Amazon top dog in Mexico
According to a Euromonitor report, Amazon has made huge strides in Mexico in 2017. The report says that Amazon’s online revenues grew $502 million in the country – that’s up 106%, year on year! Although these figures represent a projection, and are therefore subject to adjustment, there is little doubt that Amazon is now Ecommerce top dog in Mexico, having overtaken previous market leader MercadoLibre, which is expected to have brought home $490 million in revenue, while Walmart de Mexico is projected to have hit revenues of $259 million.
Ecommerce is still in its nascent phase in Mexico – online retail only accounts for 3.5% of the overall retail market in the country. As the Ecommerce market grows with a compound annual growth rate of 25%, reaching 15 billion by 2019, Amazon will have to fight to maintain its market-leading position. But based on the way it attained it, there’s every possibility it could stay on top.
The company introduced its “Prime” scheme in Mexico last March. Amazon Prime is notoriously effective at dragging people into its ecosystem. Amongst other benefits, it offers free shipping, access to Amazon’s streaming video and music platforms, and discounts on a variety of goods. This is a compelling product that other players in the Ecommerce space have found impossible to disrupt, from Germany to the U.S.
A second masterstroke by Amazon was integrating cash payments into its Mexico operation. As of 2017, cash payments were preferred by a massive 80% of consumers. Amazon offered those Ecommerce-shy potential customers the ability to pre-pay at service stations and elsewhere, topping up their amazon account and providing a low barrier to entry onto its platform.
Dominion holds Amazon in its Global Trends Ecommerce Fund.
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