Ecommerce in Mexico reached MXN 401.3 billion (USD 20.3 billion) in 2021, having experienced a 27% growth compared to the previous year. Due to this, digital commerce represents 11.3% of total retail sales – and for the third year, Mexico is in the top 5 countries with the highest growth in ecommerce retail, along with important markets such as India, Brazil, Russia, and Argentina.
Ecommerce in Mexico exceeds the world average by more than 10 points, demonstrating a market with solid expansion. It is also one of the countries with the most significant weight of ecommerce retail of the total sold in the retail channel, surpassing the world average and developed markets such as France, Germany, Italy, and Brazil.
Lately, banking services and payment for services have become more relevant for the digital consumer after the quarantine ended, and the market saw the reactivation of online purchases related to shows and events, as well as urban mobility. Credit and debit cards continue to gain ground, but other payment methods are becoming more and more relevant.
Fintech, ecommerce, marketplaces, and financial institutions have done a great job of making online purchase processes more accessible. Therefore, more and more Mexicans are taking advantage of the benefits that this system provides for them. This reflects in numbers, as the debit card is the most used payment method by 88% of Mexican digital consumers, according to the Online Sales Study Mexico 2022 published by AM VO. This figure is followed by cash on delivery and payment by credit card.
On the other hand, we still need to work on different aspects, such as favouring the development of a frictionless payment ecosystem and improving the operation of the various payment systems for access to the digital economy, which is already a work in progress. Other important aspects are the necessity to work for an expansion of payment instruments to all segments of the population, followed by the need for facilities to process domestic and transnational payments. For the latter to improve, the following measures should be promoted:
lower processing costs (discount rate)
increase in the acceptance rate (approval of transactions)
rationalise the distribution of chargeback risk (to verify the validity of transactions before financial institutions) – since, for online merchants, chargebacks are particularly damaging, as they represent an economic impact on business.
CoDi is a platform developed by Banco de México (BANXICO) to facilitate payment and collection transactions through electronic transfers quickly, safely, and efficiently through mobile phones. It works in a 24x7 scheme, and CoDi uses QR codes and NFC to facilitate users and retailers to make cashless transactions.
However, in Mexico, the debit card is still the most widely used payment method. However, due to the immersion of more users in the digital world, the offer of payment methods has been increasingly amplified, both from the point of view of the business and the buyers.
Cash on delivery is one of the most used methods, as it gives the buyer the certainty and security that they will receive the order promptly and they will not be a victim of fraud. This payment option is followed by cash payments in commercial chains (such as convenience stores or pharmacies), which is reasonably practical for the buyer since they can pay at several points around their location.
We can define the Mexican buyer as omnichannel, since they tend to consult physical and digital channels before purchasing. We can also conclude that they are informed buyers, aware of the acquisition they want to make.
On average, shoppers mention five main reasons for buying online, recognising the benefits of home delivery, avoiding trips to physical stores, and having access to exclusive digital channel inventories. In 2022, we see online shopping becoming more and more part of consumers’ daily lives.
50% of consumers base their purchase decision on the payment methods offered by websites, not only credit or debit cards but others as well, such as cash payments at convenience stores or aggregators.
Having as much information about the product or service is vital for the consumer, which must be accompanied by photographs or videos that show as accurately as possible what the item looks like.
This editorial piece was first published in The Paypers' Cross-Border Payments and Ecommerce Report 2022–2023, 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 CEO 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.
About The Mexican Association of Online Sales
The Mexican Association of Online Sales, A.C. (AMVO) is a non-profit civil organisation established in 2014 to support and promote the development of electronic commerce and the digital economy in Mexico. The AMVO brings together more than 560 Mexican and international companies (startups, bricks, agencies, and pure players) from the retail, fashion, travel, and financial services sectors, among others, that seek to develop their electronic commerce and apply the best practices of the industry.
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