Describes how widely e-Commerce is used, the primary sectors that sell through e-commerce, and how much product/service in each sector is sold through e-commerce versus brick-and-mortar retail. Includes what a company needs to know to take advantage of e-commerce in the local market and , reputable, prominent B2B websites.
According to the most recent data by the Mexican Internet Association, the Mexican eCommerce market had an estimated value of USD 12.3 billion in June 2018, representing 18 percent growth over 2017. The market is expected to continue growing due to improvements in connectivity, enhanced financial inclusion, more streamlined logistics, and increased digital literacy. Analysts predict that the increased use of e-commerce platforms during the COVID-19 pandemic will cement consumer habits, contributing to growth expectations for the sector. Multichannel brick-and-mortar (brick-and-click) retailers have reportedly seen their online sales grow to account for 25 percent of overall sales According to the National Institute of Statistics, Geography and Informatics (INEGI), in 2019 the country had 80.6 million Internet users, representing 70 percent of the population over the age of six and reflecting a growth rate of 4.3 percent over 2018.
Current eCommerce Market Trends
Transportation services lead the categories of reported online purchases, followed by digital downloads, event tickets, travel, and apparel. Debit cards and personal credit cards are the preferred methods of payment. However, many online retailers offer payment alternatives such as cash payments at convenience stores. The top incentives for online shoppers are secure payment options, free shipping, and a guaranteed return policy. There is a growing trend towards purchasing through mobile devices. The Mexican Central Bank (Banxico) mandated that all financial institutions with over 3,000 clients provide commission-free payments via quick response (QR) code on their mobile applications starting September 30, 2019.
Popular eCommerce Sites
Online marketplaces such as www.mercadolibre.com.mx, www.linio.com.mx, eBay, and www.amazon.com.mx are widely used. Additionally, some brick-and-mortar retailers have been very successful in expanding their eCommerce sales. Among the most popular are www.walmart.com.mx and www.liverpool.com.mx.
Domestic eCommerce (B2C)
Online marketplaces such as Amazon, Mercado Libre and Linio are among the most popular sites for domestic eCommerce in Mexico. Amazon opened its first Mexican storefront and fulfillment center in 2015 and launched Amazon Prime in 2017. It currently has four fulfillment centers in the country. Local department stores have expanded their online operations too.
In 2018, 47 percent of Mexican online shoppers reportedly purchased from international retailers, and 72 percent of those purchases were made on U.S. sites. Mexico’s current de minimis level is USD 50, much lower than the de minimis of USD 800 in the United States. However, cross-border eCommerce stands to benefit from the ratification of the USMCA, as Mexico will continue to provide USD 50 tax free de minimis and also provide duty free shipments for values up to USD 117. The International Chamber of Commerce Customs Guideline #11 defines de minimis as a valuation ceiling for goods, including documents and trade samples, below which no duty or tax is charged, and for which clearance procedures, including data requirements, are minimal.
Mobile eCommerce is growing in Mexico. It is estimated that 60 percent of online purchases are conducted through mobile devices. Buyers access their social networks predominantly through mobile devices, and growth of mobile transactions has also been driven by the popularity of ridesharing networks.
eCommerce Services. Both international and domestic companies support eCommerce start-ups of established retailers that want to expand to online sales. They provide services such as search engine optimization, inbound marketing strategies, lead nurturing, and marketing automation.
eCommerce Intellectual Property Rights. Products sold online are covered by Mexico’s Federal Copyright and Industrial Property Law. The law also protects online original content and domain names.
Online Payment. Personal credit cards and debit cards are the most common methods of payment.
Social Media and Digital Marketing. Use of social media is widespread in Mexico. Facebook is the most-used social network, followed by YouTube, Twitter, and Instagram. Mexican buyers report being highly influenced by social networks when making their purchases. Shoppers go online to conduct price comparisons, research product features, or find nearby stores before making purchasing decisions. The growing trend toward mobility will increase this influence.
Major Online Buying Holidays. Retailers report the highest number of eCommerce sales during the December holiday season. The second-largest online shopping event is ‘El Buen Fin,’ a full-weekend promotion adopted by most Mexican retailers held in mid-November. The third and fourth-largest events are Black Friday and ‘Hot Sale,’ an initiative of the Mexican Association of Online Retailers where eCommerce vendors offer significant discounts over three to four days. It is held in late May/early June. Other major buying holidays are Cyber Monday and Mother’s Day.