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3 Challenges and Opportunities for eCommerce in Mexico

Ezri Hipolito • April 21, 2015

Mexico Offers a New eCommerce Frontier

Mexico is a market that has traditionally been overlooked by online retailers. The list of hurdles that retailers have to overcome often deters them from doing business in the country. However, with online sales estimated to increase by 150% between 2013 and 2018, and the number of online buyers to increase from 8.4 million in 2013 to 18.0 million in 2018, Mexico presents a huge opportunity for online businesses.[1]

The following are some common challenges to Mexican eCommerce and the opportunities to overcome them.

  1. Challenge: Establishing an online presence.
    A relatively small number of businesses have a presence on the Internet in Mexico beyond a simple set of pages describing what the company does, where they are located, and a short description of their products or services.

Opportunity: Build out a digital presence.
Mexico’s Internet use is growing at an annual rate of 17% and there are more than 45 million users, making it the largest online Spanish speaking population in the world.[2] The audience for online stores is there, businesses need to expand their web presence and build online stores in order to capitalize on it.

  1. Challenge: Negative online shopping experiences.
    Many Mexicans are concerned over the potential for issues from online shopping such as lost packages, payment problems, and delivery fees and taxes.

Opportunity: Trust is Growing .
With brands such as Walmart and Amazon establishing themselves in the Mexican eCommerce space, trust levels are growing as people become familiar with the higher levels of service they can expect from, and the trust they can place in, online retailers.

  1. Challenge: Credit and debit cards are not widely used in Mexico.
    The country is still largely a cash economy, and even those with cards don’t feel comfortable providing their information online and would rather pay cash on delivery. This leads to restricted payment options for merchants.

Opportunity: Leverage PayPal and other forms of Digital Currency
Payment processors like Paypal are available in Mexico.  Merchants need to consider alternate forms of digital currency, such as video game credits, as they are becoming increasingly popular and accepted methods of payment. Such methods are increasing trust in consumers to buy online as it becomes easier to track, mediate, and solve problems with transactions.

eCommerce Giants are Leading the Way

The entry into the eCommerce market in Mexico of mega-retailers Amazon, Alibaba, and eBay should greatly help with the three challenges I’ve described. Their presence will help educate consumers, raise expectations on service levels, as well as develop innovations with forms of payment and delivery options.

The success of eCommerce businesses in Mexico lies in the abilities of merchants to concentrate on providing reliable sites to consumers. The rise in Mexico’s Internet population and the number of those people shopping online provides a tremendous opportunity for online retailers to set up shop in Mexico.

[1] Miglani, J. (2013). Forrester Research Online Retail Forecast, 2013 To 2018 (Latin America). Forrester Research. Retrieved from https://www.forrester.com/Forrester Research Online Retail Forecast 2013 To 2018 Latin America/fulltext/-/E-res110161
[2] http://www.ekosglobal.com/insights/global-ecommerce-mexico/

 

Ezri Hipolito Garces is an Applications Engineer on the LYONSCG Support team, and has been providing solutions for day-to-day challenges on Magento since 2012. Besides eCommerce and technology, Ezri enjoys oil painting, traveling, creating software and hardware prototypes for common daily needs and spending time with both family and friends.


Ezri Hipolito

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Ezri Hipolito

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