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The big eCommerce platforms increase their presence in Mexico

16. May 2017
Both Amazon Prime and MercadoLibre have reinforced their efforts in the country and expect strong growth in the coming months.

 

The big eCommerce platforms increase their presence in Mexico

The strong growth of online sales in Mexico has encouraged two of the large online platforms, Amazon and MercadoLibre, to target their investments in the country. eCommerce in Mexico saw growth of 59% in 2015, the most recent data published. Even so, it still has a long way to go, as the online channel currently represents 3% of total sales.

In this context, Amazon has just launched its Prime line in the country, specifically on March 7. This service gives consumers access to 20 million products, with free delivery in only 24 hours, and in some cases even same-day delivery. The service will have a cost of 899 Mexican pesos a year (43.5 euros), although the first six months are half price, at 449 pesos (21.7 euros). This price includes shipments made from the United States, although the normal delivery time in this case is 6 to 9 days. Users can pay extra for products to be delivered on the same or the following day.

MercadoLibre has also made a strong start in the country with an investment of 2 billion pesos (96 million euros). This figure corresponds to 73% of the company's earnings in 2016, as explained by Ignacio Caride, director for Mexico, indicating a very strong commitment to this market. According to Caride, 33% of online purchases in Mexico in 2016 were made via cellphones, and the trend is for 66% of new users of electronic portals to access them via this channel. It is therefore key to adapt the platforms to these devices.

Importance for Spain

Mexico is Spain's largest market in Latin American, and the fifth outside the European Union. In 2016, exports from Spain to Mexico were 4.01 billion euros and imports were 3.33 billion euros. This makes Spain the third largest exporter to Mexico in the European Union, behind Germany and Italy. In this scenario, the growth of eCommerce in the country represents an opportunity both for Spanish companies who are already exporting to Mexico and for those who are planning to do so.

It is therefore worth looking at the profile of Mexican consumers, of whom El Economista México has made a snapshot. According to this source, 7 out of 10 Mexican Internet users made online purchases between January and July 2016; 40% of online shoppers are aged between 22 and 34 (millennials); they are followed by people aged between 35 and 44, who accounted for 24% of sales. Men buy more than women (54% as opposed to 46%).

                       

By zones, the highest rate of purchases is concentrated in Mexico City, with 22% of the total. It is followed by Mexico State (10%) and Jalisco (9%). Urban areas are generally the strongest, while rural areas represent only 2% of the total. The products most frequently purchased follow a somewhat different pattern to European countries: clothing is the most popular online purchase (53% of those surveyed had made purchases in this category). It is followed by digital downloads (46%) and tickets for events (37%). Videogames, consoles and accessories come in fourth place (22%), and furniture and household appliances in fifth (21%).

With regard to foreign portals, Europe is still in last place in eCommerce in Mexico. Mexican's favorite websites are based in United States (61%), Asia (41%), Latin America (13%) and Europe (9%). It is also worth noting that Europe has declined since 2015, when 11% the respondents said they had shopped on websites from that area.

Finally, PayPal is Mexico's favorite payment channel (used by 62% of respondents), followed by personal bank cards (56%), transfers (51%) and the commercial credit card (27%).

Sources: ICEX, Xataka México, Forbes México, El Economista

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