Mexico offers a large, dynamic market with plenty of opportunities for US businesses. And, both its consumer economy and eCommerce markets are steadily growing.
Despite some challenges, Mexico’s strategic location and its participation in USMCA (formerly NAFTA) make it an attractive destination for investment whether you’re looking to establish a brick-and-mortar presence or simply do business online.
This guide provides an overview of Mexico's business environment, Mexican Spanish translation, and tips on how US businesses can smoothly transition into this market. Understanding the economic landscape, consumer market and cultural nuances will help position your company for success in Mexico.
Economic Overview
Mexico’s economy presents a mix of opportunities and challenges. Its COVID-19 recovery was slow, but the country’s economy is back on track and expected to grow at a steady rate of over 2% annually until at least 2030.
Many businesses may feel uncertainty due to fears regarding Mexico’s political instability, corruption and cartels.
However, research indicates that these risks are unlikely to affect Mexico’s economic stability as it relates to foreign investment. It’s also important to note that despite Mexico’s economic risks, its macroeconomic stability remains in line with other LATAM nations, such as Brazil.
For US firms new to doing business abroad, Mexico’s close economic ties with the United States (in the form of the USMCA trade agreement) and its solid infrastructure make it an appealing market for growth.
Key Economic Facts
- Growing Economy: Mexico is the world’s 12th largest economy, and it’s forecast to become the world’s 5th largest economy by 2050.
- The US Top Trade Partner: In 2023, Mexico became the United States’ top trade partner with $798.83 billion in bilateral trade.
- GDP: Mexico's GDP growth is steady (expected at 2.2% in 2024), supported by strong manufacturing and export sectors.
- USMCA Benefits: The United States-Mexico-Canada Agreement (USMCA) replaced NAFTA in 2020. It facilitates mostly free trade between the US, Mexico and Canada, simplifying investment and commerce for businesses.
In-demand Products and Services
While the overall expansion rate of Mexico’s economy is not stellar, certain sectors are experiencing breakout growth. US businesses are well-positioned to take advantage of opportunities in the following industries.
Mexico’s Consumer Market
Mexico's consumer market is one of the largest in Latin America. It also has one of the fastest-growing middle-class populations in Latin America, which is expected to expand by another 3.8 million households by 2030.
Consumer spending is also on the rise, with a projected value of over $1.3 trillion in 2024. Mexican consumers are increasingly becoming convenience shoppers who are more comfortable shopping online.
- Mexico has a population of over 130 million people, with a significant proportion under the age of 30.
- Rapid urban growth in cities like Mexico City, Monterrey and Guadalajara is increasing economic productivity and consumer spending.
- Consumer Spending is expected to continue rising, particularly in eCommerce, technology and retail sectors.
- Mexico’s consumer market is projected to grow by 9% by 2030. That’s over 2x the US consumer market's projected growth rate and 3x that of France and the UK.
eCommerce Opportunities
Mexico’s eCommerce sector is experiencing rapid growth, accelerated by the COVID-19 pandemic. In fact, The US International Trade Administration has positioned it among the top five countries in the world for eCommerce growth.
Research has found that Mexican consumers are growing increasingly comfortable shopping online, especially for cosmetics, consumer electronics and toys. Though consumers are spending more online in all categories of consumer goods. This makes the Mexican eCommerce market particularly attractive for US-based brands.
- Mexico is the second largest eCommerce market in Latin America, behind Brazil.
- Mexico’s domestic eCommerce market grew by 23% from 2021-2022. Online sales are projected to increase substantially going forward.
- 70% of Mexican online shoppers make a purchase once per month and 40% buy once per week.
- The most popular payment methods for online purchases are international credit cards, debit cards, cash vouchers and digital wallets.
- Thanks to USMCA, US-based eCom brands can sell most goods to Mexican consumers tariff-free.
- Many US shipping companies also ship to Mexico.
Stepping Stone to Other Latin American Markets
Establishing a presence in Mexico provides a gateway to the broader Latin American market. While the rest of Latin America is not part of the USMCA free trade agreement, brands may find it easier to adapt their Spanish-language content and strategy to other Spanish-speaking LATAM nations.
- Mexico’s strategic location facilitates access to North, Central and South American markets.
- Although Mexico is not a member of South American common market Mercosur, its trade agreements with Mercosur countries can simplify market entry.
- Mexico’s strong transportation and logistics infrastructure supports regional trade.
Understanding Mexican Culture
Doing business south of the border requires understanding Mexico’s culture and the Spanish language. Only about 5% of Mexicans speak fluent English, and business in the country is conducted in Spanish.
Spanish translation and localization are critical for businesses to attract customers and partners. Mexican consumers prefer to interact with content in Spanish, making website translation and social media translation especially important for eCommerce success.
Mexican business culture emphasizes relationships and trust. Mexicans prefer in-person communication (or face-to-face via video) and are less direct than US businesspeople.
In Mexico, personal relationships are more important than numbers on a page, and trust plays a large role in decision-making. Mexican companies often make decisions based on their trust and confidence in the people involved. This can sometimes confuse US businesspeople who focus more on the bottom line than relationships.
US firms should prioritize building relationships with potential partners. This can take some time, as Mexicans do not like to rush this trust-building process. However, taking the time to develop a foundation of trust will pay off in long-term value.
Cultural Insights:
- Take it Slow: The Mexican work environment is slower and more relaxed than in the US.
- Show Up on Time: Despite the relaxed work atmosphere, punctuality is a sign of respect.
- Call to Confirm: Call or write to confirm the details of meetings or agreements multiple times. This shows that you’re interested and engaged.
- Speak the Language: You should not expect your Mexican business connections (or customers) to speak English. If you can’t have a conversation comfortably in Spanish, hire a Spanish interpreter.
Mexico is an Ideal Springboard to International Success
Mexico is a growing market with opportunities for US businesses in many sectors. Thanks to the USMCA, doing business in Mexico is largely free from the red tape and expenses that typically come with expanding abroad.
Another advantage of entering the Mexican market is that US businesses can fully own and operate their companies without a local partner. Business owners can also run their businesses without stepping foot in Mexico, making it easy even for small businesses and niche eCommerce shops to go global.
However, businesses of all sizes must understand the linguistic and cultural nuances of the regions they enter. Mexico is a large country with varying cultures, dialects and languages from Tijuana to Mexico City to Cancún. Spanish translation and localization are necessary to establish trust in Mexican markets and navigate challenges and opportunities to foster long-term growth.
Partnering with Wolfestone Group for your linguistic needs ensures that your business communications are clear, culturally appropriate and compliant with local regulations.
Wolfestone Group offers comprehensive linguistic services that cater specifically for US businesses aiming to succeed in the Mexican market, including:
- Translation and Localization
- Interpreting Services
- Multilingual Marketing and SEO
- Voice Over, Subtitling and Dubbing
- Accessibility Services
- Language Training
- Much More
Wolfestone Group’s industry-specific translators and project managers are trained not only to translate your documents but also to help your business succeed internationally. We have successfully helped many US businesses enter the Mexican market, and the post-COVID period presents a prime opportunity to capitalize on rapid growth.
The Mexican economy is poised to catapult to the world’s 5th largest economy in the coming years. Don’t wait to establish a foothold in this lucrative market.
Contact Wolfestone Group today to learn how our linguistic services can help your business thrive in Mexico.
