Enjoy a 15% discount on all purchases until the 31st of March 2023 using the promo code EOFWEB22 at check out!

Retail Channels Our experts provide analysis on the retail industry, featuring insights from a local to global level on where and how consumers will shop across both traditional and emerging retail channels.

Three Interesting Initiatives by Amazon in Mexico

Euromonitor International Profile Picture
Euromonitor International Bio

Amazon made headlines in Latin America in October 2017 when it announced a more complete launch of retail operations in Brazil (the company previously sold only Kindles and books). The expansion in Brazil is not the only notable move the company has made in the region in 2017, however. Amazon has continued to invest in and adjust its strategy in Mexico. Euromonitor highlights three noteworthy initiatives by Amazon in Mexico from the second half of 2017.

Amazon introduces Amazon Cash in Mexico

Besides the expansion in Brazil, the launch of Amazon Cash in Mexico was the other big headline for the company in Latin America in October. With Amazon Cash, consumers can load their Amazon accounts with credit by paying in cash at brick-and-mortar locations throughout Mexico, such as at 7-Eleven convenience stores. This move is designed to make Amazon more accessible to the large percentage of Mexican consumers that don’t have access to a credit or debit card, or have access but are apprehensive about the security of online payments. To illustrate the role of cash in Mexico, over 80% of consumer payment transactions in 2016 were made with cash.

While the announcement of Amazon Cash for Mexico garnered lots of buzz in Mexico and abroad, Amazon Cash has some shortcomings. While paying in an offline context for an e-commerce purchase is a novel idea in the US, this is already a very common practice in Mexico. Most leading e-commerce players in Mexico offer four to six methods of payment, including options such as paying at a pharmacy or convenience store after the purchase, paying in-person at a retailer’s store or kiosk, and retailers that offer store-issued finance (such as Liverpool’s highly successful credit and store card programs). By contrast, until Amazon Mexico launched Amazon Cash, the company accepted only credit and debit cards in Mexico. Further, Amazon Cash requires shoppers to pre-pay for their purchases; comparable offline payment schemes by other players allow consumers to make the purchase first, requiring less planning by consumers. Amazon Cash also caps top-up transactions at Mx$5,000 (about US$263). While Amazon Mexico has been working to grow FMCG categories, electronics, appliances, and video games account remain important categories for the company. A $263 limit will make it challenging to purchase high-value items using Amazon Cash.

Launch of Amazon Handmade

Amazon added Handmade, Amazon’s marketplace for artisan-made items such as jewelry, party supplies, home décor, and apparel and accessories, to Amazon.com.mx on October 15, 2017. Handmade launched on Amazon US in 2015 and the company has gradually expanded the products available through Handmade since then. Handmade is widely viewed as a way for Amazon to compete with Etsy, a dedicated artisanal craft marketplace, in the US. Unlike in the US, there is not a major e-commerce craft platform in Mexico; while MercadoLibre has been investing in bringing small and medium enterprises to the platform, some of which specialize in artisanal products, the vast majority of artisanal item purchases are made offline, frequently in informal or semi-formal contexts. This makes Amazon one of the early leaders of purchases of artisanal products online in Mexico. While most artisanal purchases will continue to be done offline, Handmade provides a new option for Mexican consumers, in particular for buying gifts and seasonal products such as holiday merchandise, and represents Amazon’s efforts to increase category coverage in Mexico.

Amazon Mexico promotes the ability to support local Mexican businesses as a key reason for shoppers to buy from Handmade in Mexico. This helps counter a perception that Amazon is a risk to small and medium businesses. Handmade’s launch is also timely because 2017 saw Mexican consumers making an effort to consume more Mexico-made products in light of caustic political rhetoric about Mexico from its largest international trading partner, the US. Since Mexican sellers already participate in Handmade in the US, Amazon Mexico should be able to quickly scale the number of local products available.

Greater emphasis on FMCG categories

In contrast to Amazon’s launch in Brazil where the company has expanded only into electronics and select video game products, Amazon’s 2015 launch into Mexico featured a variety of categories. Despite this, categories like electronics and media products that lead internet retailing sales in Mexico overall have been some of the most featured on Amazon Mexico since its launch. 2017 however brought a noticeable increase in emphasis lower-cost household staples that consumers in Mexico have not traditionally flocked to buy online. Pet care, beauty, home care, and baby products have seen much greater publicity on Amazon Mexico’s webpage, and have seen the range of products increase correspondingly throughout the year.

When Amazon launched in Mexico, its electronics-heavy product mix put it in most direct competition with MercadoLibre. The growing emphasis on FMCG categories that consumers purchase more frequently than they buy a new laptop or smartphone means that Amazon is competing increasingly directly against others, including Walmart Mexico in particular. As with artisanal products, the vast majority of sales of household staples continue to be purchases in-person at brick and mortar locations. Nonetheless, actual sales of these products online are expected to grow much more rapidly than store-based sales over the next five years, and retailers in Mexico should note the challenges players in the US who fell behind in e-commerce sales now face.

Interested in more insights? Subscribe to our content

Latest Insights

Loyalty and the New Normal

Nadejda Popova 16 March 2023

Four Ways Tech is Transforming Social Media

Rabia Yasmeen 14 March 2023

Euromonitor to speak at Shoptalk Europe 2023

Euromonitor International 13 March 2023

Mastering E-Commerce Growth: How to Win Online Amid Uncertainty

Euromonitor International 09 March 2023

New Retail Summit

Euromonitor International 07 March 2023

Shop Our Reports

New Concepts in Retail

Retailers are pushing the boundaries of innovation. Euromonitor International’s annual New Concepts in Retail report highlights how these efforts are reshaping…

View Report

Global Inflation Tracker: Q1 2023

This report examines inflation levels and drivers globally and in key countries. In 2023, global inflation is expected to ease from its peak in 2022, but…

View Report

Top Five Digital Consumer Trends in 2023

Now in its seventh edition, this report explores the top digital shopper trends that will redefine commerce the most in the year ahead. Some of the trends…

View Report
Passport Our premier global market research database with detailed data and analysis on industries, companies, economies and consumers. Track existing and future opportunities to support critical decision-making across all functions within your organisation Learn More