Read for 5 minutes
Small and medium enterprises (SMEs) have been a driving force behind the fight against the pandemic. The Study on Online Sales for SMEs 2021 was prepared in cooperation with GS1 Mexico by the Mexican Online Sales Association. These companies saw a 100 percent increase in their digital sales in the first half. They expect that online sales will account for 35% of their total sales by year’s end.
” In order to detonate strategies and initiatives to promote electronic commerce within Small and Medium-Sized Companies, the AMVO/GS1 Mexico undertook to develop the Study on online sales in SMEs 2021. This shows that there has been a steady increase in the number of SMEs that sell online. “ Pierre Blaise is the general director at AMVO.
Selling online enabled seven of 10 small businesses to be digitally competitive, while was the only income source for 34% of them during the epidemic. Three out of four SMEs believe that selling online enabled them to reach people they didn’t think were possible.
“In today’s new normal, SMEs are selling their products via a combination of digital and physical channels -stores and showrooms, point of sale, and/or internet pages. This allows them to focus on the needs of their customers and create memorable shopping experiences,” says Juan Carlos Molina General Director at GS1 Mexico.
These companies represent 42 percent of those that have sold online in the past 2-5 years. 48% started to sell online after the outbreak of the pandemic. 2 of 10 claim they have launched their digital channels during 2021.
Concerning the characteristics of SMEs it is clear that 58% are online sellers and 42% don’t sell via the digital channel. The majority of those who sell online are located in Central Mexico and the Valley of Mexico and are primarily involved with the food- and beverage industry (42%). 44% have 1-5 employees, 38% between 5 and 30 workers, 18% are more than 30, and 38% between 30 to 40.
It is clear that digital channels have a high concentration of commerce that is directed at the end consumer. 61% adhere to B2C (Business to Consumer) models.
91% of SMEs sell via various channels including the Internet. 39% of its total revenue comes from large retailers or distributors. E-commerce and social networking sales make up 21% of their overall income.
Social networks (85%) are used by SMEs selling online. Next, their websites (72%), and marketplaces (72%) follow. Amazon (54%), which is a multi-category site, and Mercado Libre (73%).
Marketing tools and logistics
The study reveals that 77% have their own warehouses and 38% have their transport. 70% follow a logistic model which includes sending your product via courier or parcel service. However, these are restricted to short distances.
They face many logistical problems , including high shipping costs (56%) and shipping damage (36%).
They highlight three main strategies that they employ to increase their online presence: they focus on starting or strengthening their online sales (53%), keeping their online presence current (52%) and strengthening their online sales channel (46%).
The traditional strategies that focus on strengthening the online presence are, however, to diversify providers (39%), optimize operational processes (38%), and improve logistics strategy (36%).
Advertising is a key focus for 69% of those surveyed. 54% rely on a Facebook official page, while 69% trust an Instagram official page. 48% rely on an Instagram official account.
The study also highlights the fact that SMEs without a web presence used to be able to begin with social media networks as their first steps. 43% of respondents consider these to be very simple to use. Online exports (29%), selling via virtual events (28%), and last-mile applications (29%) were the easiest channels to implement.
Word of mouth is the best traditional marketing channel. It has 53 percent of all advertising revenue.
Free delivery (61%) is the most popular promotional tool for SMEs, followed closely by seasonal discounts (36%). Currently, bank deposit (64%), and electronic bank transfers (63%) are the most popular payment options.
68% believe they have the necessary preparations to sell online. They do agree that it is important to continue training, particularly in areas such as electronic commerce, negotiation and KPI generation.
SMEs who do not sell online cite ignorance as the primary reason for not exploring the channel. However, 74% of respondents indicate their desire to explore the digital channels during the remaining 2021.
Download the executive summary here .
Publiated at Wed 25 August 2021 23.15:21 +0000