STORY INLINE POST
Q: How is RITMO strategizing for growth in Latin America?
A: Mexico is our primary market in Latin America but we plan to expand our business to Brazil and Chile. We also plan to keep our headquarters in Mexico despite launching the company in the EU. We chose Mexico because of the language and the massive growth of e-commerce companies.
Our market penetration strategy is divided into two parts. The first is growing through partnerships with companies like Kueski and e-commerce platforms, to which we will provide our financing services and cash-flow solutions. The other strategy is to capitalize on our local team, which is composed of experts in e-commerce that help our clients identify the capital and solutions to boost their businesses.
Beyond capital, we provide a broad range of solutions, from helping clients manage payments to providing assistance and guidance through our e-commerce success management team. We have built a network of over 48 partners in Mexico, selected because they provide added value, to distribute our solutions.
Q: What challenges did RITMO face to enter Mexico?
A: At first, the main challenge was customizing our solution to meet each country’s needs. The company started in the EU and, while we had operations in Mexico from an early stage, we had to investigate the market thoroughly. Before launching into Mexico, we had to understand its market distribution drivers and learn how to scale and diversify our solution in different ways, such as generating the infrastructure for loans and local payment integration. Finally, we had to identify the available e-commerce solutions that could work with ours.
Most of the e-commerce in Mexico happens on marketplaces, which was a major reason for us to enter this sector.
Q: Why did RITMO decide to support entrepreneurial e-commerce? What was missing in this sector?
A: E-commerce companies do not have real fixed assets and one of the main challenges they face is a limited cash flow. In Mexico, SMEs do not have access to financing despite their accelerated growth.
The main challenge entrepreneurs face is maintaining cash flow when growth accelerates. Many e-commerce businesses fail because they have no access to financing and there are cash traps for those who cannot keep up with the demand. We provide businesses with the financing to keep up with the growing demands of e-commerce and provide them the tools to manage and scale cash flow.
Businesses always require a customized solution for their specific needs. In Mexico, promotional events like the Hot Sale require large inventories and investment in advertisement which puts e-commerce companies under a lot of pressure.
Q: How do events such as the Hot Sale benefit emerging businesses?
A: During these e-commerce promotional events, businesses have the opportunity to get their product in the hands of many clients. The events, Hot Sale specifically, help newer e-commerce companies attract new users. Nowadays, there are a lot of e-commerce businesses and platforms, so events like this are useful to increase visibility and expand the business.
However, to enjoy all the perks businesses must be prepared to cover the demand. Companies need to have the inventory and the capital and invest in marketing before the event. Big brands invest a great deal of capital to make noise, so SMEs need to do the same to avoid being overlooked.
Q: What are the main challenges of an e-commerce-friendly platform at a time when the logistics sector faces a crisis regarding maritime containers and limited air routes?
A: Since the pandemic, transportation challenges have increased dramatically. Costs are up and that directly impacts the bottom line of e-commerce companies. Together with inflation, higher costs have generated a larger problem that requires even greater preparation. Companies should be on top of their inventory and planning ahead.
Mexico is a manufacturing hub and e-commerce companies should look for local producers. Manufacturers should work together because the supply chain crisis will not ease overnight. Essentially, we are urging our clients to manage their supply chain through a professional and to look for local producers. While it will take time to make these changes, it will help them diversify risks. Planification is essential and here is where RITMO can help. We can help companies access capital to buy twice the amount of product they initially planned.
Mexico is better positioned than the EU right now because of the Russia-Ukraine crisis. New possibilities are opening up but companies need to be prepared and have a plan.
Ritmo’s all-in-one financial solution to enable e-commerce to pay bills, manage invoices and get access to flexible funding, making it easier for e-commerce entrepreneurs to spend time on building incredible businesses.