eCommerce in Mexico — How to Sell Online on the Mexican Market

A dynamic high-growth e-market

The Mexican retail eCommerce market has grown by 300% over the last five years, pushing it into 16th place globally — ahead of its neighbor Brazil. As well as fueling domestic digital retailing, Mexican shoppers’ desire for international brands and products is also powering a healthy cross border market More than two thirds (67%) of Mexican online consumers now shop cross border, and 6% of all online sales come from foreign merchants.

Riding the Mexican digital wave

Analysts predict there will be 78 million online shoppers by 2025 — more than both the UK and Germany. Growth is being fueled by large public and private investments in the country’s internet infrastructure; increasing smartphone adoption; streamlined customs procedures; and the rising adoption of electronic payment methods, such as digital wallets.

The challenge for digital retailers

While Mexico has done much to reduce its income and technology gaps, the country still ranks among the world’s lowest in terms of consumer spending, banking rates and smartphone adoption. In 2020, online sales made up only 6% of all retail sales.

What sellers need to do to win

To develop and grow your eCommerce market in Mexico, it’s vital to understand and cater to the country’s unique buying and payment preferences; to navigate local banking and logistical requirements; and to find a way to wrestle market share away from local favorites like MercadoLibre and Coppel, not to mention big global retailers.

1. Optimize stores, payments, and cart flow for mobile

With over 88 million mobile internet users in Mexico, it’s no surprise that the smartphone has surpassed the desktop as the preferred way to shop online. M-commerce sales in Mexico are forecast to reach $33 billion (US) by 2024. Retailers must be ready with responsive platforms that deliver for shoppers wanting to search, browse and buy using their mobile phones.

2. Embrace key sales seasons

The hunt for online bargains, has become part of the national fabric and is now celebrated three or four times a year via events like the week-long ‘Hot Sale’, Mexico’s Black Friday or ‘El Buen Fin’ and ‘Children’s Day’. These offer valuable opportunities for existing and prospective merchants looking to enter the Mexican market.

3. Be inclusive with payments

The most popular online payment methods in Mexico are debit and credit cards (47%). Digital wallets are also on the rise as are installment-based payments for more expensive items. Merchants should consider offering domestic BBVA debit and credit cards and local favorites, such as MercardoPago and RapiPay. With 27% of 2Checkout orders in Mexico conducted via PayPal, we also recommend adding PayPal express optimization to help boost conversion rates. While the trend is towards e-payments, 70% of Mexican consumers don’t own a bank account, so pay on delivery or buy online, pay in store (BOPIS) can help empower cash-only customers.

4. Wherever possible, localize the experience

Mexicans are skeptical of new brands and will abandon a seller at the first sign of friction. To help build trust cross-border retailers should reassure them with a great native experience in terms of language (only 12% speak English), currency, and social and other proof displayed in the shopping cart. 2Checkout recommends using dynamic templates that automatically localize pricing and language based on the customer’s browser. Our studies show setting the language to Spanish in Mexico, generates a 12% higher conversion rate.

5. Test and Optimize Cart Flows

While many of 2Checkout’s merchants utilize a streamlined flow for Mexico, those that have tested a flow with the review step have experienced a 2% higher cart conversion rate. This is especially true for orders greater than $10 in value. While the data points to a clear preference for including the review page, we recommend testing your flow, as your results may vary.

6. Take action to protect your customers

Shoppers aren’t the only ones shifting their activities online, fraudsters are too. Include security measures such as 3D Secure and the new 3DS2 protocol and use eWallets and direct debits, to help minimize fraud and chargebacks. At the same, time keep customer data safe and avoid non-compliance fines by ensuring you adhere to local consumer protection laws like the Federal Law on Protection of Personal Data Held by Individuals (LFPDPPP).

7. Based abroad? Don’t fall into the VAT trap

The Mexican tax authorities (SAT) require non-residents providing specific digital content and services to collect 16% VAT on sales to Mexican customers. Overseas retailers should check if these rules apply to their products.

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2Checkout (now Verifone)

2Checkout (now Verifone)

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2Checkout (now Verifone) is the leading all-in-one monetization platform for global businesses built to help clients drive sales growth across channels.