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Industry Research Report on the Retail in Mexico.

Value Chain outline

The retail value chain in Mexico encompasses the various stages involved in bringing products from their origin to the final consumer. This process is complex and involves multiple actors and activities. Key steps in the value chain include product design and development, sourcing and procurement, production, logistics and distribution, marketing and sales, retail operations, and customer service and support. Understanding this chain is vital for businesses to identify growth opportunities and optimize their operations in the competitive Mexican market.

  • Identification and description of each step in the value chain

    • Product Design and Development: This initial phase involves conceptualizing, designing, and developing products based on market research and consumer needs. While not solely a retail function, retailers often provide valuable feedback to manufacturers based on consumer demand and trends.
    • Sourcing and Procurement: This step involves identifying and selecting suppliers for raw materials, components, or finished goods. Retailers engage in procurement activities to acquire the products they will sell. Building strong, reliable relationships with suppliers is crucial for ensuring consistent product availability and managing costs. Many large retail chains also act as their own importers and wholesalers.
    • Production: This stage focuses on the manufacturing or assembly of products. While retailers may not directly engage in large-scale production, they often work closely with manufacturers to ensure product quality and specifications are met.
    • Logistics and Distribution: This critical step involves the physical movement and storage of products. It includes transportation from manufacturers or suppliers to warehouses or distribution centers, inventory management within these facilities, and finally, the distribution to physical stores or direct delivery to customers (last-mile delivery). Efficient logistics are particularly important in a country like Mexico with varying infrastructure.
    • Marketing and Sales: This step focuses on promoting products and services to attract and engage consumers, ultimately leading to a purchase. Activities include various forms of advertising, promotional campaigns, pricing strategies, and the sales process itself, both in physical stores and online.
    • Retail Operations: This involves the day-to-day management of retail points of sale, which can be physical stores or online platforms. Activities include managing store layout and merchandising, managing inventory within the store, staffing, and ensuring a positive shopping experience for customers.

    • Customer Service and Support: This final stage focuses on providing assistance and support to customers throughout their shopping journey and after their purchase. This includes handling inquiries, processing transactions, managing returns and exchanges, and addressing customer concerns to build loyalty.

    • Identification and description of segments for each step of the value chain. The retail market in Mexico is segmented in various ways, primarily by the types of products sold and the channels through which they are distributed.

      • Segments by Product:

        • Food and Beverage and Tobacco Products
        • Personal and Household Care
        • Apparel, Footwear, and Accessories
        • Furniture, Toys, and Hobby
        • Industrial and Automotive
        • Electronic and Household Appliances
        • Other product categories.

      • Segments by Distribution Channel:

        • Hypermarkets
        • Supermarkets
        • Convenience Stores (including independents) and Gas Stations
        • Department Stores
        • Specialty Stores
        • Online Stores / E-commerce
        • Traditional Grocery Retailers
        • Warehouse Clubs
        • Food and Drinks Specialists
        • Drug Stores and Health & Beauty Stores
        • Home Improvement and Gardening Supplies Specialists
        • Direct Selling
        • Homeshopping
        • Vending

    • List of types of players in each segment Players within the Mexican retail value chain include:

      • Manufacturers
      • Wholesalers
      • Importers
      • Logistics and Transportation Providers
      • Retail Companies (operating various store formats and online platforms)
      • E-commerce Platforms
      • Technology Providers (for e-commerce, payments, operations)
      • Real Estate Developers and Owners (for physical retail spaces)

    • Detailed description of the main activities within each segment. Activities within the retail value chain segments vary depending on the specific segment. For instance:

      • In the Food and Beverage segment: Activities involve sourcing fresh produce, packaged goods, and potentially local specialties; managing cold chains for perishable items; distributing to grocery stores and supermarkets; and marketing through promotions and store displays.
      • In the E-commerce segment: Key activities include managing online platforms, digital marketing, order processing, inventory management across warehouses, and ensuring efficient last-mile delivery to customers' homes.
      • In the Hypermarket segment: Activities focus on managing large store formats offering a wide variety of products, including groceries, apparel, electronics, and more; optimizing store layout for customer traffic; managing extensive inventory; and offering services like banking or restaurants within the store.

