Why this is important to Wisconsin businesses: Local merchants still lag behind overseas retailers for market share, and Mexican companies are seeking technology solutions to help them capture more of the domestic market.
According to the AMIPCI (Mexican Internet Association), the total value of e-commerce transactions in Mexico has increasing by a figure in the high double digits. Total sales increased from Mx$24.5 billion during 2009 to Mx$257 billion (about $14 billion in USD) by the end of 2015, a tenfold increase in just six years. Data from the last two years show a vigorous increase; the increase in sales from 2013 to 2014 was 34 percent, while the increase from 2014 to 2015 period was 59 percent, and it was estimated that 70 percent of all Mexicans made at least one purchase online during the first half of 2016.
This strong performance was fueled by the increasing presence of electronic devices, such as computers (91 percent ownership), smartphones (90 percent ownership) and tablets (53 percent), especially among those 18 to 34 years old, which is the segment with the most positive attitude toward e-commerce.
Notably, while e-commerce in Mexico is on the rise, domestic retailers are still behind in offering enough supply of merchandise. Hence, up to 60 percent of Mexican shoppers’ e-commerce purchases are made from overseas merchants, mainly based in the U.S., with Asian sources far behind in second place. These merchants often offer better prices than domestic competitors, or may simply offer products not found amongst domestic retailers.
Of Mexico’s online retailers, three out of five report also having a physical store, and two in five report having an app to encourage sales. Most of these domestic retailers engage in online marketing tactics to fuel sales, discounts being the most used, followed by interest-free sales and other sales promotions. Retailers operating both physical stores and online stores report that around 80 percent of their total sales come from the physical location. Hence, despite the massive growth in online sales in Mexico, very few domestic retailers plan to close their physical stores.
Purchase behavior is highly influenced by seasons and festivities, with Christmas, “El Buen Fin” (Mexico’s answer to Black Friday), Valentine’s Day and Mother’s Day being the four festivities that attract more buyers. The products in highest demand online are apparel and accessories; digital downloads; event tickets; video games and video game accessories; furniture, appliances and equipment; toys; computer software; consumer electronics; jewelry and watches; and sports and fitness products. The most popular methods of payment were PayPal, debit card, credit card and wire transfers.
Despite the large increase in e-commerce transactions, many potential consumers are still reluctant to engage in online shopping, in many cases due to security and safety concerns. Companies can attract more customers with attention to these issues, and by ensuring that they offer their customers a totally safe online purchasing experience. The overall positive experience reported by current online shoppers (53 percent describe their experience as “extremely positive” and 34 percent as “somewhat positive”) is a powerful testimonial to the efficiency and safety of online commerce.
There does not seem to be any significant gender difference when it comes to online shopping, but age does make a difference: people in the 18-34 age segment account for 51 percent of total sales, whereas people in the 35-44 age bracket account for only 24 percent of total purchases. The average age of online buyers in Mexico is 36. The fact that 63 percent of online buyers have one or zero children, 87 percent live in urban settings, 50 percent own at least one vehicle, 52 percent are college educated and 51 percent are employed full-time tells us that most online sales come from the young and affluent.