Stay in the loop
Sign up for event alerts, as well as insights from our experts.
Great article from Forbes Magazine contributor Nathaniel Parish Flannery who asks the question, ‘Will Mexico Become The Most Important e-Commerce Market In Latin America?’
It’s something that we have a view on here at allpago, but it’s good to see the discussion being broadened out in the wider media.
Flannery makes the point that in some of the less salubrious suburbs of Mexico City, where cash is king and some of the criminal gangs control the trade, shoppers are attracted to great deals on DVDs, vitamins and clothes. And these same shoppers would not consider using their credit card for an online purchase.
The irony is of course there for everyone to see. People are quite happy to shop in dubious areas, where criminal gangs are known to operate on a wide scale, but think that using a credit card on a website is ‘dangerous.’
But, it’s not only online security that worries shoppers. Another person quoted in the article said that she wouldn’t shop online for clothes, because she liked to try them on first. Yet, on a positive note, she does the internet to make travel plans, buying hotel rooms and flight tickets.
Another problem currently with online purchases, is that according to the article, the Mexican mail system is not only slow, but also unreliable as to whether the goods turn up at all. So, not the best situation for the online shopper.
Some key facts paint an interesting backdrop to the online shopping market in Mexico. It’s said that less than 20% of the 51 million Mexicans who have the internet, use it to make online purchases. What’s more, over 60% of people don’t have a bank account.
Yet despite these sobering statistics, the point is made that over 30% of all Mexican residents actually use a smartphone. Indeed, in Latin America, Mexico has the largest mobile market.
Combine this with the fact that Mexico is the second biggest economy in Latin America and you have a huge potential. And this market is, says the article attracting the major US retailers such as Amazon, Wal-Mart and Home Depot.
Mexico is at an early stage of its e-Commerce development, still some way behind Brazil and Chile. Yet, early stage means an e-Commerce market which was worth $2.8bn and an expected double that by 2019. With 122 million residents in Mexico, and smartphone ownership rapidly growing, its perhaps easy to see why there is such excitement about e-Commerce in Mexico.
Add to that the fact that the country’s top income earners, those with an average yearly income of over $40,000, equate in size to the entire population of Chile. Furthermore, by the end of 2018, there is expected to be some 80 million Mexicans who use the internet, of which over 21 million have the potential to become online shoppers.
Another factor is the entrance of Amazon into the market, which could be a major driver of the e-Commerce market.
allpago agrees that Mexico is an exciting potential market and already is seeing a dramatic rise in interest in payment platforms and payment technologies. We believe that the growth forecasts are a little conservative and once the major players such as Amazon start to gear-up, then progress will be rapid.
allpago international is the leading payment provider for the LATAM region. allpago provides the most relevant local payment methods through one API and one single platform. Allpago offers the best conversion rates ensuring state-of-the-art technology and legal advice necessary for a successful e-Commerce operation in Latin America.
allpago enables start-ups to Fortune 500 companies to offer the necessary local payment methods in the Latin American market, which account for around 80% of their revenues. Current clients include Art.com, Getty Images, Intel Security McAfee, Norton Symantec, Paylogic, Sumup, Teamviewer and many other leading payment and digital companies.
Image courtesy of nokhoog_buchachon at FreeDigitalPhotos.net
Explore other insights
You might enjoy these other nuggets of wisdom.