Direct Selling in Mexico

2021 DEVELOPMENTS

COVID-19 upends the direct selling business model

Beauty and personal care and apparel and footwear dominate direct selling value sales in Mexico, with consumer health accounting for most of the remainder. For most of the review period prior to the onset of the pandemic, direct selling constant value sales (2021 prices) had been in decline, with the growth of e-commerce the main driver of this.

Pandemic drives direct selling online

Since the onset of the pandemic, direct selling companies have paid much more attention to e-commerce. Prior to the pandemic, direct selling was mainly done face to face and usually indoors.

Consumer health fares relatively well

Although it also saw a decline in retail constant value sales since the onset of the pandemic, consumer health has been a relatively strong performer in direct selling. Companies that sell supplements and other health items, especially those that claim to boost the immune system, fared particularly well in the context of COVID-19.

PROSPECTS AND OPPORTUNITIES

Apparel and footwear will recover faster than beauty and personal care

Direct selling retail value sales will see no more than a modest recovery during the forecast period, with constant value sales remaining below their 2019 level until 2026. As local consumers become increasingly comfortable shopping online and the country’s e-commerce infrastructure continues to develop, e-commerce will continue to act as a drag on growth.

Lack of formal employment opportunities will continue to make direct selling an attractive career opportunity for many

Mexico’s relatively low rate of formal unemployment means that direct selling companies are unlikely to have any difficulty recruiting sales staff during the forecast period. In general, direct selling will remain popular among local consumers, who value the personal touch and customisation that it offers e.

The line between direct selling and e-commerce will blur

The ability of direct selling companies to combine traditional selling methods with the new innovations in e-commerce will be key for them to be successful in the future. While direct selling is not seen as being at the forefront of the omnichannel movement in Mexico, the ability of these companies to offer click-and-collect options and offer quick delivery will be important.