Latin American e-commerce platform Linio officially exits the Mexican market

In the fiercely competitive Mexican e-commerce market, some people have tasted the joy of victory, while others have left with a sense of melancholy.

At the beginning of this month (December 1st), Latin American e-commerce giant Linio announced the official closure of its Mexico site. In the announcement sent by the platform to sellers, it was stated that due to a reassessment of the Mexican market operation, the platform has decided to temporarily close its international market business in Mexico. However, websites in Chile and Peru will continue to operate normally.

In fact, Linio is commonly referred to as Falabella. As a local e-commerce platform founded in Mexico, Linio covers a total of over 300 million customers and its business covers countries such as Mexico, Colombia, Peru, and Chile. It provides over 4 million products online, including electronic products, mobile phones, fashion, household appliances, sports goods, toys, and other categories.

Linio officially exits the Mexican market

In 2018, Falabella acquired Linio for $138 million, giving rise to Linio as a B2C cross-border e-commerce platform under Falabella. Subsequently, in November 2022, Falabella migrated its Linio Chile site to the Falabella platform

On the contrary, the Colombian site of the Linio platform continues to coexist with the Falabella dual platform, while Mexico remains a site that the Linio platform has been deeply cultivating for a long time, and is also the only site that continues to operate under the Linio domain name

According to the general development path, Mexico is the “birthplace” of Linio, and behind Linio, there is also Falabella, a “big financier”. The platform should be more adept at conducting business in Mexico. But the fact is, Linio’s life in his hometown of Mexico was indeed not very easy.

Cruel market competition

In recent years, traditional e-commerce markets such as Europe and America have been booming, and the entry barriers for platforms and sellers have also been raised. In order to gain more development opportunities, the Latin American e-commerce market is becoming a “new blue ocean” for cross-border trade.
Among them, Mexico is a crucial market that cannot be ignored. According to the 2023 Global E-commerce Market Growth Rate Ranking released by market research firm Insider Intelligence, Mexico’s e-commerce growth rate this year will reach 16.2%, far exceeding the world average and ranking fifth among countries worldwide.

The huge development opportunities are attracting a group of e-commerce giants to layout here. For example, Meike, a local e-commerce company in Latin America, continues to invest in the Mexican market, and Amazon, Wal Mart, Shopee and other e-commerce giants also frequently make efforts. In addition to traditional e-commerce giants increasing their presence here, newcomers Temu and SHEIN are also constantly expanding their business.

The strong influx of numerous e-commerce platforms has made the competition in the Mexican e-commerce market increasingly fierce. For Linio, the survival pressure on the platform is even greater. In the previously released ranking of the most popular e-commerce in Mexico, it can be seen that Linio is not present in the top 8 of the list.

In addition to facing external competitive pressure, Linio’s own operating costs in the Mexican market are relatively high, such as inventory, logistics, labor and other expenses, which makes it difficult for the platform to achieve profitability. Therefore, closing the Mexican site and shifting the focus to other markets would be the optimal solution.

After Linio closes its Mexico site, some of the platform’s traffic will flow to other e-commerce giants, which will inevitably have an impact on the local e-commerce market environment. For sellers, this is also a revelation. Everyone also needs to diversify their business and remember not to put eggs in one basket.

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