Ecommerce in Mexico presents enormous potential. Since 2017, it has positioned itself as the country with the highest growth in Latin America, with an increase of 81% compared to 2020. This fact reflects a change in confidence indicators when it comes to online purchases (7 out of 10 customers now have confidence when buying online) along with a change in frequency of purchases – today, 50% of shoppers buy online every month.
The accelerated adoption of digital services as a result of the changes brought about by the pandemic forged the ideal terrain for ecommerce in the country to gain momentum, but in terms of cross-border ecommerce, the data has changed significantly.
Cross-border ecommerce – state of play
Only 15% of the Mexican SMEs sell internationally through online channels, and the vast majority do so via third-party platforms such as Amazon, which reflects the lack of a greater impulse among digital buyers to use this modality of purchase more often.
According to AMVO’s studies, when asked to choose multiple options that suit them best, 53% of shoppers said that if they would buy online on international sites they would probably opt for fashion items (clothes, shoes, accessories), 46% would opt for electronics, 46% for consoles/video games, and 41% for sporting goods.
Therefore, the Mexican consumer is ready to make online purchases across borders, with 60% claiming that they bought products outside of Mexico already. Among their prime motivators are low prices and greater diversity and quality in products, positioning the US, China, and Japan as the preferred countries for these purchases. AMVO’s data also indicate that the most popular categories for cross-border ecommerce are beauty and cosmetics (32%), pet care products (30%), and food and beverages (27%).
Nonetheless, shopping across borders still presents a great challenge: working on improving the perception that today’s consumers have in terms of high shipping costs, long delivery times, fear of not receiving their purchase or having to pay additional taxes. However, in Mexico, this sector represents a huge potential that can be exploited because only a few Mexican SMEs sell online in other countries.
The Mexican export market and its potential
The conditions of the pandemic determined many people to purchase goods and services on international websites for the first time, and Mexican SMEs have a great opportunity to join cross-border trade in this new context. In fact, 48% of the SMEs that sell online now began to do so after the pandemic.
So there is a great opportunity to boost Mexico’s exports. Despite the fact that their value grew, going from MXN 403 billion in 2014 to MXN 480 billion in 2019, there are still a lot of markets to be exploited, since most of the exports are concentrated in the US, Canada, China, and Germany.
Similarly, imports in the country went from MXN 366 billion in 2014 to MXN 433 billion in 2019, concentrated mainly in the US, China, Germany, South Korea, and Japan.
We work closely with the authorities to continue promoting a friendly legal framework that facilitates the growth of exports coming from Mexican companies. The T-MEC (the new Free Trade Agreement between Mexico, the US, and Canada) raises new opportunities for boosting digital trade in the country, since customs duties are excluded for exported or imported digital products, which in theory shapes a more favourable outlook for Mexican SMEs to reach new markets.
Furthermore, we are collaborating with the private sector to enhance the chances of Mexican SMEs to enter a global market. We know that working with foreign suppliers poses challenges derived from language differences or having to use various payment methods, but there is nothing that correct planning, preparation, and analysis cannot solve.
We must also acknowledge the importance of creating initiatives such as the COMERCIA MX website, developed thanks to the cooperation between ConnectAmericas, the Inter-American Development Bank, and the Ministry of Economy (Secretaría de Economía) of Mexico, as well as the Export Guide – prepared jointly by the private and public sectors – which seeks to resolve the main concerns of companies interested in expanding their business to other markets.
Ultimately, cross-border ecommerce in Mexico will gain momentum in the coming years, and in order to reap its rewards, it will be necessary to focus the efforts related to secure, digital, cross-border payments towards:
the ecommerce space and MSMEs: ecommerce logistics, last-mile delivery, and trade facilitation;
financing instruments for MSMEs and fintechs as facilitators of ecommerce;
training MSMEs when it comes to ecommerce and export promotion.
This article was first published in our Cross-Border Payments and Ecommerce Report 2021–2022, which taps into the fast-growing cross-border market and provides a comprehensive overview of trends and developments that are pivotal in this space, being the ultimate source of information for ecommerce businesses interested in expanding globally.
About Pierre-Claude Blaise
Pierre-Claude Blaise is the General Director and co-founder of the Mexican Association of Online Sales (AMVO). In his professional career of more than 20 years, both in multinational companies and startups, he has dedicated himself to guiding and promoting the transformation of brands and organisations so that they prosper and develop, especially in the digital environment.
The Mexican Association of Online Sales (AMVO) is a non-profit civil organisation established in 2014 with the purpose of supporting and promoting the development of electronic commerce and the digital economy in Mexico. The AMVO brings together more than 500 Mexican and international companies (startups, bricks, agencies, and pure players) from the retail, fashion, travel, financial services sectors, among others, that seek to develop their electronic commerce capabilities and apply the best practices of the industry.