How is Mexico’s cross-border e-commerce? Analysis of Mexico’s e-commerce market

Analysis of Mexico's cross-border e-commerce market

In recent years, Mexico’s cross-border e-commerce market has been hot. As an emerging blue ocean market, many cross-border e-commerce sellers and platforms have begun to pay attention to the huge potential of this market. Today, let’s take a look at the current situation of Mexico’s e-commerce market.

Overview of Mexico’s Economic Development

Mexico is the third largest economy in North America, with a total national GDP of US$1.29 trillion in 2021, ranking 16th in the world, and an annual economic growth rate of 5.4%. The per capita GDP is 10,000 US dollars, with an annual growth rate of 15%.

Affected by the COVID-19 pandemic and the economic recession in the United States, Mexico experienced its most severe economic recession since 1932. Starting in 2021, with the increase in vaccination rates, Mexico’s economy has gradually recovered, and its GDP growth rate has also turned from -8.2% in 2020 to 4.8%.

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• The scale of cross-border buyers in the United States continues to expand, and is expected to grow to 698 million by 2023!

Experts generally believe that the United States is the biggest influencing factor for Mexico’s future economic development. This can be seen from the trade data. The United States is Mexico’s largest trading partner. Therefore, the prospects for the development of the US economy play a decisive role in Mexico’s economic development.

Internet Penetration Rate in Mexico

In 2021, Mexico’s population reached 130 million, and the internet penetration rate was 75.6%, with as many as 99.45 million internet users in Mexico. In Mexico, social e-commerce has begun to occupy a place in the e-commerce industry. More than half of the country’s consumers have made purchases through social e-commerce, and one of the reasons driving social commerce purchases is that Mexican consumers are increasingly using social media platforms.

According to the “2021 Digital Report” produced by Hootsuite, the most commonly used social media platforms for consumption in Mexico are: Facebook, WhatsApp, TIKTOK, Instagram, and Twitter. Among them, there are about 93 million Facebook users in Mexico, ranking fifth in the world. Facebook is also the most commonly used social network for small businesses in Mexico and is the preferred choice for most e-commerce sellers.

Size of the E-commerce Market in Mexico

The total revenue for e-commerce in Mexico in 2021 was $23 billion. It is expected to grow at a compound annual growth rate of 6.5% in the next two years. By 2024, the size of the e-commerce market in Mexico will reach $21.8 billion, and the number of consumers will reach 73.7 million.

The top five platforms in terms of market share in the e-commerce market in Mexico are: Mercado Libre (15.4%), Amazon (13.2%), Walmart (9.6%), Liverpool (7.0%), and Coppel (6.8%). Compared with Amazon, Mercado Libre has significantly higher platform traffic and usage data on its Mexican site. Additionally, the commission rate on Mercado Libre is significantly lower than that of Amazon Mexico. In addition, in 2021, Shopee officially entered the Mexican market, bringing new sales platforms and more market opportunities for sellers.

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