  • Show estimates of volumes and sizes of each step in the value chain. Specific volume and size data for each step of the value chain (e.g., total volume of goods sourced, total transportation volume) are not consistently detailed across the provided sources. However, the overall market size and growth, which represent the culmination of these value chain activities, are provided:

    • The Mexico Retail Market was estimated at USD 94.16 billion in 2024.
    • Another source indicates a market size of USD 454.5 billion in 2024.
    • The market is projected to grow and reach USD 126.51 billion by 2030, with a CAGR exceeding 5% (2025-2030).
    • A different forecast estimates growth by USD 78.49 billion at a CAGR of 4.5% between 2023 and 2028.
    • The retail trade sector's GDP in Q4 2024 was MXN 3.37 trillion.
    • Online sales reached USD 74 billion in 2023, projected to be around USD 100 billion in 2024 and USD 176.8 billion by 2026.
    • E-commerce is expected to reach USD 70.4 billion by 2027.
    • Physical retail space saw significant growth in 2023, adding nearly 800,000 square meters of new shopping centers in major cities, with projections for another 330,000 square meters in 2024. Mini-locations, large stores, and megastores showed growth between 20% and 30% in 2023, while anchor stores and smaller spaces had more moderate growth (8% to 12%).

Value Chain Summary Table

Value Chain Step Main Activities Key Product Segments Covered Key Distribution Channel Segments Involved Examples of Key Players Estimated Volumes/Sizes (Overall Market & Relevant Segments)
Sourcing & Procurement Supplier identification, negotiation, purchasing, inventory management. All product segments (Food & Beverage, Apparel, Electronics, etc.) N/A (upstream activity) Retailers acting as importers/wholesalers (Walmart, Liverpool, Coppel, Chedraui) N/A (Specific volume for this step not available, but supports overall market size)
Logistics & Distribution Transportation, warehousing, inventory handling, customs, last-mile delivery. All product segments All distribution channels Logistics providers (DHL Supply Chain, Kiki Latam), Retailers with own logistics networks (Walmart, Mercado Libre, Amazon) Supported by overall market size and e-commerce growth. Supply chain issues are a challenge.
Retail Operations Store management (physical/online), merchandising, staffing, point-of-sale transactions. All product segments Hypermarkets, Supermarkets, Convenience Stores, Department Stores, Specialty Stores, Online Stores, Traditional Grocers, Warehouse Clubs, Specialists, etc. Walmart, Soriana, FEMSA (OXXO), Liverpool, Coppel, El Palacio de Hierro, Chedraui, Sears, Auchan, Superama, Mercado Libre, Amazon, Shein, Temu, AliExpress, Farmacias Similares, Home Depot, Sam's Club. Market size: ~$94.16 - $454.5 Billion (2024). GDP contribution: MXN 3.37 Trillion (Q4 2024). 2,514,611 economic units (2024). ANTAD member sales: MXN 1.6 Trillion (2024).
Marketing & Sales Product promotion, advertising, sales campaigns, customer engagement. All product segments All distribution channels (promotions tailored to channel) Retailers (internal marketing teams), Advertising agencies. Drives the sales volumes contributing to overall market size and segment growth (e.g., fashion segment's significant role).
Customer Service & Support Customer assistance, handling returns, post-purchase support. All product segments All distribution channels (support across physical and online) Retailers directly providing service Linked to customer satisfaction and retention, influencing overall sales and market dynamics.

Examples of Main Players

Here are examples of some of the most relevant players in the Mexican retail sector, with detailed profiles based on the provided information:

  • Walmart International (Walmart de México y Centroamérica): Walmart is the leading retailer in Mexico, operating various store formats to cater to different market segments. These formats include hypermarkets (Walmart Supercenters) offering a wide range of goods, supermarkets (Superama) often targeting higher-income consumers, and warehouse clubs (Sam's Club). Walmart de México is also a significant importer and wholesaler. They have been actively expanding their presence through new store openings and significant investments in e-commerce, aiming to become true omnichannel retailers. Their strong performance is notable given the fragmented nature of the Mexican market.

  • FEMSA Comercio SA (OXXO): FEMSA Comercio is a major participant in the Mexican retail market, primarily known for its extensive network of OXXO convenience stores. With over 13,000 locations, OXXO is the dominant player in the convenience store segment. FEMSA is also recognized as a large distributor, notably for Coca-Cola. Like other major retailers, FEMSA is investing in digital capabilities and offers services like home delivery through partnerships to adapt to changing consumer behaviors.

  • El Puerto de Liverpool: Liverpool is a prominent department store chain in Mexico and is considered a key player in the retail sector. They are one of the large retail chains that also act as importers and wholesalers. As a member of ANTAD, they contribute to the reported retail sales figures, with department stores showing a notable rise in sales in 2024.

  • Coppel SA de CV: Coppel is another significant retail company in Mexico, with department stores being their primary operational format. They are listed as a major player in the market.

