Brazilian retailers asked the government to restrict cross-border e-commerce platforms

A group of Brazilian retailers presented a complaint against cross-border-commerce platforms to Minister of Economy Paulo Guedes and President Jair Bolsonaro, according to the Brazilian Report.

Some companies even accused cross-border platforms, including Shopee, AliExpress, Wish, and Mercado Livre, of carrying out “digital smuggling” because they sell products from China.

The retailer group claims that cross-border sales constitute unfair competition as platforms can bypass regular import taxes and sell products that do not necessarily respect Brazilian quality control standards.

According to Nieslen, online sales in Brazil will increase by 27% in 2021. The populous Latin American country is counted among AliExpress’ top global 5 markets, according to a Beyond Borders 2020 report. 

Meanwhile, Shopee, which entered Brazil in 2019, accounted for 5% of the country’s e-commerce. The company, owned by Singapore-headquartered Sea, sees Brazil as one of its most important markets outside Southeast Asia. In announcing 2021 financial results, its CEO Forest Lee said that orders in Brazil reached 140 million in October-December, up 400% year-on-year; revenue was $70 million, an increase of 326% from the same period last year.

Data from analytics app App Annie shows that Shopee is also gaining traction in other Latin American countries, as it is ranked first in the mobile shopping app in terms of downloads in Mexico, Chile, and Colombia as of January 11.

According to BTG Pactual, it is estimated that in Brazil, at least 1.8 million users access the Shein app every month, and in 2021, the fast-fashion brand has earned BRL 2 billion in the country.

Following pressure from retailers, Brazil’s Internal Revenue Service is working on a provisional measure to tax products sold by those platforms.

Cover image by Lucas Santos on Unsplash