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22 Feb, 2009

The B2C Electronic commerce for the Mexican Companies: Viable opportunity?

For: 100 Business In: Business for Internet


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The target of this article is to define if profitable opportunities exist in the B2C electronic commerce (electronic business between companies and consumers) on the Mexican market.

In Mexico, the phenomenon of the computer technologies and of communications initiated 40 years ago. Nevertheless, only at the end of the setentas, it initiates a culture for his use and educational, managerial and social application. (Andrade, 2005)

In the managerial aspect, his approach consists of the sale of products or services of electronic form. The electronic commerce (electronic commerce) is not new, nevertheless a tool has turned costeable thanks to the opening of the Internet like mass communication media and the decrease in the prices of the computers, what allows any person about the world to have access to public information. (Daley, 2006)

Basically three types of electronic commerce exist: B2B (electronic commerce between companies, like the solutions that IBM provides organizations for his business), C2C (buy and sale of products or services straight between individuals, as Ebay.com or MercadoLibre.com) and B2C (I trade between companies to consumers, like the case of Walmart.com, Amazon.com, Sanborns.com)

To use the Internet to create a B2C (Business to Consumer) is very similar to the way of producing a company traditionally. (Belew, 2006) It is necessary to realize a business plan, to determine the viability, profitability, analysis of markets, opportunities and competition, between other studies. The principal differences between a "virtual" business and a "real" business it consists of the fact that users of Internet are the market, other web sites are the competition and the geographical opportunities are global, not only places.

Some changes that differentiate the B2C of the regular business are: they need of a major approach in the consumer and to determine clearly the segment of market and the capacity of buy of the niche of market; the changes in the environment are more dramatic and rapid, being that the opening than the competition is bigger, and the tastes and preferences of the consumer can change the tendencies completely; the use of technologies of information as the CRM (Customer Relationship Management) or ERP (Enterprise Resource Planning) at a basic, average or advanced level is fundamental for the success; the communication with the client is made difficult, and the use of several languages can represent complications; it is necessary to stay informed about the changes in the technologies intranet or extranet, and to be able to introduce appropriately processes or systems. (Belew, 2006)

The B2C in Mexico scarcely is in growth, to comparison of other countries like the United States, where the sales in line ($ 230 trillion dollars) represent 10 % of the entire sales of the business. In spite of having sales of only $ 955 million dollars, 4.5 % in comparison to the sales in the United States, the growth in only one year (2006-2007) of the B2C in Mexico was 78 %.

Also, according to the AMIPCI (Mexican Association of Internet), 69 % of the sales for Internet in Mexico consists of plane tickets. Only 10 % of the market represents sales of tangible products like electronic, clothes, accessories for the hearth, etc.

This situation of low sales for electronic means, to comparison of other countries, and sales centralized in products monopolized (like the air sector), indicate the need to study the variables of the Mexican consumers for Internet.

According to Andrade (2005), a clear backlog exists in Mexico, as regards the use of the available technological hardware, due to the absence of access to the Internet services. The numbers of the ITU (International Telecommunication Union) rel="nofollow""" this declaration. Although Mexico is provided with the same number of users as Canada (24 million users in Canada against 23.8 millions in Mexico in 2007), and that it is the 2nd one. country with more users after Brazil in Latin America, the Internet users quantity for every 100 inhabitants is minimal. In this aspect, Canada has 73, Brazil 35, and Mexico 22.

This information shows that only 22 persons of every 100 have access to the Internet, demonstrating the scarce use of Internet in comparison to other nations. Another number that rel="nofollow"""s Andrade's affirmation is the cost of the access to Internet. As to the WRI (World Resources Institute), every 20 hours of access to the Internet, the cost in the United States is 1 % of the average revenue, against Mexico that 15 % presents for revenue. Therefore, the cost of the Internet, requisite to open the access of the electronic commerce, is high in Mexico.

The characteristics of the Net users are another point of considering. Of the number of Mexicans who have access to Internet, 46 % is students, 58 % has from 18 to 24 years and 39 % has a socioeconomic level ABC + (High place to Way). As regards his behavior in Internet, 86 % uses a searcher (Google, principally) and 58 % uses commonly the chat rooms. As regards the availability of a credit card like form of payment, 14 % of the Mexican entire population is provided with credit cards, and of these 43 % avoids to use it but for emergencies (KMR Group, 2005); another limitante is that the banks demand a minimal age of 18 years and need that the user verifies fixed income.

The characteristics, the behavior and the forms of payment, they indicate young consumers with a social end of the Internet, without possibility of realizing payments across credit cards.

Kenney, Curry and Contreras (2002) go so far as even to think that the area of major potential and growth in the electronic commerce in Mexico there are the B2B and not the B2C. The relation between the reward / risk is much better when they look for commercial relations with other companies, against the case to look individual consumers.

Of another side of the users, the managers of companies are. Koontz (2008) points out that it exists in the organizations, a resistance to the computer application. While a student is ready to sail along Internet with facility, there are still managers who have phobia to the computers. In a survey of the magazine Forbes, 50 % of the managers of the 500 most important companies was not using the computer.