  • Mercado Libre and Amazon: While not traditional brick-and-mortar retailers in the same vein as the others, Mercado Libre and Amazon are crucial players in the growing online retail segment in Mexico. Mercado Libre is highlighted as the most popular online retailer in the region. These platforms are driving the growth of e-commerce and influencing the strategies of traditional retailers who are increasingly adopting omnichannel approaches. Their market power and competitive practices in e-commerce have also been the subject of regulatory scrutiny.

Volumes and Sizes

The Mexican retail market is a substantial and growing sector, playing a significant role in the country's economy.

  • Overall Market Size: The estimated size of the Mexico Retail Market varies slightly depending on the source and the year of data. In 2024, estimates range from USD 94.16 billion to USD 454.5 billion.
  • Market Growth: The market is projected for continued growth. Forecasts suggest the market will reach USD 126.51 billion by 2030, growing at a CAGR exceeding 5% from 2025 to 2030. Another projection indicates a growth of USD 78.49 billion with a 4.5% CAGR between 2023 and 2028. The market is expected to reach USD 99.12 billion in 2025.
  • GDP Contribution: In the fourth quarter of 2024, the retail trade sector's contribution to the gross domestic product (GDP) was MXN 3.37 trillion, representing a 10.5% increase compared to the same period in the previous year.
  • Number of Economic Units: As of 2024, there were 2,514,611 economic units categorized under Retail Trade in Mexico. The states with the highest number of these units are Estado de México (396,325), Ciudad de México (207,183), and Puebla (178,716).
  • Total Income: Total income for the retail trade sector reached MXN 5.63 trillion in 2019.
  • ANTAD Member Sales: Retail sales among members of the National Association of Supermarkets and Department Stores (ANTAD) grew by 7.1% in 2024, reaching a total of MXN 1.6 trillion. General merchandise was the largest category, accounting for 46.6% of total sales, while supermarkets represented 35.2%. Supermarkets had the highest annual growth rate at 8.1%, and specialty stores saw an 8.3% increase in sales.
  • E-commerce Volumes: The online retail segment is experiencing rapid growth. Online sales in Mexico were USD 74 billion in 2023 and are projected to be around USD 100 billion in 2024, potentially reaching USD 176.8 billion by 2026. The e-commerce sector is anticipated to reach USD 70.4 billion by 2027.
  • Physical Retail Space Expansion: The physical retail market saw significant expansion in 2023, with nearly 800,000 square meters of new shopping centers added in major cities. An additional 330,000 square meters of retail space are projected for delivery in major cities in 2024, indicating continued confidence in the sector.
  • Workforce: The workforce in the Retail Trade sector in Q3 2024 was 16.6 million people.
  • Market Share Concentration: While the market is fragmented, a few major players hold significant market share. Walmart de México is the leader in retailing in Mexico, with a market share value more than double that of the second-largest player, FEMSA Comercio.

Current Bottlenecks and Challenges

The Mexican retail industry, despite its growth, faces several significant challenges that can impact the efficiency and profitability of the value chain:

  • Competition: The market is highly competitive, with intense rivalry among both large domestic players and international retailers. The increasing entry and influence of global e-commerce giants like Amazon, Shein, Temu, and AliExpress are particularly impacting the online retail space.
  • Logistical and Supply Chain Inefficiencies: Challenges in logistics and infrastructure, especially in rural areas, can lead to increased costs and potential disruptions in the supply chain. Ensuring efficient transportation, warehousing, and last-mile delivery remains a hurdle for retailers.
  • Inflation and Economic Conditions: While disposable income is rising for some, lingering inflationary pressures and overall economic conditions can impact consumer purchasing power and spending patterns, creating uncertainty in demand.
  • Fragmented Market: The continued relevance and significant share of traditional retailers and small independent establishments create a fragmented market landscape, which can make it challenging for larger players to achieve nationwide scalability and standardization.
  • Regulatory Complexities: Changes in government policies and regulations, such as those related to energy and competition, can create uncertainty and potential operational challenges for retailers.
  • Financing Access for SMEs: Small and medium-sized enterprises within the retail sector can face difficulties in obtaining financing at affordable rates, potentially hindering their growth and ability to compete.
  • Supply Chain Disruptions: Ongoing global supply chain issues, including frictions in sourcing components and high logistics costs, continue to impact the outlook for some Mexican companies.
  • Security Concerns: Crime can be a challenge for retail operations in certain regions of Mexico.
  • Intellectual Property Issues: The rise of certain e-commerce platforms has raised concerns about intellectual property infringement, particularly impacting designers and brands in the apparel sector.
  • Adapting to Evolving Consumer Preferences: Retailers need to continuously adapt to changing consumer demands, including the growing preference for omnichannel experiences, personalization, and sustainability.

References

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