Key challenges and purchase patterns shifting apparel in Latin America

This month’s Fashion Friday podcast series by Euromonitor International explores key challenges and consumer preferences within the apparel industry in Latin America. Apparel has been in a difficult situation in the South Cone over the last three years. The industry is facing chronic and structural imbalances such as persistent overstocking resulting in a price war. Social unrest in countries like Chile and Colombia marked by lootings and shorter opening hours, a major economic crisis in Argentina and a growing informal market, including counterfeit products, are impacting performance across the region.

Retail channel preferences are changing among consumers, and there are a growing number of solutions that make shopping easier. While department stores and apparel retailers have lost ground, e-commerce has more than doubled its share of retailing sales in general. According to Euromonitor, apparel online sales have gone from representing approximately 3 percent of total e-commerce sales in 2010 to 10 percent in 2019 in Latin America, where online catalogues of department stores and e-commerce retailers have been the main drivers.

Delivery innovations have become a new alternative in response to consumer demand. Apparel is becoming more present on delivery apps like Cornershop. Childrenswear specialists have been the early adopters of last-mile solutions within apparel retailing since sizes are more standard among kids. Rappi, another last mile delivery app and H&M Chile, announced a partnership at the end of 2019 to make the apparel company products available to consumers in certain areas of the Metropolitan Region.

COVID-19 has created several challenges, which the fashion industry will be strongly impacted by partly due to its discretionary nature. Disruptions from stock and value chains may result in a reduced offer. Most consumers may continue shopping online, though e-commerce in Latin America has limited capacity, shown saturation and experienced difficulties with logistics during the pandemic.

Written and created for FashionUnited by Euromonitor. Euromonitor International is the world's leading independent provider of strategic market research.

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