The Future of Mexican SMEs: Exports to Increase Margins

More than 64 percent of SMEs operating in Mexico sell through digital channels, representing a 94.6 percent growth compared to 2019. The data, which is considered very positive for the retail sector in times of the pandemic, is taken from the Study on Online Sales in SMEs 2020, conducted by the Mexican Association of Online Sales (AMVO) in collaboration with GS1. The report, which celebrates its second edition, also highlights the export opportunity for Mexican products, as it ensures that 54 percent of SMEs in Mexico want to export their products through digital channels. “There is a lot of demand for Mexican products in places like China, US or the European Union. We have to take advantage of what is happening,” Pierrre-Claude Blaise, AMVO’s General Director, told Forbes.

The study points out that the search for other markets has become one of the keys to survival for most Mexican SMEs, especially because of Mexico's high logistics costs that sometimes even exceed production costs. This situation is aggravated in the case of perishable foodstuffs, which require deliveries to be made in the shortest possible time in refrigerated units. However, the report also notes that exporting does not solve these difficulties, since many destination countries require regulations in which Mexican producers must work if they want to sell their products abroad.

Social networks such as Instagram or Facebook and e-commerce platforms such as Amazon or Mercado Libre have become the perfect allies for Mexican companies, as they allow companies to have a greater presence among potential customers, while saving technological costs. “COVID-19 -became the main trigger for the digital transformation of SMEs, as well as the accelerator for their entry into the world of e-commerce and digital platforms. Within the new normality, e-commerce will boost their positioning, geographical scope of their products, resonance and breadth of their content, emotional connection with the consumer and omnichannel nature of their business strategy,” Gerardo Brehm, Director of Marketing and Institutional Relations of GS1 Mexico, told Milenio.

COVID-19 was also featured in the study presented by AMVO. The report notes that 83 percent of companies surveyed have seen a decline in sales since the beginning of the pandemic, while 59 percent say that online sales have increased since the beginning of 2020. “Online sales have become one of the top priorities for Mexican SMEs in the short-term,” Brehm said.