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CATEGORY ARCHIVES: Business Opportunities in Mexico

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Business Opportunities in Mexico covers topics about some of the many ways American companies can take advantage of the growing Mexican consumer market.

Below is an excerpt from the sponsored special report “Delivering the Goods,” a feature in Internet Retailer Magazine covering technologies that can improve e-retailers’ fulfillment and delivery options. Internet Retailer is an objective provider of information regarding the market trends, technology, competitive practices and people that are shaping the e-commerce industry.

Christian Bruns Estafeta USA - A Smoother Road For Shipping to Mexico

Christian Bruns, CEO of Estafeta USA, a provider of freight, express shipping and parcel delivery services in Mexico.

With e-commerce sales in Mexico projected to reach $6.7 billion in 2019, up from $2.8 billion in 2014, according to Forrester Research Inc., Mexico can represent a potentially attractive sales opportunity for U.S. e-retailers. Many U.S. e-retailers, however, don’t ship south of the border because they consider the administrative, regulatory and logistical issues too big a headache to make it worthwhile.

Frequently cited speed bumps when shipping to Mexico include filling out the paperwork to clear customs, uneven delivery coverage across the country and regulations preventing packages from being left on doorsteps when consumers are not home.

“A lot of U.S. retailers don’t fully understand how to ship to Mexico, so they don’t do it,” says Christian Bruns, CEO of Estafeta USA, a provider of freight, express shipping and parcel delivery services in Mexico. “Consequently, Mexican consumers that want to buy products from U.S. retailers either can’t or have to make their own arrangements to have a purchase shipped to Mexico, which can be costly.”

E-retailers wanting to ship to Mexico can send an order placed by a Mexican consumer directly to Estafeta’s warehouse in Laredo, Texas. Once the order arrives at the Laredo facility, Estafeta clears the package through customs, prepays all duty  and delivery charges then delivers the item to the customer in Mexico.

Alternatively, if an e-retailer does not want to deal with customs, duty and delivery in Mexico, it can refer a customer to Estafeta’s website where she can open a pre-ship U.S. delivery address at Estafeta’s Laredo facility. Customers that have set up a pre-ship U.S. address provide it to the retailer at checkout. In this instance, the customer is responsible for paying all duty and delivery charges. Duty is typically paid upon receipt of the package.

Estafeta will deliver anywhere in Mexico through its nationwide delivery fleet of more 1,500 vehicles.

“It’s a simplified process that removes the barriers to shipping to Mexico for retailers in the U.S.,” Bruns says.

Customers not home at the time of delivery are left a notice of the delivery attempt. If the customer does not expect to be home during the next scheduled delivery, she can arrange to have the item delivered to one of Estafeta’s 1,150 branded retail stores where she can pick it up at her convenience. Estafeta reaches 98% of the Mexican population, giving it the broadest delivery network in Mexico, Bruns says.

“While there are U.S. parcel carriers that service Mexico, what sets Estafeta apart is that we offer a variety of delivery options for e-retailers to have their products shipped to Mexico and delivered anywhere in the country,” Bruns says. “We turn delivery to Mexico into a competitive advantage.”

Read the entire special report “Delivering the Goods.”

Ford Motor Company Logo 300x225 - Ford to Invest $2.5 Billion in Mexico OperationsMexico offers a wealth of business opportunities for companies in the United States. The country’s strategic location makes the market easily accessible, and free trade agreements (NAFTA) simplify the complexities that come with doing business in another country. Additionally, Mexico’s low cost of labor provides U.S. companies with a cost-effective way to manufacture and export goods.

Increasingly, companies within the United States are taking notice of the advantages presented by Mexico. One of the largest industry sectors currently moving into the market is the U.S. auto industry. Leading car manufacturers across the United States have been taking an interest in Mexico; last year, Honda and Mazda began production at plants in Mexico, and General Motors pledged to invest almost $700 million in their Mexico facilities. In 2014 alone, Nissan, Kia, and BMW pledged to invest $1 billion each to build auto-assembly plants in the country, and in April 2015 Toyota announced a $1 billion plant to be built in the central Mexican state of Guanajuato.

With the biggest car manufactures in the country moving their manufacturing operations south of the border, Mexico is on track to overtake Japan and Canada as the United States’ number one source of imported cars by the end of 2015. On Friday, Ford Motor Corporation joined the growing list of U.S. auto manufacturers moving in to Mexico, with the announcement of a $2.5 billion investment to build two new plants for developing fuel-efficient engines and transmissions in Chihuahua and Guanajuato, respectively.