So that not only there is a technological backlog of the consumers, but also on the part of the managers, and his incapability to adapt itself to the changes of the Information technologies.

Out of the Internet branch, opportunities exist in the application of other technologies. In 2008, 50 % of the Mexicans is provided with a cell phone. Of these, 89 % would be ready to receive messages advertizing SMS if a saving was generating them. This opportunity presents other strategies different from the creation of web sites, focuses more in the technologies use like way of coming to a major market.

Conclusions

It is clear that the situation in Mexico to establish an electronic commerce Business-to-Consumer is difficult and needs of a deep study of profitable niches of market and of viable strategies of communication and sale.

A Mexican company will have major opportunities to be successful with a solution B2C, if it focuses his strategy on world and multilinguistic markets, especially in countries with a high grade of electronic buys of goods or services changed like the United States, where the buy for Internet is something common, and the consumer has the confidence of buying and waiting for the mailing of the acquired product.

In case of carrying out a business B2C in Mexico, the use of the Internet by the Mexican companies must be focused in providing information of his products or services to rel="nofollow""" the decision of a future buy on the part of the consumer, in the physical facilities of the company, considering the difficulty of doing payments for Internet and of the technological delay of the client to carry out electronic deals.

Finally, big opportunities are, with regard to the marketing, on the Mexican market, with the use of technologies of information focused in mobile technologies, principally the cell phone.

Article for: Antonio Ceballos

Bibliographical references

Andrade B. Lucía. (2005) technological Illiteracy: effect of the technologies of information. Network Countable Actuality Faces. [in line] p. 15. Available in:

http://0-site.ebrary.com.millenium.itesm.mx/lib/uvirtualeducacionsp/docDetail.action?docID=10090890&p00=Analfabetismo+tecnol%C3%B3gico [] February 2009, 16

Mexican Association of Internet. (2007) I Study of users' Habits the Internet 2007. [in line] Available in:

http://www.amipci.org.mx/estudios/temp/EstudioAmipci2007UsuariosdeInternetenMexicoyUsodeNuevasTecnologias-0774881001231460148OB.pdf

[] February 2009, 16

Mexican Association of Internet. (2008) I Study AMIPCI of Electronic commerce in Mexico 2008. [in line] Available in:

http://www.amipci.org.mx/estudios/temp/Estudio_AMIPCI_comercio_electronico_2008_pdf-0824573001220380781OB.pdf [] February 2009, 16

Mexican Association of Internet. (2008) I Study AMIPCI of new technologies of Internet in Mexico 2008 [in line] Available in:

http://www.amipci.org.mx/estudios/temp/EstudioAMIPCInuevastecnologiasdeInternetenMexico2008RESUMENEJECUTIVO-0170012001210946955OB.pdf [] February 2009, 16

Belew, Shannon., Elad, Joel. (2006) Starting an Online Business All-in-One Desk Reference For Dummies. EU: Wiley Publishing

Daley, Bill. (2006) Computers plow your future. EU: Pearson Prentice Hall.

International Internet Communication Union (2007) indicators: subscribers, users and broadband subscribers. [in line] Available in:

http://www.itu.int/ITU-D/icteye/Reporting/ShowReportFrame.aspx?ReportName=/WTI/InformationTechnologyPublic&RP_intYear=2007&RP_intLanguageID=1 [] February 2009, 16

Kenney, M., Curry, J., Contreras, O. (2002) The Internet and Electronic commerce Development in Mexico. UCAIS Berkeley Roundtable on the International Economy. [in line] Available in:

http:// brie.berkeley.edu/publications/wp144.pdf [] February 2009, 16

KMR Group (2005) Barometer of Global Consumption TGI Not 3: Credit cards. [in line] Available in:

http://www.cim.org.mx/2007/docs/mresearch/Barometro%20TGI%20release%20Mex0304.pdf [] February 2009, 16

Koontz, H., Weihrich, H., Cannice, M. (2008) Administration: a global and managerial perspective. The USA: McGraw-Hill

World Resources Institute (2001) Communications and tomorrow's markets. [in line] Available in:

http://www.wri.org/publication/content/8123 [] February 2009, 16

Topic: electronic commerce Mexico

4 Responses to "The B2C Electronic commerce for the Mexican Companies: Viable opportunity?"

1 | Bitacoras.com

February 22nd, 2009 at 7:35 pm

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2 | Nacho Garate

February 25th, 2009 at 3:24 am

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3 | Edwin (1000 Ideas)

June 24th, 2009 at 8:15 pm

Incarnation

Congratulations for this so finished analysis. I think that one of the principal obstacles in the business advance B2B in our Latin countries is the absence of virtual culture as well as the absence of confidence of the persons in the electronic means of payment. I think that the education in the topic is fundamental so that in the next years, our young people could with a transformed mentality be actors (both businessmen and consumers) in a web economy.

Greetings!

4 | Kouba

August 23rd, 2009 at 4:24 am

Incarnation

Plow you to professional journalist? You write very well.

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