Ecommerce in Mexico | Trends and Opportunities
Ecommerce in Mexico is only becoming more popular. With more people accessing the internet and using mobile phones, online shopping is quickly replacing in-store purchases. 90% of Mexican consumers are satisfied with their online purchases, making this a promising market for sellers.
But what if you’re an international seller? While selling products in Mexico has many opportunities, understanding this market is key to successful infiltration. Ecommerce in Mexico also has downsides, and online sellers must prepare their strategies to combat these problems.
Here are the opportunities and challenges that eCommerce in Mexico brings to international sellers, and how to start your expansion correctly.
Overview of eCommerce in Mexico
By 2024, eCommerce sales in Mexico are expected to reach $611 billion. Compared to previous years, Mexican eCommerce will experience a 31% increase. In all of LATAM, Mexico is the second-most popular country for online shopping, following behind Brazil.
Economic problems have overtaken the nation, but technological innovation has made it possible for the Mexican population to shop online. The COVID-19 pandemic also decreased in-person shopping and accelerated eCommerce.
Other societal factors have made eCommerce more popular in the region. There are 99.2 million social media users in Mexico, which influences purchasing decisions. Since eCommerce is a convenient way to shop, more people prefer buying clothing and shoes online.
Why Is Ecommerce in Mexico Appealing for International Sellers?
Mexico has become one of the most demanded markets for international eCommerce stores for many reasons. Thanks to digital marketing, it’s easy to reach an audience. Plus, Mexico still has low competition, so gaining a consumer base is easy for international sellers.
Amazon and regional marketplaces like Mercado Libre make expansion simpler. These businesses also offer fulfillment in Mexico, so international businesses don’t have to worry about accepting payments and shipping.
Challenges and Solutions When Selling in Mexico
Expanding to any business is difficult for international sellers, but eCommerce in Mexico has unique challenges.
The country’s economic state, the consumers’ unique demands, and the sociopolitical landscape are only a few considerations that eCommerce businesses need to make when expanding to Mexico.
Mexico hasn’t always had the best infrastructure. The country only invests less than 1% of its GDP in infrastructure.
Transportation was always a huge issue in Mexico. The country has a high population; most individuals live in Mexico City and other major urban areas. Besides, those in rural areas may not be able to access eCommerce products as readily as those in major cities.
The situation is improving, however. Mexico just opened a new airport, invested in new highways, and built a massive railway system. This will improve eCommerce delivery times, and online shopping will be more accessible to those in rural areas.
Mexico’s shipping landscape is very complex. The country has many restrictions on which items are allowed into the country. Shipping products directly from your local warehouse to your customers is a hassle.
But third-party fulfillment is popular in eCommerce in Mexico. As an international seller, you’ll ship your items to a regional warehouse, which will be sent to customers when they order products.
Due to this scenario, private fleets are a more popular transportation option, especially for expedited deliveries.
While eCommerce in Mexico has been largely untouched by international sellers, local businesses have dominated the industry. Even though eCommerce is becoming more popular, local brick-and-mortar businesses still anchor trust among the population.
One of the biggest mistakes international eCommerce sellers make is listing products in their own currency. For example, 1 US dollar is worth 17.09 Mexican pesos. This makes it difficult for Mexican consumers to afford international products.
There is also a lot of online fraud in Mexico. Debit and credit card fraud are the two most common examples, so consumers may be wary of purchasing items online.
A great solution is to Invest in the customer experience. Such a tactic will help international sellers remain competitive and achieve serious regional growth. For example, list products in the local currency and communicate your devotion to data security.
In 2022, only 49.1% of the Mexican population had a bank account. There are many reasons for the country’s low banking adoption rate. Since many people live in rural areas, they may not be able to access a bank and only pay in cash.
Banking in Mexico also comes with high fees, and many people can’t afford to open an account.
It’s recommended to get creative with payment methods. While many Mexican consumers may not have a traditional bank account, they prefer alternative payments. For example, 85% of the Mexican population uses PayPal, since this service is free for a personal account and comes with low transfer fees.
Always accept PayPal and similar payment methods when expanding to eCommerce in Mexico.
Not all consumers use any digital payment options, however. For best measures, offer the option for consumers to pick up their items at a local business and pay in cash, in case your consumers don’t have or refuse to use electronic payment methods.
This language barrier can make offering the best customer service and communicating product information difficult. Plus, language barriers can make marketing in Mexico very difficult.
It’s ideal to offer services and marketing in Spanish. Over 120 million people in Mexico speak Spanish, which is the obvious language to use in customer service and marketing.
Always hire local customer service representatives who can speak Spanish. You can hire translators to write Spanish product descriptions and marketing materials.
Best eCommerce Marketplaces in Mexico
Mexico has three major online retailers: Amazon, Mercado Libre, and Walmart. While Amazon and Walmart are American companies, Mercado Libre is the only Latin America-specific eCommerce giant. All three marketplaces offer unique benefits for international sellers.
It’s no surprise that the global eCommerce giant Amazon also dominates in Mexico. 50 million people in the region use Amazon. Mexican consumers love Amazon because of its wide range of products.
Because expanding an existing Amazon Seller account to Mexico is very simple, this marketplace is a popular one for the new Amazon international seller.
Amazon FBA is also available in Mexico. If your business already uses FBA, Amazon delivery in Mexico is simple.
Don’t underestimate the popularity of Mercado Libre, since this is one of the best business opportunities in Mexico. In 2022, their eCommerce sales soared an extra 21.5%, making this marketplace the best alternative to Amazon.
One of the benefits of Mercado Libre is it’s close to home. Even though Mercado Libre was founded in Argentina, it’s a specific marketplace to the Latin America region and has its own distribution center in Mexico.
This means selling on Mercado Libre will increase consumer trust and will make your business more competitive in the region.
If you don’t know how to sell on Mercado Libre, visit their website to learn about their global selling services. You can choose remote fulfillment or marketplace expansion when signing up.
If you want your expansion to be part eCommerce and part in-store retail, Walmart is your best option. Walmart owns most supermarkets in Mexico. Because Walmart is a brick-and-mortar store, you can offer delivery and pickup, and Walmart has flexible payment options.
Plus, Walmart is a household name. Walmart expanded to Mexico in 1991 and has had a major presence there. Consumers love Walmart because they can find nearly anything at this store–from clothing all the way to groceries.
eCommerce in Mexico Is a Profitable Opportunity
Because eCommerce in Mexico is growing in popularity, international sellers see this as a promising region for expansion. The most popular products in Mexico vary from fashion to food, so businesses in nearly all industries can thrive in this region.
If you want to ensure you can increase sales in the region, you’ll want to trust the experts to make your expansion as seamless as possible.
GoAvance can help your eCommerce expansion. Our services include importing, logistics, marketing, compliance, and more. All these services ensure you will thrive in the Mexican market.
Click here to learn more about our services.
Stephanie Jensen has been writing e-commerce content for seven years, and her copy has helped numerous stores rank on Amazon. Follow her on LinkedIn for more insight into freelance writing and creating high-quality content.