“Ford is making a significant commitment to our business in Mexico with investment in two new facilities, while aiming to make our vehicles even more fuel-efficient with a new generation of engines and transmissions our team in Mexico will build,” Joe Hinrichs, Ford’s President of The Americas, said in a statement. “These new engines and transmissions will help deliver even better driving experiences and fuel economy gains for customers around the world.”

Ford will allocate $1.1 billion to the new engine facility, which is being built within Ford’s existing Chihuahua Engine Plant, an expansion which is projected to create 1,300 new jobs. Additionally, a $200 million investment, as well as the creation of 500 jobs, will be allocated to the expansion of Ford’s current I-4 and Diesel engines production in Chihuahua. The remaining $1.2 billion will go towards the building of a new transmission within the premises of transmission supplier and longtime partner Getrag, in the State of Guanajuato.

“Today’s announcement is an important milestone in Ford’s 90-year history in Mexico,” said Gabriel Lopez, Ford of Mexico’s president and CEO. “Currently within Ford, Mexico is the fourth vehicle producer, the fourth largest engine producer and is the second largest nation supplying Ford’s global manufacturing facilities. We look forward to delivering even more great products, including new engines and now transmissions, to serve Ford customers around the world.”

Estafeta USA offers several logistics solutions tailored to the auto industry which aims to increase the efficiency of the supply chain process. Contact a cross-border logistics consultant today to learn more about how Estafeta USA can tailor their logistics services to meet your manufacturing needs.

Iusacell - AT&T Buys Mexico Mobile Carrier Iusacell

AT&T, the second-largest U.S. mobile phone carrier, has completed its $2.5 billion acquisition of Mexican mobile operator Iusacell. The acquisition, which was announced in November, includes all of Iusacell’s wireless properties, including licenses, network assets, and retail stores, and will net AT&T a total of 8.6 million subscribers.

The deal, which comes on the heels of telecommunications reforms in the country, is part of AT&T’s overall plan to expand in to Latin America. Iusacell, Mexico’s third largest wireless operator in Mexico, offers wireless service under the Iusacell and Unefón brand names, a network which encompasses about 70% of Mexico’s approximately 120 million people. In November, AT&T announced its plan to expand this network further to include additional consumers and business of Mexico. Additionally, the acquisition will allow AT&T to create the first-ever North American Mobile Service area, covering over 400 million consumers and businesses between Mexico and the United States

The acquisition announcement follows a historic year for Mexico and the country’s economy: In 2014 Mexico President Peña Nieto signed in to law legislation which ended PEMEX’s monopoly on oil and set the stage for foreign investments; growth in agriculture, industry, and construction, coupled with a record-breaking auto industry propelled the economy forward in the third quarter. In January 2015 Gerardo Gutierrez Candiani, president of Mexico’s Business Coordinating Council (BCC) said that the business community expects the economy to grow 3.5 percent in 2015.

According to Randall Stephenson, AT&T chairman and CEO, the country’s economy was a direct factor in the decision to procure the mobile carrier.

“Our acquisition of Iusacell is a direct result of the reforms put in place by President Peña Nieto to encourage more competition and more investment in Mexico. Those reforms together with the country’s strong economic outlook, growing population and growing middle class make Mexico an attractive place to invest,” he said in a statement.

To see how your business can benefit from Mexico’s growing economy, contact a cross-border logistics consultant today.

For more news on the economic opportunities in Mexico, subscribe to our weekly newsletter The Mexico Business & Logistics Source

2014 Mexico Economy - Mexico 2014: A Year in Review The New Year marked the end of 2014, and the end of a successful year for the Mexican economy. Although the country’s growth forecast was cut several times over the year, historic energy legislation and a record-breaking auto industry prompted foreign investment and an overall positive outlook for 2015. Below is a brief summary of Mexico’s economic high points in 2014.


Oil and Gas Reforms Prompt Foreign Investment

In August, Mexico President Peña Nieto signed historic energy legislation into law. The legislation set the stage for foreign investment by ending Mexico-based oil producer PEMEX’s 75-year monopoly on oil production and allowing foreign firms to tap in to the country’s nearly 14-billion barrels of oil reserves.

Mexico Named ‘Rising Star’ in Manufacturing; Auto Industry Breaks Records

A report released in August from the Boston Consulting Group found that Mexico is one of the most cost-effective countries for conducting global manufacturing. The report, which designated Mexico a “rising star” in the realm of global manufacturing, also determined that Mexico provides cheaper manufacturing labor than China, and is estimated to have lower average manufacturing cost on a unit-cost basis than China.

