiago airport's customs checkpoint, the result is plain to see. In 2023, it handled 20 million incoming packages. In 2024, the number is predicted to close out at about 30 million.
The number of parcels received grew by about 1,000% in five years, said Santiago customs chief Maria Jose Rodriguez.
Checking packages for potential contraband "has been a major challenge operationally," she told AFP.
Last month, the European Union announced a probe into concerns Temu is doing too little to stop the sale of illegal products.
And in 2023, US lawmakers sought reassurances from Shein, Temu and other brands over claims their products are made using forced labor.
Addiction risk
Mental health observers warn about the potential psychological risks associated with shopping addiction in a world where marketing has become increasingly intrusive.
"At night, instead of watching a series, many people spend time swiping on their [mobile] screens, browsing," Uruguayan marketing psychologist Veronica Massonier told AFP.
Young consumers, faced with the added phenomenon of peer pressure, are likeliest to fall victim to impulse buying, she added.