In recent years, the economic and trade exchanges between China and Brazil, the two largest developing countries in the Eastern and Western hemispheres, have become increasingly close. In February 2023, the People's Bank of China announced the signing of a memorandum of cooperation with the Central Bank of Brazil, allowing Chinese and Brazilian enterprises and financial institutions to settle transactions directly in Chinese yuan. On April 12th, Brazilian President Lula embarked on a visit to China, signaling a new era of deepening and broadening cooperation between China and Brazil. The continuous deepening of bilateral relations has also sparked a new trend of Chinese companies "going to Latin America". Latin America generally refers to the region south of the United States, including Mexico, Central America, the Caribbean, and South America, with a total population of 648 million, similar to Southeast Asia. Many Chinese companies that are exploring the Latin American market describe it as "Southeast Asia five years ago" due to its immense potential. According to the World Bank's 2021 data on per capita GDP in Latin America, the region's economies are classified as upper-middle-income. The three largest economies in Latin America are Brazil, Mexico, and Argentina, which are usually the first choice for global companies entering the Latin American market. EqualOcean will take examples from e-commerce, social entertainment, and consumer electronics industries to inventory Chinese companies that have made significant progress in deepening their presence in the Latin American market.
Founded in 2008, SHEIN has undoubtedly become one of the most prominent cross-border e-commerce platforms in recent years. Leveraging China's supply chain capabilities, SHEIN has embraced the trend of diversified and personalized clothing consumption with its flexible production, fast response to small orders, and data-driven approach, positioning itself as an international fast fashion e-commerce brand on par with Zara and H&M. In the latest "Global Unicorn List" released by Hurun in 2023, SHEIN, with a current valuation of CNY 400 billion , ranks fourth, climbing one spot higher than last year.
Latin America is one of SHEIN's main markets and an important part of its global expansion beyond Europe and the Americas. In 2019, SHEIN entered the Latin American market through Mexico and officially expanded into Brazil in the second half of the year. In December 2021, SHEIN's founder, Chris Xu, visited Brazil to explore the local clothing supply chain, meet with top clothing suppliers, and assess the feasibility of producing clothing products in Brazil. Starting from March 2022, SHEIN has been piloting a platform model in Brazil, where merchants can directly open stores on SHEIN and take responsibility for operations and logistics.In April of this year, SHEIN announced that it will invest 750 million Brazilian reais (approximately USD 148.9 million) in Brazil over the next few years and establish a network with thousands of textile manufacturers in the country. This is another major move by SHEIN in the Latin American market in 2023, following the appointment of Marcelo Claure, the former COO of SoftBank, in February. SHEIN stated that by the end of 2026, approximately 85% of its sales in Brazil should come from local manufacturers and sellers.
AliExpress was established in 2010 and is a cross-border e-commerce platform created by Alibaba Group for the international market. It is often referred to as the "international version of Taobao" by many sellers. In terms of its presence and experience in expanding into Latin America, AliExpress, under the Alibaba umbrella, has shown notable performance. In 2013, AliExpress entered Brazil, which was still in the early stages of e-commerce development. As the Latin American e-commerce market matured, AliExpress expanded its presence in the region through various strategies. In 2021, AliExpress launched a portal website to support Brazilian small and medium-sized enterprises in conducting local transactions through their platform. In 2023, AliExpress will focus on developing its overseas warehousing business in Latin America, particularly in the promising market of Brazil, aiming to refocus on this highly potential market.
Since its establishment in Singapore in 2015, Shopee has achieved remarkable performance and topped the charts in Southeast Asia. Its expansion into Latin America has also been accelerating. In 2019, Shopee entered the Brazilian market and became a brand with active user numbers second only to the local e-commerce platform Mercado Libre. In 2021, Shopee successively launched sites in Mexico, Chile, Colombia, and other countries. Although Shopee's aggressive approach in Latin America yielded significant short-term results, the substantial logistics costs of shipping directly from China and Southeast Asia to Brazil made it unsustainable in the long run. In 2022, Shopee announced the closure of its local operations in Chile, Colombia, and Mexico, retaining only cross-border business. It completely exited the Argentine market, making Brazil its last stronghold in Latin America. Shopee's localization process in Brazil has also been commendable. In February 2023, Shopee ranked third in terms of online traffic (mobile + PC) among all e-commerce platforms in Brazil, trailing behind Mercado Libre and Amazon Brazil. It has also continuously improved its marketing and logistics distribution, approaching profitability. According to its financial report, in the fourth quarter of 2021, Shopee's orders in Brazil exceeded CNY 140 million, with a nearly 400% year-on-year growth, and its revenue increased by 326% year-on-year.