Additionally, Mexico’s automotive manufacturing industry broke records in 2014; total vehicle manufacturing in 2014 reached 3 million units last year. In July 2014, Mexico was on-track to surpass Brazil as the top Latin American car producer, and was on-track to overcome Japan and Canada as the United Stat’s no. 1 source of imported cars by the end of 2015. The increased auto production opened the door for foreign investment; in February Honda opened its second plant in Mexico, and Mazda’s Salamanca, Mexico, plant began production in March. Additionally, exports from American giant General Motors more than doubled in May.

Economy Up in Third Quarter; 2015 Outlook Good

Although Mexico’s growth forecast was cut throughout the year, the economy gained momentum in the third quarter, due in a large part to growth in agriculture, industry and construction. According released in November 2014 by the National Institute of Statistics and Geography (INEGI), Mexico’s economy was growing at the fastest pace in almost 2 years at the end of the third quarter, an indication that the economy is continuing to recover. Additionally, the outlook for 2015 is positive: the Mexican business community estimates that the economy will grow 3.5 percent in 2015.

Ecommerce Sales on the Rise

According to a report released in November by BNA Americas, Mexico’s ecommerce sector is poised to become the fastest growing market for business-to-consumer sales in Latin America, reaching approximately $11 billion by the end of the year. Additionally, digital sales are expected to expand at a 17.6% compound annual growth rate by 2017.

Mexico Ranked 3rd among Latin American Economies in Ease of Doing Business

In October Mexico was named among the top five best countries for doing business in Latin America by the World Bank. The organization’s annual “Doing Business” series ranked Mexico 39th out of 189 in ease of doing business, a 4-point increase from the 2014 report. The rank also put the country in the top 5 Latin American economies, following Columbia (ranked 34) and Peru (35), and before Chile (41) and Panama (52). Additionally, Mexico was part of only one-third of countries to move up in rankings.

To see how your business can benefit from Mexico’s growing economy, contact a cross-border logistics consultant today.

For more news on the economic opportunities in Mexico, subscribe to our weekly newsletter The Mexico Business & Logistics Source

Ecommerce Sales in Mexico2 - Ecommerce on the Rise in Mexico

According to statistics released earlier this year, Mexico is poised to become the fastest-growing market for business-to-consumer ecommerce sales in Latin America.

Research conducted by independent research company eMarketer found that Mexico’s B2C ecommerce sales are expected to rise 20% in 2014, reaching a total of approximately $11.43 billion for the year. Additionally, digital sales are expected to expand at a 17.6% compound annual growth rate by 2017, increasing the total sales to $15.11 billion by the end of the period.

Mexico’s rapidly increasing ecommerce sales are due in a large part to the 10.4 million people, or about 21.3% of the internet user base, who will make a digital purchase this year, representing at 16.5% increase over 2013. According to data released by The Competitive Intelligence Unit (CIU), 71% of internet users had already made a digital purchase in April.

The growth of ecommerce and digital spending in Mexico represents a real opportunity for online retailers and U.S. companies with ecommerce websites to expand. Mexico’s strategic location to the United States, as well as limited trade laws due to NAFTA and the country’s expanding middle class, makes the Mexican consumer market ideal for expanding businesses. Additionally, Mexico’s rapidly growing ecommerce market remains largely untapped; U.S.-based ecommerce giant Amazon has limited options when it comes to shipping to Mexico, and EBay’s shipping policies depend wholly on the item seller. The untapped nature of the market, coupled with its rapid expansion, puts U.S. businesses in the unique position to dominate the Mexican ecommerce market, regardless of business size.

With digital buyer growth rates in Mexico set to expand in the next 2 years, and the number of web users poised to reach 78.2 million by 2017, U.S.-based companies which ship cross-border are poised to expand both their customer margins and profitability. Having an experienced logistics partner is key to getting your products across the border and to Mexican consumers. Estafeta USA provides comprehensive logistics services for U.S.-companies looking to ship items to Mexico, including pickup anywhere in the United States, customs assistance if required, warehousing and cross-border shipping, and door-to-door delivery anywhere in Mexico. Contact one of our cross-border logistics consultants today to see how Estafeta can help simplify the cross-border ecommerce process for your business.

For more news on the economic opportunities in Mexico, subscribe to our weekly newsletter The Mexico Business & Logistics Source

For any of our logistics services - LTL Shipping, Personal Imports or Express Parcel Delivery to Mexico - Call Estafeta USA Toll Free: 855-334-9150.