Snapshot Graphic 2x1_MEXICOBI INTELLIGENCE

Mexico, Latin America’s second-largest economy, is quickly becoming the region's e-commerce frontrunner. With a stable economy and burgeoning middle class, e-commerce in the country is estimated to grow at a compound annual growth rate (CAGR) of 25% from 2015 to 2019. Moreover, logistics may be easier than in most emerging economies, due to Mexico's relatively small size and massive urban population. The country also provides unique advantages for US companies looking to expand, as they can employ their US distribution centers to support Mexican operations. However, with the renegotiation of the North American Free Trade Agreement (NAFTA) up in the air, this benefit could be eliminated if new tariffs are imposed and the movement of goods between countries is restricted.

Mexico by numbersBI Intelligence

Major E-Commerce Players In Mexico

MercadoLibre. Argentina-based MercadoLibre is the market leader in Latin American e-commerce, with the majority of its revenue coming from Mexico, Brazil, Argentina, and Venezuela. In Mexico, it's seen impressive growth of late, with items sold rising 47% year-over-year (YoY) in Q4 2016. However, while it held 21.2% of the Mexican e-commerce market in 2011, that share declined to 9.5% in 2016, likely due to increased competition. The company offers a secure payment system similar to PayPal, called MercadoPago, which also allows customers to pay for offline purchases at convenience stores.

Walmart. Walmart de Mexico (Walmex), Mexico’s largest retailer, has been consistently growing its e-commerce arm, with online sales increasing 35% YoY in Q2 2017. The company has 3,046 stores in Mexico, which dually support its e-commerce business by allowing customers to pay for online transactions in cash onsite. Additionally, it has pledged $1.3 billion to increasing its logistics operations in Mexico over the next three years, likely in a bid to compete with Amazon's shipping speeds. However, Walmex has seen ramifications from corruption in Mexico — it was discovered in 2012 that employees had paid bribes to gain construction permits, a [...]