Digital considerations when targeting Mexico
The region has seen a 59% rise in internet users between just 2015 and 2017, equating to 70 million in total. The Mexican e-commerce market is expanding and it is reflecting a sustainable and constant improvement. This boom can largely be put down to the development of infrastructure, fight against online fraud and reduction of internet prices and smart-phones since 2016 since the telecommunications reform of 2013.
With this in mind, it is crucial that brands are aware of certain challenges when considering expansion with their online marketing activities into Mexico. If we take into account that Facebook is totally dominant in the world of social media in this market, where more than half the population (51.7%) use this social platform in 2017, the need to build a solid online presence on this platform has never been more prevalent.
With the cost of online roaming on mobile decreasing, as well as the vast increase in smartphone adoption, there has been a significant penetration in purchases of mobile phones in this area. This represents 35.6% of Mexican digital buyers with the closest market being Colombia, with 33.8%. This actually exceeds the average in Latin American markets, with 45% of the mobile buyers in Mexico opting for an Android OS and 45% for IOS. It is important to take this trend into consideration – which is already the norm in many other markets –and ensure that mobile optimisation is always taken into account in order to boost a brand’s website interaction and conversion.
As previously mentioned, the e-commerce landscape has vastly improved with the recent decrease in internet costs and fight against online fraud. However, credit card fraud rates are still a reality for costumers with a 56% percent of customers having reportedly experienced card fraud in the past 5 years. As a result, there might be a worldwide consideration that the country’s infrastructure and fraud laws still need considerable upgrades and that buyers find it difficult to trust online purchases due to the online payment systems being relatively new. From a merchant’s point of view, it is important for an online retailer to try and test multiple payment systems, in order to find the ideal combination of geographic reach, services, rates and fraud control.
One route that many retailers choose to take is the use of PayPal, in order to avoid having to pay the cost of fraud, however for the purposes of user experience, alternative payments are recommended. Oxxo Pay is a system that dominates the offline payment landscape in the region, as it means that Mexicans are able to pay for goods and services in instalments without interest.
In addition to the payment methods, one element very important to Mexican customers, is delivery times and options. Delivery costs in Mexico are commonly quite high due to the need to incorporate insurance and the overall cost of transport if the customer does not live in one of the larger cities. Fast delivery time and cost information are therefore key, as they vary substantially depending on the state. Notably, online buyers are also starting to be more demanding and are expecting between 24 and 48 hours delivery timeframes, largely due to influence from brands such as Amazon.
A key factor to bear in mind when launching a website and online campaigns in this market is that the most common terminology used in written content by costumers is heavily influenced by U.S. and it is very varied, consequently brand’s content needs to be reviewed frequently to be at the top of the wave and to create brand credibility by demonstrating that you know how your audience speaks.
In spite of all these key factors, when entering the Mexican market, there is no doubt that with a population of 125ml+ and an internet penetration of 75.7% it offers a promising future for online commerce. The country is steadily developing its infrastructure and the offering of online payment options, and moreover, Amazon has had an essential positive impact on Mexican customers trust online websites in the past few years.
One of the biggest e-commerce attractions in Mexico besides the Christmas season it is the celebration that takes place from the 17th to the 20th of November called ‘El Buen Fin’. This festivity, now transformed into an online phenomenon since its first launch in 2011, commemorates the weekend prior to the start of the Mexican independence. In an attempt to promote online sales, there are 3 consecutive days costumers can enjoy great online discounts. According to AMVO, Asociación Mexicana de Venta Online, 97% of costumers after buying online during the ‘El Buen Fin’ become recurring online purchasers during the rest of the year.
Another important online hit in Mexico is the event called Hot Sale, which is a combination of ‘El Buen Fin’ and ‘Cyber Monday’, and that is organised by AMVO. It is a fairly new e-commerce event, and as a result, there is no established date when it should take place. However, for 2017, the chosen days were 29th May to 2th June, lasting only 4 days in total.
In addition and to no surprise, Mexico has a high demand for foreign goods, an example of this is its position as the 3rd largest goods trading partner with U.S., which represented to the U.S. $525.1 billion only during 2016.
Mexico definitely holds a great growth potential, with currently 37.9 million online shoppers and projected to reach 55.3 million by 2020, and a great chance to build an online presence. It might have its share of challenges, but nevertheless the opportunities are too attractive to be missed.
Sources:
http://increnta.com/es/blog/marketing-digital-en-mexico/
https://www.export.gov/article?id=Mexico-Internet-and-IT-Services
https://www.emarketer.com/Article/Mexico-More-Digital-Buyers-Use-Mobile/1014179
https://www.emarketer.com/Article/Why-Retailers-Must-Optimize-Mobile-Sites/1012749
http://totalaccess.emarketer.com/reports/viewer.aspx?r=2002047
https://www.ecommerceworldwide.com/expert-insights/expert-insights/5-tips-for-capitalising-on-the-ecommerce-opportunity-in-mexico
https://www.about-payments.com/knowledge-base/markets/which-online-payment-methods-to-accept-in-mexico
https://www.emarketer.com/Article/eMarketer-Updates-Worldwide-Internet-Mobile-User-Figures/1015770
https://www.emarketer.com/Article/Internet-Users-Mexico-Will-Spend-More-Time-Online-2016/1014125http://increnta.com/es/blog/comercio-electronico-en-mexico-2015/
http://expansion.mx/empresas/2017/07/27/asi-se-expande-amazon-en-mexico
http://eleconomista.com.mx/industrias/2016/10/28/buen-fin-puerta-atraccion-e-commerce-amvo
https://www.promodescuentos.com/hot-sale-mexico?sort=new&page=2#footer-description
https://ustr.gov/countries-regions/americas/mexico
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