Can Mexico be the next ecommerce frontier?

Ecommerce Sales Heat Up South of the Border

Can Mexico be the next ecommerce frontier?

The next market on the cusp of entering the ecommerce frontier hails from just south of the United States, in Mexico. Although dominated by high crime and poverty rates, Mexico will likely be the latest nation to emerge into the realm of ecommerce. Regardless of its internal issues, Mexican ecommerce is a definite probability. Its population of 122.3 million is comprised of a middle class that is 39.2% of its entire nation – that’s 47.9 million people. Which, when it comes to access to mobile technology and some disposable income, is good for the growth of ecommerce.

A study completed by Forrester predicts that Mexican ecommerce sales will increase by 150% from where sales stood in 2013 to 2018, growing from $2.2 billion to $5.5 billion. The number of buyers is also estimated to increase, from 8.4 million in 2013 to 18.0 million in 2018 – a gain of 114%. So far, travel expenditures comprise 36% of all internet sales – which, in developing ecommerce markets, is not uncommon. Consumers feel more comfortable buying intangible items like bus and airplane tickets initially, until they feel it is safe to buy physical goods.

There are a few factors that could shift Mexico’s current ecommerce market from travel purchases to physical goods. One such factor is the population size and influence of young consumers, who usually drive ecommerce forward in nations with a budding market. Mexico’s average age is 28, which is promising. However, only 47% of citizens regularly used the internet in 2012. As young consumers become the predominant workforce and economic drivers, this number may change.

Additionally, the wealthy population of a region will often initiate growth in a burgeoning ecommerce market. Though they will still purchase luxury goods and designer clothes in-store, online shopping is gaining an audience amongst the elite, possibly for its ease and convenience. In fact, “the three largest cities in Mexico – Mexico City, Iztapalapa, Guadalajara – account for over two-thirds of Mexico’s online sales” (Practical Ecommerce).

Mobile commerce will also play a large role in the success of Mexico’s ecommerce stability. Much like US consumers, mobile devices are becoming increasingly popular for making online purchases. Mexican smartphone users complete purchases 3 times more than those without a mobile device. The emergence of Mexican ecommerce depends heavily on the 86.7% of the population who own a smartphone to continue buying online.

Though there are serious obstacles in the way of Mexican ecommerce, such as low credit card penetration, no primitive financial system and a limited population with bank accounts, the outlook is still hopeful. Access to online shopping could provide opportunities for business-minded citizens to open small businesses, develop a richer economy and spread resources to rural cities that don’t have a super-center retailer.

Do you think Mexico stands a good chance at emerging onto the ecommerce frontier? Or have you heard of another prospering market that will likely grow its online sales and stores? Let us know your thoughts in the comments.

Source: Kaplan, Marcia. “Mexico Poised for Ecommerce?” Practical Ecommerce. Practical Ecommerce, 11 Dec. 2014. Web. 11 Dec. 2014.

About the Author

Tiana Byers

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Tiana is a content marketer and writer. Her favorite author is Oscar Wilde and she is a self proclaimed Etsy addict.

Tiana ByersEcommerce Sales Heat Up South of the Border

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