E-Commerce Is Here to StayBy Karen Herrera | Mon, 05/23/2022 - 13:00
The practicality of e-commerce has been reflected in the new consumption habits of Mexicans. The tendency for users to make purchases from the comfort of their devices, with just a couple of clicks and, sometimes, without having to leave their favorite application, is constantly growing.
Just last year, e-commerce grew by 27 percent in Mexico, according to data from the Mexican Association of Online Sales (AMVO), and this year more people are expected to make their first purchase online or make this their favorite purchase method.
On the supply side, we observe that a wide variety of small businesses, department stores, retail chains or even luxury brands offer the possibility of buying their products online today, which means that e-commerce is a new purchase method that has come to stay.
Faced with the growth of online commerce, a parallel revolution has begun in payment methods. Currently, there are innovative methods that even allow people who do not have traditional financial products, such as credit or debit cards, to purchase products online and participate in the digital ecosystem. One of the most innovative methods is Buy Now, Pay Later (BNPL), which offers users the opportunity to purchase the products they need and to pay for them later in interest-free installments.
This "pay in the future" option allows users to purchase one or more products or services and to begin using these products or services and enjoying their benefits immediately. Customers pay in installments that allow them to better manage their finances. Additionally, making purchases through online stores makes it easier for each user to compare prices and choose from a greater array of options.
In the particular case of Mexico, the extraordinary growth of online consumption since 2020 has raised great expectations for the sector, causing the creation of more digital events with promotions and exclusive discounts. One of the most anticipated is "Hot Sale," which in recent years has become the most important online sales campaign in the country.
To understand the magnitude of the event, according to data from AMVO, 16 percent growth in users interested in buying during Hot Sale is expected in 2022, an increase compared to the 11.6 million buyers in 2021. If we look at the sectors that are most captivated by this offering, the segment of the population that shows the most interest in making purchases during this year's campaign is young adults. It is estimated that people between the ages of 25 and 44 will represent 67 percent of Hot Sale users in 2022.
The young population's proximity to technology products allows them to take advantage of all the benefits of the digital world first hand. This year, for the first time in its history, a technology company will be the official sponsor of the event. Throughout the duration of the campaign, Kueski Pay will become the main payment option for online purchases with discounts and exclusive promotions. This alliance will greatly benefit users, since millions of Mexicans will be able to make purchases without the need for cards and with the benefit of deferring payments bi-weekly without interest.
The collaboration aims to generate greater financial inclusion among users, by allowing millions of unbanked people to access consumer products without putting their finances at risk. This has two tangible benefits, the first, for consumers who will have access to products and services with promotions and discounts and with the possibility of paying bi-weekly; the second, for integrated businesses that will be able to obtain the benefits of reaching new users from any part of the country.
According to information from Hot Sale, some of the reasons why users decide to make their purchases online are the following: 60 percent mentioned that they find more promotions and discounts on the internet; 55 percent state that they can compare prices and variety on the internet before making the purchase; 49 percent say that they have better payment facilities (BNPL, months without interest, deferred payments); while 43 percent say that more benefits are offered, such as coupons or discounts. In other words, buyers are interested in taking advantage of the options that most benefit their personal finances, either through payment facilities or through promotions and discounts.
In this sense, it is evident that there is a need within the Mexican population and the unbanked sectors to take advantage of the tools that contribute the most to their economy and that allow them to access the type of benefits offered by online commerce, either through payment facilities or through promotions and discounts. Through its platform, Kueski has become a facilitator that fulfills the mission of promoting inclusion and financial education in the country.
In Mexico, the gradual recovery of the economy after the pandemic has required a great joint effort between the public and private sectors. Therefore, the generation of alliances that promote the digital economy and e-commerce will be key to recovery and reactivation, while allowing more users, previously marginalized from the traditional banking system, to have access to the benefits of buying online for the first time. Electronic commerce has arrived and it is here to stay.