Cainiao, the international express delivery service under Alibaba, has chosen to deeply penetrate the local market in Latin America and has formed a cross-border logistics ecosystem through a combination strategy of strong control over core nodes and the establishment of overseas self-built express delivery networks. In 2022, Cainiao partnered with several airlines to open dedicated routes and increase charter flights to Latin America. Currently, Cainiao operates 8 cargo charter flights per week from China to Brazil and has established automated distribution centers, overseas warehouses, and self-pickup lockers in countries such as Brazil, Chile, and Mexico. The local express delivery and distribution network covers the entire territory of Brazil. In November of the same year, Cainiao announced the opening of its Latin American headquarters in São Paulo, Brazil. In 2023, the CEO of Brazil Post, who was part of the Brazilian presidential delegation visiting China, visited Cainiao's headquarters in Hangzhou and signed a strategic cooperation agreement, focusing on optimizing international express delivery products between China and Brazil. In March of the same year, Cainiao's end-to-end delivery business in Brazil grew by over 70% compared to the previous year. Currently, Cainiao is rapidly expanding its network globally and replicating the "Brazil Model" in more countries and markets.
J&T Express is a global integrated logistics service provider, founded in 2015. Its express delivery network covers 13 countries, including Indonesia, Vietnam, Malaysia, Philippines, Thailand, Cambodia, Singapore, China, Saudi Arabia, United Arab Emirates, Mexico, Brazil, and Egypt. On February 24, 2022, J&T officially announced the launch of its express delivery network in Mexico, entering the Latin American market and further expanding its global presence. Three months later, J&T also established its presence in Brazil. With the expansion into the Brazilian market, J&T has successfully established a foothold in the two largest economies in Latin America and expanded its global operational network to 13 countries in Asia and Latin America.
Yunquna is the first Chinese company in the field of international logistics digitization to complete Series D funding and achieve a unicorn valuation. In its nearly 8 years of establishment, it has successfully raised a total of over 300 million in funding through 7 rounds, with the Series D1 funding of300million in funding through 7 rounds,with the Series D1 funding of150 million being the highest single-round funding amount in the field of international logistics digitization for a Chinese company. Through stable partnerships with over 100 shipping companies and 2000+ high-quality suppliers, Yunquna has accumulated premium first-mile and last-mile sea and air transportation resources, as well as warehousing and distribution resources in North America, Latin America, Europe, Southeast Asia, and other regions. With years of deep cultivation in Latin America, Yunquna covers over 98% of the top Latin American routes, providing industry-leading comprehensive logistics solutions to meet customers' complex transportation needs.
Huawei's business expansion in the Latin American region has a long history. Huawei entered the Latin American market through Brazil in 1998. In 2012, Huawei's total revenue in Brazil reached $2 billion, accounting for nearly two-thirds of Huawei's market share in the entire Latin American market. Since then, Huawei has established smartphone production factories and multiple distribution centers in Brazil, and launched its first smartphone in Brazil in 2014. By 2022, Huawei has maintained good partnerships with over 500 local companies, creating more than 16,000 job opportunities in Brazil. Huawei's network equipment covers 50% of the local communication network and 40% of the core network. In 2023, Huawei will also establish new data centers in Mexico and Chile, making cloud services and online payments more accessible and convenient in the Latin American region. Currently, Huawei Cloud operates in three core regions (Chile, Brazil, and Mexico), with two country regions (Argentina and Peru), totaling eight availability zones (AZs). Huawei Cloud is the cloud service provider with the most nodes in Latin America, providing stable, efficient, and low-latency cloud services for customers in the region.
