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eCommerce handbook 2017 - Mexican Market Insights


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20 Mexican and global insights that can help you draft your eCommerce plan

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eCommerce handbook 2017 - Mexican Market Insights

  1. 1. eCommerce handbook 2017 June, 2017
  2. 2. 1 2017 eCommerce handbook key takeaways eCommerce growth at 24% CAGR through 2020 global eCommerce sales worth U$1.9Tn in 2016 and will reach U$4Tn by 2020 19M eShoppers in Mexico, 73% aged 22-44 eCommerce in Mexico is worth U$16Tn and is growing at 46% CAGR Travel accounts for 54% of eCommerce in Mexico eCommerce will account for 15% of total retail sales by 2020 8% of eCommerce in Latam is rejected by fraud (vs. 4.8% Europe) 53% eShoppers globally by 2020
  3. 3. 2 Average yearly spend per person U$1,189 1.6 Billion people worldwide purchased products online in 2016 Total value U$1.9Tn People purchasing via eCommerce 1.6Bn Penetration of Internet user penetration 39% Mobile commerce Global eCommerce 22% Source: eMarketer, August 2016.
  4. 4. 3 Global eCommerce sales (US$ Bn, 2010 – 2020F) 24% CAGR % of Total Retail Sales Digital buyer penetration* 3.8% 4.4% 6.3% 8.7% 11.5% 14.6% 38.3% 42.3% 44.8% 47.3% 50.1% 52.6% $476 $768 $1,234 $1,915 $2,860 $4,058 2010 2012 2014 2016 2018F 2020F eCommerce sales, by region (2016) 57% 22% 16% 2% 1% Asia Pacific North America Europe Latam Middle East & Africa Impressive eCommerce growth worldwide Source: eMarketer, August 2016. Note: *as % of Total Internet users.
  5. 5. 4 US eCommerce sales, by category (2016, not including travel) 32% 19%16% 11% 8% 7% 4% 2% Other Apparel & accessoriesComputer & electronics Auto & Auto-parts Books, music & video Food & beverage Health & personal care Toys & hobbies US set to cross half a trillion USD in eCommerce sales by 2018 Source: eMarketer, February 2017. Note: *as % of Total US Internet users. US eCommerce sales (USD Bn, 2016) 8.2% of Total Retail Sales $389Bn 77% Digital buyer penetration* 14% CAGR 2008-2020F
  6. 6. 5 B2B eCommerce is expected to reach U$1.1Tn by 2020 in the US Source: Forrester, April 2015. 88% of executives purchase business products online 93% want to see peer reviews 92% want to view product in action before purchase While purchasing products online, business executives are looking for: 24% 33%33% 41%43%47%51% Corporate Websites Salespeople Trade Publications Conferences Distributors Word of Month Social Media Executives locate the business products and services they need through:
  7. 7. 65 eCommerce in Latam reached $37Bn USD in 2017 Source: eMarketer, September 2016. Latam eCommerce sales, share by country (2016, % of total sales) 6% 9% 14%12% 17% 42% Argentina Mexico Brazil Colombia Chile ROLA
  8. 8. 7 eShoppers GDP Population Internet Users Smartphone Users MM % of Int. users $USD Bn MM MM MM Mexico 19 29% $1,144 127 65 53 Brazil 41 34% $1,775 208 120 64 Argentina 12 40% $583 43 30 16 Colombia 9 31% $292 48 29 19 ROLA 48 47% $1,254 164 103 47 Total Latam 129 37% $5,048 591 347 199 Latin America reached 129M eShoppers, 37% penetration Source: eMarketer, November 2016. The World Bank, 2016. eMarketer, August 2016. AMIPCI, “Estudio sobre los hábitos de los usuarios de Internet en México 2016”, 2016. eMarketer, September 2016. eMarketer, April 2016.
