Latin America’s fashion market in Brazil, Mexico, Colombia, and Argentina is poised to reach a staggering US$120 billion in sales in 2023. While this figure still trails behind pre-pandemic levels, the growth trajectory is undeniable. Brazil emerges as the regional giant with over US$60 billion in sales, followed closely by Mexico, Argentina, and Colombia. Our goal is to present growth opportunities, tales of innovation, sustainability, and transformation in the fashion landscape.
Latin America has long been renowned for its rich focus on textile production. Countries like Brazil and Mexico stand out for their artistic utilization of diverse colors and textures in crafting materials such as yarns, cotton, and denim fabrics. In Brazil, the fashion industry is making a comeback, as you will see in the numbers we share below.
While the fashion industry in these nations is robust, there’s an evolving emphasis on innovation and sustainability to amplify their global presence. Brazilian companies, led by initiatives like ApexBrasil and Texbrasil, are pioneering the integration of recycled and renewable materials, such as PET and Eco Made Lycra yarn, into their fabrics. Argentina is embracing a circular fashion ethos, giving new life to outfits through reselling and redesigning, while Colombia is capitalizing on its favorable geographical location to revitalize its fashion ecosystem.
Latin America’s fashion potential is unfolding on multiple fronts. As Brazil, Mexico, Argentina, and Colombia embrace sustainability, innovation, and streamlined logistics, the stage is set for a grand transformation. These countries are redefining the fashion landscape, one stitch at a time, and propelling the industry towards new heights of success and sustainability.
Below we analyze fashion from a logistics perspective to help you understand this vertical, ranging from the overall LatAm fashion market and key logistics players within it to top manufacturers, road spend and warehousing spend.
Lifestyle and Fashion Sales and Trends in Brazil, Mexico, Colombia and Argentina, 2018-2025
As we review the numbers, it’s clear that Brazil leads the region, unsurprisingly, given its size and large population. In addition, countries like Mexico and Brazil are especially noteworthy for using various colors and textures in creating materials like yarns, cotton, and denim fabrics.
According to the Instituto de Inteligência de Mercado (IEMI), in 2023 in Brazil, more than 6.5 billion apparel pieces will be produced, indicating a complete recovery from the sales downturn during the pandemic (this projected 2023 total of pieces is 3.8% higher than in 2019). Although the fashion industry is robust, comprising all its processes and exporting almost 90% of its production, most of these exports are represented by cotton. Since this is a raw material with no added value, most of the country’s textile exports do not contribute significant weight to the global supply chain. Efforts led by ApexBrasil and Texbrasil to promote innovation focused on sustainability to better position Brazilian companies in international markets are key in 2023. Success cases like EcoSimple and Covolan are developing fabrics with recycled, renewable, and sustainable raw materials — such as PET — and recycled yarns, such as Eco Made Lycra yarn.
In Argentina, its economic scenario and sustainable trends accelerated the adoption of circular fashion. Multiple new companies, such as Búnker, Urban Luxury, and Cocoliche Ropa, are giving a second chance to outfits in good condition, either to use them to design new apparel or to resell old outfits in their stores. Customers can find garments, even luxury ones, between 50% and 70% cheaper than their original prices. Argentina’s relatively closed stance towards the world and its recurrent macroeconomic challenges are the main culprits of its dwindling fashion industry sales.
Mexico’s fashion sector is proliferating thanks to the nearshoring boom with the US. The country is the fifth largest supplier of textile products to the United States (63%), followed by Nicaragua (9%) and Canada (6%). The Mexican textile industry comprises natural and synthetic fibers, yarns, and fabrics. It includes manufacturing clothing, home textiles, and technical textiles, among others, and is linked to other productive industries such as aerospace, medical, automotive, furniture, and footwear. In 2022, Asia represented 65% of Mexican imports of textiles and ready-made products. From Asia, Mexico mainly imports fabrics, woven fabrics, knitted fabrics, plush fabrics, and nonwoven, and in terms of clothing, purchases are concentrated in blouses, pants, sweaters, and T-shirts.
