E-Commerce the Key to SMB Growth and Expansion in Mexico

E-commerce has made an impact on Mexico’s foreign trade and the world, with sales expected to reach US$160 billion by 2025, representing an impressive 88% increase over 2020. Against this backdrop, companies must prepare for this growth and focus on consumer satisfaction, which is becoming increasingly demanding, with value placed on the timeliness and fulfillment of the agreed-upon delivery conditions.

The success of e-commerce in Mexico is partly due to its remarkable evolution in recent years. It offers increasingly favorable buy-sell conditions, increased reliability, various payment methods and tools, and regulations to improve the user experience. Technology and adapting it to changing consumer buying habits have played a crucial role in the e-commerce evolution.

According to the UPS MiPyMES, Challenges and logistical challenges study, 52% of micro, small, and medium-sized businesses (MSMBs) use e-commerce channels. Many also use social networks (78%) and marketplaces (76%) to expand their operations nationally and, in many cases, to international markets. The COVID-19 pandemic encouraged some companies to explore e-commerce to continue to sell (4%), while others joined this channel to respond to the trend at the time (15%).

There are several alternatives to selling online, and in the survey, managers preferred e-commerce platforms because of their ability to generate more exposure and dissemination to promote products, effectively offering detailed information about each item.

Through digital platforms, companies have been able to overcome geographic barriers and expand their reach beyond local borders. This business community is eager to explore new markets and increase revenue through international trade.

Social media is also valuable, offering significant potential to connect with overseas customers and increase global business visibility. 

And logistics plays a crucial role – it’s part of the strategy to attract  consumers who want their purchases in the shortest amount of time.

The managers of these companies are deeply involved in making decisions and often in operating logistics activity. They face challenges such as constant changes in packaging rules and long wait times at customs, but they consider the effort worthwhile once the company begins expanding in this area.

As for the production being exported, the study reveals that most companies export 20-30% of their output, demonstrating SMBs' potential for the Mexican economy.

The increase in exports has led to a rise in profits, especially in sales to North America, representing more than 25% of export revenue for 33% of the companies surveyed, further strengthening Mexico’s trade ties to this region.

However, 56% of SMBs still need to export, primarily because they are focused on the domestic market and must understand the exporting paperwork. Despite this, 21% plan to start exporting in the next 12 months, while 16% plan to begin within four to 12 months, and 6% plan to do so in one to three months.

There’s an excellent opportunity for businesses to join e-commerce and internationalize their operations. To achieve this, it’s essential to have an efficient logistics chain that enables you to maintain a thriving company without being affected by costs and activities that hinder shipping processes.

These last two years are just the beginning of e-commerce growth, and businesses looking to grow are focusing on this direction to take advantage of this trend.

UPS will continue to invest in these studies and develop solutions that help Mexican companies internationalize their businesses with a more efficient supply chain.

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