  9. 9. 8 $1.8 $2.9 $4.4 $6.5 $9.5 $12.1 $16.1 2009 2010 2011 2012 2013 2014 2015 Mexico eCommerce sales (USD Bn, 2009-2015) Mexico eCommerce sales by category (USD Bn, 2009-2015) 0.1% 0.4% 0.5% 0.8% 1.0% 1.2% 16.4% 18.3% 23.0% 28.4% 31.3% 32.3% % of Total Retail Sales Digital buyer penetration* 54% 46% Travel Not travel 46% CAGR The Mexican eCommerce industry is growing at 46% per year Travel includes leisure and unmanaged business travel sales booked via any device. Source: AMIPCI, “Estudio Comercio Electrónico en México 2016”, December 2016. Note: *as % of Total Mexican Internet users. eCommerce sales figures converted from MXN to USD using the yearly FX average. vs. 73%in 2011 - -
  10. 10. 98 4% 8% 12%12% 16%16% 18% 20%20% 22% 24% 28% 42% 12345678910111213 Online product purchase by category, not including travel (2016, % of affirmative answers) Apparel & accessories Sports & wellness Computers Digital downloads Electronics Furniture Jewelry & watches Video games Books & magazines Office supplies Event tickets Music & movies Travel Equip. Mexicans are purchasing a wide variety of products, content & services Source: AMIPCI, “Estudio Comercio Electrónico en México 2016, December 2016.
  11. 11. 10 eCommerce transactions vary by device in Mexico Desktop SmartphoneTabletRank Banking transactions eMagazines & eBooks Taxi Airplane tickets Videos / Movies Music Hotel reservations Entertainment tickets Food delivery Groceries and home appliances Music eMagazines & eBooks Clothing Food delivery Entertainment tickets Source: IAB, “Estudio de Consumo de Medio y Dispositivos entre Internautas Mexicanos”, 8th edition, March 2016.
  12. 12. 1110 Research online & purchase offline (% of respondents) 24%24% 28% 35% 43%45% 34%36% 21% 43% 18%19% Research online & purchase online Research online & purchase offline Online is a core driver for online and offline commerce Source: Google’s Consumer Barometer, 2014-2015; A.T. Kearney analysis. Note: Numbers do not add up to 100 because results are derived from a variety of samples.
  13. 13. 1211 46% female 54%male 19MMexican online shoppers 87% urban 73% aged 22-44 Most eShoppers are 22 to 44 years old and seek price Source: AMIPCI, “12º Estudio sobre los Hábitos de los Usuarios de Internet en México 2016”. PWC Total Retail Survey (2016, ATKearney eCommerce Mexico 2016). Key demographic for the Mexican online shopper (Millions of people, % share) 12% 19% 23% 45% 50% 69% 77% Devices used to go online (percentage of respondents, 2016) Smartphones Laptops Desktop computers Tablets Smarts TVs Videogame consoles Other mobile devices
  14. 14. 13 Online & offline payment methods used by digital buyers (percentage of respondents, 2016) PayPal Debit card Personal credit card Bank transfer Commercial credit card Mercado Pago Prepaid card Gift card Referenced bank transfer 12% 14% 16% 16% 17% 27% 51% 56% 62% 9% 10% 10% 22% 30%Oxxo Bank deposit 7-Eleven Pay on delivery Pharmacy Online Offline PayPal is the prefered online payment method for Mexicans Source: AMIPCI, “Estudio Comercio Electrónico en México 2016, December 2016. Main influencer for buying online (% of respondents) 36% 58% 48% 32% 16% 10% Mexico USA Convenience Price Other
  15. 15. 1413 There is a wide variety of eCommerce platforms Top eCommerce platforms (cloud-based commerce platforms designed for small and medium-sized businesses) Top eCommerce gateways (service provider that authorizes credit-card or direct payments processing) Source: SWS research, February 2017.
  16. 16. 15 Online fraud is still higher in Latam vs. the world Chargeback index on invoiced order volume Rejected orders Latam 1.4% 8.0% USA & Canada - 2.8% Europe 0.8% 4.8% Mexico 1.9% 14.3% Brazil 1.5% 4.6% Argentina 0.8% 8.2% Colombia 1.9% 10.1% Source: CyberSource, 2016. RSA Security, 2016. Top merchant categories affected by fraud (2016) 46% 16% 13% 9% 5% 11% Airlines Money transfer Computer electronics General Retail Clothing Other
  17. 17. 1616 Accelerators Barriers Weakening Mexican Peso Wider banking and credit card adoption Greater smartphone/data plan affordability Suburb growth and high levels of commuting Investment by leading multi-nationals Business model innovation Lack of clear cost advantages for online shopping Lack of supply chain and back-end development Lack of logistics infrastructure Cost of developing eCommerce platform Cultural preferences to pay in cash vs. Source: A.T. Kearney, Kantar Retail Analysis. Mexico has clear accelerators and barriers to be addressed
  18. 18. 17 Shop Gateways CRM Market Places Control + Visualization Online Promotion Logistics Tools needed to launch an eCommerce business in Mexico Source: SWS Research, April 2017.