In Colombia, the government’s 2022 decision to increase import tariffs up to 40% for clothing (coming mainly from China and other most favored nations) will change the sales landscape, favoring domestically produced garments and imports from countries like the US and Europe. Although the country does not have the proximity that Mexico has with the US to become a textile hub for nearshoring, it does have an attractive geographical location between the Caribbean and the Pacific that makes it possible to supply foreign demand with competitive delivery times and a solid fashion ecosystem in Antioquia. Below we break down some of the major manufacturers in these markets:
Road Transport and Warehousing Spending and Trends in Brazil, Mexico, Colombia, and Argentina 2018-20253
Logistics in the fashion sector across these four markets share commonalities easily relatable to global post-pandemic trends and the intricate nature of the industry. These encompass faster and greener road transport, tailored packaging, and more efficient warehousing. The continued expansion of domestic and cross-border e-commerce in Latin America fuels expedited order processing, the introduction of same-day or next-day delivery and streamlined returns procedures — resulting in more efficient fulfillment and storage services to enable cost reductions.
Leading the charge in reducing the carbon footprint in the fashion sector are logistics participants who employ electric fleets for last-mile deliveries. Companies like FedEx and DHL have emerged as pioneers in this field. Notably, DHL Express Mexico acquired 100 electric vans in February 2023, leading to an impressive 18% reduction in CO² emissions. In May, DHL Mexico revealed its plan to invest $120 million in Querétaro to expand and automate its Domestic Air Operations Center (HUB).
Direct-to-boutique deliveries are gaining momentum in Mexico City and São Paulo. With this approach, new merchandise deliveries bypass the typical distribution center (DC) and are delivered directly to boutiques to shorten transit times and lower total costs. In addition, startups like One Easy Stop have engineered software that unifies multiple shipping companies. This innovative platform facilitates price comparisons based on shipping and receiving destinations and the weight of goods.
The realm of automated and predictive supply chain management has been embraced by prominent fashion distributors such as Lojas Renner in Brazil. In 2022, the company embarked on constructing a novel distribution center to enhance its logistics processes. This endeavor is anticipated to halve the time needed for supplying domestic branches, consequently expediting the delivery of online orders. This feat will be possible by leveraging automation tailored for hanging and folded merchandise.
The ascent of the online channel within the fashion sector has propelled the significance of omnichannel solutions throughout the supply chain. This comprehensive service spans various phases, encompassing quality control during manufacturing, distribution to retail points, and even reverse logistics to manage returns. For instance, it can involve fashion distribution services in the Americas that have regional warehousing locations in Miami and Panama for deliveries to markets across the region.
In Argentina, Plaza Logística manages logistics parks that facilitate infrastructure and service sharing among companies, resulting in a nearly 50% cost reduction. Notably, this company has undertaken a significant investment, unveiling plans to expand three of its six parks. This expansion, requiring an estimated investment of around US$80 million, will adhere to the Excellent in Design for Greater Efficiencies (EDGE) standard, aimed at fostering the development of eco-friendly constructions by reducing electricity, water, and material consumption by as much as 20%. This standard is advocated by the International Finance Corporation (IFC), a division of the World Bank. Businesses that attain certification for 80% or more of their portfolio through this global standard are eligible for the prestigious international EDGE Champion award. Plaza Logística already earned this accolade in 2021.
Major Logistics Companies Serving the Fashion Industry in Latin America
To wrap up, we wanted to share a quick breakdown of the key logistics players within the LatAm fashion space in different countries.
Next Steps
Contact us to find out how we can help you with a market research study to deepen your strategic knowledge of the LatAm fashion logistics market. Our team can help you with a variety of study types, including:
- Market landscaping: Understand the market drivers, key players, future projections and more
- Opportunity benchmarking: Discover new sources of revenue, new market segments and other ways to drive up your company’s earnings based on market conditions in specific countries or in Latin America in general
- Partner or acquisition research: Find local partners in the region to expand your operations or potential acquisition targets to expand your company’s footprint
- Competitive intelligence: find out what your competitors are planning, current strengths and weaknesses, and much more
Of course, these are just a small sample of the study types we can prepare to help you understand the fashion logistics sector in Latin America.
Reviewing our case studies or contacting us directly can help you explore how our LatAm logistics market intelligence services can help you with strategic planning, making decisions, growing your business and other paramount concerns.
