At Jana, we regularly travel to the countries where our mCent users live. These trips not only help us better understand how we can make mCent better for our users and customers, but they also help us understand the market itself. I recently returned from a trip to Mexico City in Mexico, one of our 15 emerging market countries. While there, I discovered a few new things about mobile connectivity, the app ecosystem, and eCommerce adoption in Mexico.
Mobile connectivity is fast and plentiful
Speedy 3G and 4G connections are mostly available across the country. On average, 4G users in Mexico can find an LTE signal 64% of the time and the 4G LTE signal is 21.73 Mbps. That’s 8.7 Mbps faster than the United States and 15.34 Mbps than LTE in India. Wifi is fairly widespread across the country, but it can be spotty. Unlike in Indonesia where 44% of users have a dual-SIM device, Mexican users often keep the same SIM card for an extended period of time and rarely change their phone numbers. This is because SIM cards are relatively expensive at $3 to $8 USD each. Based on research presented at the MMA Forum and users I spoke to, most people spend less than 300 pesos ($16 USD) on their cell phone bill each month, and most have a data plan through one of the three main telcos in the country—Telcel, Movistar, and AT&T. The largest telco in the country is Telcel, which dominates the market with 70% market share and 75M subscribers. Telcel is the most expensive of the three, but it has the largest network coverage and is operated by Carlos Slim’s powerful company América Móvil.
Mexico's app ecosystem is developing, but young
Unlike in other emerging markets like India and Indonesia, there are not many local app developers in Mexico. One of the local apps I did hear about over and over again was Rappi, an on-demand app that lets users order groceries, dinner, or any other item they wish and have it delivered on demand. Recently, UberEATS entered the market as a direct competitor to Rappi. Users I spoke to had varying opinions on which app they prefered, but they ultimately thought that more options were benificial. Many expressed a desire to see more local services like Rappi come to Mexico.
Mexican user habits mirror those of U.S. users
When it comes to users’ favorite apps, the regular suspects are very popular in Mexico; Facebook and WhatsApp. Almost everyone I saw using their phone in malls, restaurants, or just on the street was using WhatsApp. Youtube is also hugely popular in Brazil. Due to geographical proximity and similar mobile behaviors, the top used apps in Mexico are very similar to the favorites among users in the United States—more so than compared to Brazil and the rest of Latin America, where local apps are more common and popular.
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Mexico's eCommerce market resembles India
Latin America is one of the fastest growing eCommerce regions in the world, and Mexico is the second-largest country in LATAM in terms of eCommerce sales. Mexico currently accounts for 12.3% of LATAM’s $47.4B in eCommerce sales, while Brazil accounts for 42%. But, eCommerce represents a tiny fraction of the total retail sales in the country—just 2%. The biggest barrier to eCommerce growth is trust and credit card adoption. Among Mexico’s population of 119.5M, there are only 22.6M credit cards in circulation and 80% of consumers in Mexico still prefer to make purchases with cash. Just like in India, where credit card penetration is also low, alternative payment methods like cash-on-delivery and pre-paid gift cards are extremely popular in Mexico. Spanish online shopping app Mercado Libre created their own payment method, Mercado Pago, which gives users the option to digitally pay for mobile recharge, make online payments, and send money to friends and family in a safe way.
The future of mobile in Mexico: Final thoughts
Overall, I was surprised by how different Mexico is compared to Brazil. This goes to show that even within the same region, there can be vast differences in mobile infrastructure and behavior. Mexican users are relatively sophisticated and have access to high quality data networks. However, developers and other businesses haven’t yet figured out how to satisfy the local needs of this market. As Mexico continues to grow in terms of smartphone users and purchasing power, I expect to see more local apps developed, more global companies increasing their presence in the country, and a gradual shift towards eCommerce.
Want more insights on mobile trends in other LATAM countries, such as Brazil? Visit the Jana Index.