  19. 19. 18 Mexico´s tech ecosystem has seen the rise of 100´s of startups Source: SWS Research, April 2017.
  20. 20. 1917 Cyber November Consumers spent US$400 Bn Nov 16’ (100Bn more than 15’), hence the entire Christmas season will kick off early November every year. Real-time customization Just as search results differ from one person to the next, 2017 will see the emergence of an online shopping experience that is unique to each consumer. Data-as-a-Service Retailers are working with data aggregators to compile data on products: pictures, descriptions, price comparisons, specifications and comments. Artificial Intelligence 2017 will be the year where consumers will have their first interaction with Chatbots. These will become as common as automated phone systems, only much more interactive and interesting. Shipping “Uber-ization” Smaller stores, local drop-off points and same-day delivery. In 2017, many consumers will receive their first same-day delivery, whether at home, or at a drop-off point of their choosing. Predictive Analysis By exploiting the amount of Big Data collected through customer interactions and profiles, merchants can use predictive analysis to better understand purchasing habits, preferences, and, even their next purchases. Unified Commerce Instead of adding a digital storefront to the in-store infrastructure, merchants will instead integrate their stores (physical or digital) into a centralized infrastructure. Disintermediation Buyers want to interact directly with brands and retailers are being cut out of the equation. Automated processes and CRMs are used more than ever to maintain relationships and to simplify the ordering process. Global tech eCommerce trends to follow in 2017 Source: Absolunet, “10 eCommerce trends for 2017”.
  21. 21. 2018 8 tech events to attend in 2017 Source: SWS Research, March 2017. Premier event for the eCommerce industry, with over 800 retailers and 400 companies attending. Boston, MA 14 July IRCE brings together eCommerce industry leaders from the largest online retailers. Chicago, IL 6-9 June JulJunApr May DecNovOctSepAug Programmatic marketing summit. Scottsdale, AZ 31st May Immersive event bringing together commerce and creativity to explore trends, opportunities and disruptions. Montreal, Canada 24-26 May Design professionals from all over the world gather for the premiere design conference. San Francisco, CA 29 August Premier event for the eCommerce industry, with over 800 retailers and 400 companies attending. London, UK 25-26 October The definitive conference on conversion rate optimization since 2010. Las Vegas, NV 19-20 April 20182017
  22. 22. Main Sources Juan Saldívar Paula Velasco Ari Davidoff José Vázquez (Design) Credits SWS is a hands-on consulting firm specialized in disruptive and results-oriented strategy. Our client list includes global players and local industry leaders in search for solid future positions that embrace the powerful benefits the connected world can offer. Focused on both the US Latino and Mexican markets, our strengths comprise proven expertise in the telecom, media, marketing and digital space. Rise Capital is a global investment firm that focuses on making expansion-stage investments in Internet businesses in Emerging Markets. We back industry-leading businesses run by world-class entrepreneurs who attack large addressable market opportunities. Leveraging our experience as Emerging Market Internet operators and investors, we strategically guide these businesses to scale. | |
  23. 23. This presentation has been prepared by “JSW Servicios de Estrategia SC”. (SWS) and/or its affiliates or subsidiaries for the exclusive use of the party to whom SWS delivers this presentation to. This presentation was developed internally using public data. SWS has not independently verified the information contained herein, nor does SWS make any representation or warranty of that, either express or implied, as to the accuracy, completeness and reliability of the information contained in this presentation. Any estimates or projections as to events that may occur in the future (including projections of revenue, expenses, net income, and stock performance) are based on the best judgment of SWS gathered from publicly available information from of the date of this presentation. There is no guarantee that any of these estimates or projections will be achieved. Actual results may vary from the projections and such variations may be material. Nothing contained herein is, or shall be relied upon as, a promise or representation as to the past or future. SWS expressly disclaims any and all liability relating or resulting from the use of the presentation. Any opinions expressed in this material are subject to change without notice and may differ or be contrary to opinions expressed by other business areas or groups of SWS as a result of using different assumptions and criteria. The opinions expressed in this material are subject to change without notice and may differ or contradict the opinions expressed by other business areas or groups of SWS as a result of using different assumptions and criteria. SWS has no obligation to keep the information contained herein. This presentation has been prepared solely for informational purposes and should not be construed as solicitation or an offer to buy or sell securities or related financial instruments Legal Disclaimer