Quiet Luxury Makes Strides: The Week in Retail

Quiet luxury brands continue to surpass their more ostentatious counterparts this reporting season. Meanwhile, retail construction in Mexico lags behind despite increasing interest following the COVID-19 pandemic. Additionally, following the COFECE monopoly probe, CONCANACO-SERVYTUR has expressed willingness to collaborate with Amazon and Mercado Libre to promote best practices in e-commerce.

More updates this week in retail!

Quiet Luxury Brands Gain Investor, Consumer Notice Over Loud Ones

Quiet luxury has outpaced louder counterparts, rising by 23% in 2023. Kering Group reported a 4% decrease in revenue in Q4 2023, citing exchange rates and distribution changes, while LVMH boasted €86.2 billion revenue. As luxury spending patterns shift, emerging markets like India are gaining prominence, influencing brands' global strategies.

Tenant Confidence Rises, But Retail Construction in Mexico Lags

Despite increased consumer confidence, new retail construction in Mexico remains slow due to the lingering effects of COVID-19, with only 250,000 m2 delivered in 2023, a fraction of the country's mall inventory. Developers struggle to secure suitable locations, driving rental prices up by 30% annually in some Mexico City malls. FibraShop's CFO, Gabriel Ramírez, anticipates a potential construction revival in 2024 if interest rates decrease, noting increased mall attendance and an MX$300 million investment plan to expand existing properties near industrial hubs.

CONCANACO-SERVYTUR to Collaborate with Amazon, Mercado Libre

CONCANACO-SERVYTUR expressed readiness to collaborate with Amazon and Mercado Libre to foster e-commerce best practices in Mexico, aiming to uphold consumer rights and encourage diversity and innovation online. COFECE's preliminary probe targets Amazon and Mercado Libre, alleging an 85% market monopoly, identifying barriers to entry, including network effects and investment demands. 

Mercado Libre Reports Record Revenue of US$4.2 Billion in 4Q23

Mercado Libre reported record revenue of US$4.2 billion for 4Q23, attributing its success to tech-driven enhancements in user experience, with significant growth seen in Brazil (46% YoY) and Mexico (51% YoY) across Commerce and Fintech segments. The company implemented AI-powered initiatives to improve customer experience, such as advanced filters for navigation, summarizing reviews, and push notifications for abandoned items.

Mexico's Cross-Border E-commerce Revenue to Grow 5.9% by 2025

Cross-border e-commerce revenue in Mexico is projected to reach 5.9% of the market by 2025, driven by the revolutionized payment landscape in Latin America, with alternative methods like Pix in Brazil and PSE in Colombia accounting for over 40% of e-commerce volume. Mexicans display a 78% higher inclination toward online purchases, prompting a growing interest in exporting goods and extending global reach.