E-commerce, B2B Take the SpotlightBy Sofía Hanna | Thu, 07/15/2021 - 14:19
This week, PayPal released a commerce report indicating how Mexican customers spend online. Meanwhile, companies are starting to increase their B2B spending as a result of the pandemic. The Vice President and General Manager for GCS American Express Mexico shared the top 10 things every SMB should know. Finally, BBVA Research released their migration and remittances 2021 yearbook, sharing information on the status of Mexico and what could come.
Interested in more? Here are the week’s major headlines in Finance!
- Finding lower prices in international marketplaces is the main driver for 49 percent of online shoppers. In the most recent PayPal’s 2021 Borderless Commerce Report, Nationwide reported that 65 percent of digital shoppers made at least one purchase abroad, while 83 percent did so via mobile phone during 2020. In addition, more than 60 percent of digital shoppers plan to further increase their online shopping during the 2021-2022 period. “This positioned Mexico as the second largest e-commerce market in Latin America, after Brazil, and as a country with high potential in cross-border mobile commerce.” Finally, location plays a crucial role, with the US being the top country of choice for 66 percent of Mexicans looking to buy abroad, followed by China with 44 percent and Spain with 13 percent. The categories most frequently purchased are fashion with 42 percent, electronics with 23 percent and cosmetics with 20 percent.
- During 2Q2021, companies in Mexico expect their B2B spending to be 1.1 percent higher than the same period last year, equating to an estimated recovery of US$1.87 billion for this category. Despite investment in areas focused on business growth and operations, spending categories focused on pandemic control and prevention still hold a place in companies’ wallets in Mexico. Companies’ spending on taxes and licenses and raw or processed materials like lumber, metals, and chemicals had the highest growth overall business spending categories, increasing by an average of 5.1 percent and 4.1 percent respectively in 1Q2021 compared to the same period last year. Spending on technology, which includes infrastructure, software and hardware, increased 7.7 percent between 4Q2020 and 1Q2021, reflecting an upward trend. “Mexican companies still have considerable focus and concerns about how the pandemic will unfold in the coming months,” Jorge De Lara, Vice President and General Manager of Global Commercial Services for American Express Mexico and Latin America, said in a statement.
- Jorge de Lara, Vice President and General Manager for GCS American Express Mexico and Latin America and an MBN Expert, shared the 10 things every SMB should know about financing. His list includes: macroeconomic perspective, age of the company, terms of financing, credit history, the objective of financing, cost of financing, liquidity recovery periods, payment capability, industry risk and level of digital adoption. With SMBs representing 52 percent of the country’s GDP and generating 70 percent of formal employment, according to the INEGI, their success is an integral part in the growth of the economy and the development of Mexican communities in general.
- BBVA Research released its “Yearbook of Migration and Remittances Mexico 2021” report, which shows how the COVID-19 pandemic affected migration across the globe, hurting, in turn, several labor markets. Globally, the migrant population in 2020 reached 280.6 million people, but the COVID-19 pandemic affected migration trends. The pandemic also led several countries to sharply reduce the number of issued visas. Migration is directly linked to remittances. In April 2020, the World Bank estimated that global remittances would fall 19.9 percent in 2020 but estimates made in May 2021 point out that the contraction was significantly smaller: only 2.4 percent. However, Mexico has become increasingly dependent on remittances. The states most dependent on remittances are: Michoacan, Guerrero, Oaxaca, Zacatecas and Nayarit.