Mexican Net Dance

The true north of e-business success might point due south.
Magazine Contributor
4 min read

This story appears in the February 2001 issue of Entrepreneur. Subscribe »

Now that they've implemented U.S. e-commerce strategies, some netpreneurs are setting their sites south of the border. For good reason: Online transactions in Mexico are thriving. Consider the stats: In 2000, Mexico's e-commerce sales totaled $448 million; projections for 2003 are $2.5 billion. Further, Mexico's 20 million Net users will probably grow to 350 million over the next three years, and Internet traffic doubles every 100 days. According to Lourdes Sánchez de la Vega, director of AMECE, Mexico's e-commerce association, online transactions in Mexico are growing 400 percent annually.

Ysabel de la Rosa is a freelance writer in Madrid, Spain, who specializes in international business.

Where It's At

The state of e-commerce in Mexico is a lot different than here in the United States. For instance, it's important to note that the real growth is happening in B2B; the country's B2C sector is still developing. But the laws are different, too. According to Sam Logan of IonAmericas, an e-business resource for Latin America, Mexican law requires online merchants to send customers paper invoices and receipts, thus subjecting high-speed Net businesses to the postal service's time frame. And delivery logistics remain complex due to inadequate transportation and the many middlemen who've long been part of Mexico's supplier-to-consumer chain. Low credit card penetration poses another barrier-vendors must facilitate alternative forms of payment, such as c.o.d., debit cards and direct transfers. Those challenges, though, are probably temporary. Banks are developing alternate payment methods, and there are high hopes President Vicente Fox will support e-commerce-friendly legislation.

Getting Started

To tap into Mexico's e-commerce market, you'll need more than Spanish translations and currency-converting software. The climate in Mexico requires businesses to establish a local presence via alliances, partnerships or physical offices. Without a physical presence, explains Daniel Ordaz, an e-marketing expert in Monterrey, Mexico, "an Internet business would not only be unwelcome, but might even be boycotted." Case in point:, a site in San Francisco that develops Web sites for businesses and sells computer products to U.S. and Mexican Latinos. Liliana Miranda Townshend, 28-year-old co-founder and CEO, insists that opening a branch office in Guadalajara made all the difference. "There's no easy way to solve the currency conversion problem," she explains. "Our Mexico site must do business in pesos, and [to do that] we need a local Mexican bank." She and her husband and co-founder, Peter, 30, say they've seen enough success to warrant expansion into Brazil.

Given that Mexico is the United States' second-largest trading partner, with more than $170 billion dollars changing hands each year, expect e-commerce to play a vital role in business opportunities between the two countries.

The Whole e-Chilada

1. Determine which area of Mexico to target. Metropolitan areas, such as Monterrey or Mexico City, are probably your best bets.

2. Evaluate your product's potential. Currently, big sellers include PC hardware, music, books, travel and software. Office equipment and supplies, entertainment tickets, video games, jewelry and financial management services are predicted to be strong e-commerce candidates soon.

3. Decide how your e-commerce product will be delivered in Mexico.

4. Set up a local fax number in Mexico or a toll-free U.S. number to be used for customer service purposes. Says Daniel Ordaz, an e-marketing expert, "Most businesses [and consumers] in Mexico still communicate by fax. Be prepared to [support] online communications with offline technology."

5. Hire a translator and localization experts for site implementation.

6. Have Spanish-speaking customer service help on hand to respond to questions, back orders and shipping problems. market research on Mexico and Latin America business news covering the Americas United States Mexico Chamber of Commerce, which opened its own e-commerce portal in late 2000

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