In 2015, Xiaomi made its first attempt to enter the Latin American market but had to withdraw due to high import taxes. It wasn't until 2019 that Xiaomi re-entered the market. In June 2019, Xiaomi opened its first physical store in São Paulo, Brazil. Since then, Xiaomi has accelerated its expansion in Latin America, selling products through online stores and offline "Mi Stores" in markets such as Brazil, Mexico, Colombia, Chile, and Uruguay. In April 2019, Xiaomi opened its first Mi Store in Santiago, the capital of Chile, and became the fastest-growing smartphone brand in Chile for a period of time. According to Counterpoint's data for the first quarter of 2023, Xiaomi holds a market share of 12.1% in the Latin American smartphone market, ranking third. Xiaomi has also launched high-end models in the Latin American market and is moving towards a more high-end direction. Currently, Xiaomi ranks among the top five in terms of market share in major markets such as Brazil and Colombia, and also has a stable market share in the Chilean market.
OPPO has been expanding since entering the Latin American market in 2020, signing strategic partnership agreements with two of Mexico's largest carriers, Telcel and AT&T, adopting an aggressive promotional strategy, and signing up local celebrities as spokespeople.In the third quarter of 2021, OPPO has become the fourth-largest handset vendor in Mexico, with a 12 percent market share and dozens of times year-on-year growth in shipments. Counterpoint data shows that OPPO's smartphone market share in Latin America continued to grow in the first quarter of 2023, with 88% year-on-year volume growth, the highest increase among leading brands in the region. OPPO has now consolidated its position as one of the top three in Mexico in terms of market share and will also increase its share of the premium market by launching the Find N2 Flip in the region.
Social and gaming apps
Looking at the data published so far, Mexico has become one of the largest markets for TikTok users in Latin America. data from Slideshare shows that TikTok currently has over 57.5 million active users in Mexico, and was the most downloaded app in 2022, adding nearly 11 million new users, with a growth rate of more than 25%, and has quickly become, in a very short period of time, one of the one of the most popular apps among Mexicans, especially younger users. eMarketer predicts that TikTok is on track to be the only social platform to break double-digit percentage growth this year, when it will have 17.2 million new users, bringing its total number of users in Latin America to 162.5 million. tikTok has also had an eye on the Brazilian market for some time, and local TikTok has also been interested in the Brazilian market for a long time, and the number of local users has been growing steadily, and is about to enter the Brazilian e-commerce sector.
Kwai, the international version of Racer, has gained a large number of fans since its official entry into the Brazilian market in 2019, at one point surpassing old rival Tiktok to become the most downloaded short video platform in Brazil. According to ComScore, Kwai, the international version of Shutterstock, has an average of 45.4 million monthly active users, and has a high penetration rate among users over 20 years old. After its success in Brazil, Kwai is accelerating its expansion into other countries in Latin America. in October 2021, the internationalization division of Qunjian launched the "Trinity" product cooperation initiative, officially merging Kwai Middle East, Kwai Latin America, and Southeast Asia Snack Video into Kwai, and merging Kwai International with Kwai. Video in Kwai Middle East, Kwai Latin America and Snack in Southeast Asia were officially merged into Kwai, realizing the integration of resources. Kwai will also take Brazil as its first overseas market to open live e-commerce, and at the end of October 2021, Kwai started to try live e-commerce with Casas Bahia, a local retailer in Brazil, and Kwai went live with "Kwai for Business" in Brazil. In January of this year, SHOPLINE and Kwai for Business entered into a partnership.
Tencent officially entered the Brazilian gaming market in 2022, bolstering its presence in the country by forming a local team and tapping the head of Americas market development from gaming company Garena. Tencent's Free Fire has been a huge success in the Brazilian market, becoming a local hit. The Brazilian gaming market has huge potential and is expected to maintain good growth momentum in the coming years. On March 8 this year, Honor of Kings (HoK), the international service of Honor of Kings developed by Tianmei Studio and published by Tencent (Level Infinite), officially landed in the Brazilian handheld game market. By the time the game was officially launched on that day, the number of pre-registered players in Brazil had already exceeded 2 million, and the game topped the local free-to-play charts and took the top 12 bestsellers shortly after its launch.Brazil is one of the largest gaming markets in the Latin American region, and Tencent Games is expected to further expand its influence in the Brazilian and Latin American markets as a whole by strengthening its localized operations and launching new products.