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Cross-border E-commerce in Latin America
As the Black Friday and Christmas of 2022 approaches, the Latin American cross-border e-commerce market enters its peak sales season. However, many sellers in the region are grappling with significant logistics congestion, particularly due to a shortage of overseas warehouses in Latin America. Is the Latin American cross-border e-commerce market too hot to handle? Or are there hidden logistical pitfalls that need to be addressed? Let's hear directly from our customers and gain valuable insights into their experiences.
A Shift of Focus Market:
From North America to Latin America
The client, a foreign trade enterprise specializing in lighting equipment, is headquartered in Zhongshan, China. In 2016, they took their first step into the North American market by launching their inaugural store on Amazon. However, recognizing the fierce competition in this market, they strategically shifted their competitively priced products and a robust cross-border e-commerce service system, they achieved remarkable success, securing a position among the top three in vertical category sellers on both Amazon (Latin America) and Mercado Libre.
As one of YQN's long-term service clients, we have devised a full-chain international logistics solution for them. This solution has enabled us to ensure seamless and efficient logistics transportation, leading to stable profitability and effective avoidance of potential logistics risks in emerging markets. With our reliable logistics services, we have been instrumental in supporting their remarkable growth and expansion in these markets over the past three years.
Build a Strong Foundation: Enhance Logistics Capacity
The data clearly highlights the immense development potential of the Latin American market. In 2020, the region witnessed an astonishing growth rates of 63.3% in e-commerce, exceeding expectations by a remarkable five times and becoming one of the fastest-growing e-commerce regions globally. Continuing this upward trajectory, Latin American e-commerce maintained a growth rate of 40% in 2021, establishing itself as a blue ocean in the global e-commerce market. However, despite this impressive growth, it is crucial to address the existing bottleneck: the need for new infrastructure, particularly in the logistics sector. To achieve rapid development, stable and reliable logistics support is indispensable.
In this regard, we have identified three major factors for choosing YQN logistics services:
1. Abundant logistics resources: YQN has extensive logistics resources to meet different needs.
2. Localized service system: Ensuring stable customs clearance and reasonable taxation in Latin America.
3. Personalized service: Efficiently connecting with overseas warehouses of Latin American e-commerce platforms.
3 Challenges and Solutions to the E-commerce Peak Season in Latin America
As the year-end shopping season approaches, Latin American cross-border e-commerce logistics encounter significant challenges. In order to better understand the impact of these challenges, let's delve into the experience of our lighting equipment client and explore how reliable and professional cross-border logistics can support the growth and prosperity of e-commerce sellers.
First-leg transportation: Tight container availability during the peak season
Each year, sellers strategically plan and coordinate shipments from China during the months of September and October to ensure sufficient inventory for Black Friday sales at the end of November, as well as the bustling Christmas season in December. However, this surge in demand for container space during the peak period often results in a limited availability of containers, causing freight rates to surge as well. Through YQN's long-term accumulation on the route to Latin America and frequent communication between our account managers and clients, we can effectively ensure clients get container space and stable freight rates during the peak season. In October, the customer's goods depart from Shenzhen and arrive in Mexico after a 20-day sea voyage.
Our Advantages:
1. With contracts covering over 98% of major shipping lines on the Latin America route, we guarantee container availability year-round at booking prices better than the industry average.
2. Shipping from 30+ major cities domestically.
3. Stable shipping schedule with weekly fixed routes from various ports to Latin America.
Customs Clearance & Taxes: Avoid Hidden Risks
In the Latin American region, customs clearance poses well-known difficulties especially in countries like Mexico where clearance rates are notably low. This can create significant obstacles for cross-border e-commerce sellers. Unfortunately, some service providers attempt to attract customers by offering quotations significantly lower than the market rate. However, they often resort to tax evasion to compensate for these low prices, ultimately resulting in losses for their unsuspecting customers.
Leveraging YQN's extensive experience in the Latin American market, we diligently monitor local policy changes and timely develop comprehensive customs clearance plans for sellers. This proactive approach ensures that our customers are well-prepared for the peak season and can navigate the customs clearance process smoothly within a few days.
Regarding taxation services, YQN ensures compliance while safeguarding customers' profit margins and helping them avoid the pitfalls of tax evasion.
Our Advantages:
1. YQN has a team in Mexico with an exceptional track record of achieving industry-leading customs clearance rates.
2. Our taxation services are standardized and mature, effectively avoiding violation risks.
3. We provide free NOM certification.
Overseas Warehouses: Struggles with Limited Space After Stock-outs
After goods arrive in Mexico, the ideal scenario is for them to be promptly delivered to the Mercado Libre overseas warehouse. However, due to the limited storage capacity of the platform's self-built warehouses, a significant overflow of goods, ranging from 10% to 20%, occurs each quarter. Consequently, many sellers find themselves in a situation where their goods have to wait for storage in third-party overseas warehouses. This issue even more pronounced during this year's Black Friday period as several third-party warehouses reach their maximum capability, leaving many sellers grappling to secure space for their goods in Latin America.
To ensure the prompt and efficient delivery of our clients’ good, YQN offers two solutions. As soon as the goods are loaded onto a ship, we initiate the process of reserving space in Mercado Libre's self-owned warehouses through an audit appointment. Concurrently, we also secure space in YQN's Mexico overseas warehouse, guaranteeing our clients continuous access to storage facilities. Once the audit is approved, the goods can be seamlessly transferred to the warehouse, facilitating efficient warehousing and distribution throughout the year-end peak season.
Our Advantages:
1. Professional teams for sea freight, warehousing and delivery integration.
2. Seamless coordination for nearby warehousing.
3. Armed escort throughout the entire process, from door to warehouse delivery.
4. B2C services, change/affix shipping labels, ensuring both safety and timeliness.
Shot of YQN Mexico Team Armed Escort
In 2022, YQN proposed the concept of co-building a new digital international logistics ecosystem, which is open to industry partners. This ecosystem grants access to flight resources, localized service resources, and online digital fulfillment resources. This is aimed at customers and partners exploring emerging markets, and leveraging YQN's extensive logistics resources in Latin America, Southeast Asia, Africa, the Middle East, and other regions, we are committed to providing stable and reliable logistics support.
YQN Operation Team
Info@yqnlink.com
