Discusses the distribution network within the country from how products enter to final destination, including reliability and condition of distribution mechanisms, major distribution centers, ports, etc.
Last Published: 10/17/2019

This section reviews several different factors in selecting and managing your distribution and sales in Mexico.

Retail

It is a challenging environment for retail sales, with the impact of a strong U.S. dollar, the proliferation of interest-free financing offers (meses sin intereses or MSI), mobile retailing, and continued company activity in the form of mergers, acquisitions, and expansions. Notwithstanding these challenges, the market grew by five percent in 2018. The retail channels with the highest growth rates during the year included internet retailing, convenience stores, and department stores.

A common practice in Mexico is to offer consumer financing in the form of interest-free layaway / MSI. Originally extended primarily by national retailers during special events such as the ‘Hot Sale’ and ‘el Buen Fin,’ the practice has become widespread among both local and international companies. Mexico has several large retail stores and chains including El Palacio de Hierro, Saks Fifth Avenue, Coppel, Grupo Comercial Chedraui, and Sears Roebuck de México.

Mexican retailers plan continued investments to build new stores and remodel others into 2019, supported by expectations that sales growth will remain above 2017 levels. Members of the retail association ANTAD, who operate 59,300 stores, plan to invest USD 3.25 billion this year, up from an estimated USD 3.1 billion in 2019. Close to 70 percent of the total will be invested in new stores and upgrades of existing ones, and the balance in logistics, technology and other areas.

Walmart de México leads retailing, with its share value more than twice as high as that of the second biggest player (FEMSA Comercio). Walmart’s performance was especially impressive given Mexico’s fragmented competitive environment, relevance of traditional sales, and small independent retailers.

Meanwhile, online shopping in Mexico is anticipated to more than double by 2022 to nearly USD 18 billion, with the major global eCommerce players moving into high gear following the 2016 recession. Key players vying for a bigger stake in this exciting eCommerce market are MercadoLibre, Amazon, Walmart, and Alibaba. The Argentina-based MercadoLibre is by far the most popular online retailer in the region, with operations in 18 markets. With more than 55 million unique visitors per month in 2017, it outpaced Amazon and Brazilian B2W. Still, MercadoLibre saw its market share plummet since 2012 as Amazon and Walmart surged. Amazon reported USD 253 million in sales in Mexico in 2017, more than double the previous year.

Importers and Wholesalers

Key retail chains are among the largest importers and wholesalers, including Walmart de México, Costco de México, El Puerto de Liverpool SAB de CV, El Palacio de Hierro, Sanborns de México SAB de CV, and Sears Roebuck de México. The official database of Mexican importers features approximately 3,200 import firms as of December 2017 (the most recent year for which figures are available).

Geographic Segmentation

Mexico is a large market to cover, whether for distribution or for sales channels. The U.S. Commercial Service in Mexico recommends that U.S. exporters consider splitting the country into distinct territories rather than trying to sign a single agent or distributor with exclusive national rights.

Logistics and Distribution Infrastructure

Mexico is a leading global logistics center, in large part based upon its 13 trade agreements with 50 countries. Shipping logistics work well in Mexico, though not without some concerns. The World Bank’s Logistics Performance Index for 2018 places Mexico in 51st place out of 160 countries in terms of logistics efficiency. Transportation–logistics services are expensive in Mexico, representing eight to 15 percent of product costs in Mexico, compared to five to seven percent in the United States. According to the Mexican Secretariat of Communications and Transportation (SCT), 60 percent of Mexican products for domestic consumption travel by land on trucks, 14 percent travel by train, and 26 percent are transported by ship.

The Mexican Government seeks to reduce transport costs across the economy to increase competitiveness and facilitate supply chains. To do so, Mexico is modernizing its national transportation network. The López Obrador Administration’s National Development Plan seeks to improve cargo transport infrastructure, particularly in Southern Mexico. This plan builds upon the prior Administration’s National Infrastructure Plan, which launched improvements to highways, railways, and ports. These infrastructure projects are described in further detail in our section on transportation infrastructure.

Currently, Mexican transport infrastructure includes:
  • Approximately 390,000 km of highways and roads
  • More than 26,700 km of railroads
  • A total of 64 international commercial airports; 1,424 airfields (including military and small private owned fields) and nearly 500 heliports
  • More than 100 seaports and intermodal terminals
  • Nearly 27,000 km of oil and gas pipelines

Logistics and Land Borders

The main land border crossings with the United States are Nuevo Laredo–Laredo, Ciudad Juarez–El Paso, Piedras Negras–Eagle Pass, Mexicali–Calexico, and Tijuana–San Diego. Tijuana is the busiest border crossing by volume of traffic; however, the Nuevo Laredo–Laredo border crossing is the largest by value, accounting for approximately 53 percent of all U.S.-Mexican trade in merchandise.

The Government of Mexico and some state governments are trying to promote other border crossings to decrease the concentration in Laredo and to offer options for expanding bilateral commercial traffic, such as Colombia, Nuevo Leon. At the federal level, the U.S. and Mexican Governments meet regularly in various working groups focused on the border to advance joint efforts increasing the capacity, efficiency, and speed of border crossings for people and goods. One result was the establishment of the Unified Customs Processing (UCP) program. The UCP brings together Mexican Customs (Aduanas) and U.S. Customs & Border Protection agents at the same location to jointly clear cargo. This has the potential to dramatically speed cargo inspections and increase border security. Despite this progress, as of June 2019, shippers have reported intermittent delays for truck and rail crossings as border personnel respond to a variety of priorities.

Highways

Sixty percent of goods are distributed by trucks. Mexico has a modern highway system, primarily comprising toll roads, connecting the main industrial areas located in the Mexico City–Guadalajara–Monterrey triangle. Outside this area, road transportation is more challenging.

Ports

The main maritime ports on the Gulf Coast of Mexico are Altamira, Tampico, Veracruz, and Progreso. On the Pacific Coast they are Ensenada, Guaymas, Lazaro Cardenas, Manzanillo, and Puerto Madero. All these ports have the infrastructure and equipment to facilitate intermodal, door-to-door merchandise transportation. The Government’s infrastructure program includes major projects to modernize and expand existing ports, including doubling capacity of the Port of Veracruz, improving existing multimodal corridors, connecting Gulf and Pacific ports, and linking production and consumer centers with NAFTA corridors.

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.