Despite lackluster economic projections at the start of 2020, consumers in Mexico initially shared a collective sense of optimism about the year ahead. However, the pandemic changed that.
On February 28, Mexico became the second country in Latin America to confirm its first case of the coronavirus—and months later, the number of new daily cases continues to grow. As of June 25, nearly 200,000 people in the country had tested positive for COVID-19, according to Johns Hopkins University. Mexico also has the region’s highest mortality rate proportional to the number of confirmed cases, at 12.4%. That’s 2.7 times Latin America's regional average of 4.6%.
Additionally, the International Monetary Fund (IMF) forecast a 6.6% contraction for Mexico’s GDP in 2020. This is the most severe economic downturn in Mexico’s recent history when compared with the 2008–2009 global financial crisis (a 5.3% decline) and the Mexican Peso Crisis of 1995 (a 6.3% decline).
However, one online shopping holiday is helping to revitalize Mexico’s battered economy.
Hot Sale, an online shopping holiday promoted by the Asociación Mexicana de Venta Online (AMVO), is driving ecommerce sales in Mexico through the use of discounts and promotions. Since its launch in 2014, Hot Sale has become one of the most important shopping days in the country, after Christmas and El Buen Fin (or "The Good Weekend")—an annual shopping event that occurs the weekend before Mexican Revolution Day, which is observed on the third Monday of November.
Despite the country’s bleak economic outlook and rising number of new COVID-19 infections, AMVO managed to hold its most successful Hot Sale yet, taking place from May 22 to June 1. Business-to-consumer (B2C) ecommerce sales surged 81.9% year over year, from $575.8 million (MXN11.08 billion) to $1.05 billion (MXN20.16 billion), according to official figures released last week.
"These historic results would be impossible without the vital support of those consumers who clicked to reactivate the country's economy, thereby also preserving the jobs of thousands of people who are part of Mexico’s digital ecosystem,” said Pierre Blaise, CEO of AMVO.
Ecommerce in Mexico has undergone significant double-digit growth in recent years, and the coronavirus has given rise to an even faster acceleration of ecommerce than previously expected. We now expect retail ecommerce sales to grow 20.9% by year-end, up from our previous estimate of 18.0%.
As consumer spending habits shift online in response to this “new normal,” we forecast that 2.2 million consumers in Mexico will be first-time digital buyers this year. That will equate to 22.6 million people, or roughly one-quarter of the population ages 14 and older who will make at least one online purchase.
The implications of the pandemic are far-reaching and signal a watershed moment for ecommerce in Mexico. Retailers that did not value the importance of ecommerce are now finding it to be their only saving grace from financial ruin. Conversely, consumers who were once skeptical of making a digital purchase are now experiencing the inherent advantages of being able to buy something with the click of a button.
Even amid an uncertain future, one thing is certain: Consumers’ broader embrace of ecommerce will be one of the most notable behavioral changes to remain in a post-COVID-19 world.
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