MEXICO CITY — Amazon Fashion has launched in Mexico, but it faces major growth challenges in a country in which online sales lag sharply behind more developed markets such as the U.S., the U.K. and Brazil, and in which competition is intensifying.
The e-store, launched under Amazon.com.mx on July 28, will sell “millions of unique articles with a wide variety of sizes and colors,” according to the web giant, with free shipping and returns for “eligible articles.”
“Amazon’s clients will be able to find the perfect outfit, including accessories details, in just a few clicks,” category leader Gloria Canales said. “They can choose from a variety of delivery options and return items without charge if they don’t fit, which is very convenient inside the shopping experience.”
International labels available on the site include Calvin Klein, Lee and Desigual, as well as Mexican brands such as Adrianna Papell in women’s. Adidas and Perry Ellis will be stocked in men’s, while footwear brands such as Steve Madden, BCBG, Puma and Mexico’s Michel Domit will also be available.
Amazon.com.mx, which already sells 50 million products since online retail giant Amazon launched it last summer, will also market eyewear and accessories on Amazon Fashion, including styles from Ray-Ban and Tommy Hilfiger. As with Amazon Fashion in other markets, the site will offer fashion-trend lists, detailed product descriptions and customer reviews.
Amazon.com.mx’s spokesman Julio Gil declined to provide financial targets or detail the number of clothing items in stock in Mexico, the second Spanish-speaking country where Amazon has launched a specific fashion portal, after Spain.
The site is the only one in Latin America that operates a merchandise warehouse and distribution center, however. “Brazil sells mostly e-books. Mexico is the only store where we have physical merchandise,” said Gil.
Amazon Fashion comes as rivals Claroshop.com, Liverpool and Wal-Mart de Mexico are rushing to boost clothing sales, followed by smaller rivals such as Linio and Dafiti, as well as specialist chains like Zara and licensors like Axo.
While Gil declined to comment on competitors, a key differentiator for Amazon Fashion in Mexico will likely come from small designers and other clothing brands’ ability to sell through the portal.
“Businesses of all sizes can market and sell their products in Amazon.com.mx, and reach more clients around the country…retaining operating control and saving costs,” Amazon.com.mx said.
That is a major plus to some struggling designers in Mexico, where financing is still hard to come by despite government efforts to build a fashion industry.
“It sounds like a good opportunity,” said Andres Jimenez, the designer behind Mancandy, which sells “bold and edgy” androgynous apparel in Mexico and Japan. “I used to have online sales but took them out because it was very complicated and expensive.”
Mexicans remain wary of buying designer fashion online, because the shopping experience is not yet sophisticated enough to guarantee a good fit.
“It’s OK if you are looking for a basic T-shirt or trouser, but I know very few people who will buy a $300 blazer online,” said Jimenez.
Consumers’ hesitation — coupled with low credit availability — has kept e-tailing on the fringe in Mexico, where it accounts for just 2 percent of the $203 billion in annual retail sales, according to Euromonitor. In Brazil, that number hovers at 4 percent.
Internet payments remain difficult in a country that has only 23 million credit cards issued among a population of nearly 120 million, according to analysts.
Amid such difficulties, Amazon allows customers to buy prepaid cards at the 13,000-strong convenience-shop network Oxxo; Linio and Mercadolibre.com.mx also let customers pay that way, or through cash-on-receipt.
Others have gotten more creative.
Claroshop — owned by the Sanborns Group, which operates Sears de Mexico and Saks Fifth Avenue in Mexico — allows shoppers to pay through their Telmex telephone receipt. Owned by billionaire Carlos Slim, the Sanborns chain retails clothing and beauty and has 250 stores, while Sears has nearly 100.
“We have better shopping platforms and payment schemes, so customers want to shop online,” said Edgar Smolensky, Sears fashion division’s commercial and purchasing director. “We offer payment through the Telmex bill, our own stores, credit cards including American Express, PayPal, Oxxo and 7-Eleven.”
Sanborns offers the best of the online and traditional retailing.
“You can do ‘click and collect’ to pick up in our store without paying delivery,” he said, adding that customers can also do free in-store returns, though home delivery carries a charge.
“Amazon is not a retailer; it’s an e-tailer. You can’t pick up merchandise at their bodega [warehouse],” Smolensky noted. “I don’t see it as competition. I don’t think they came to Mexico to operate in the same proportion as in the U.S. Many Mexicans still prefer to shop on Amazon U.S., because they have a much wider selection not offered here.”
Despite an embryonic market, Mexican soft-line sales are rising online as retailers improve shopping through more appealing merchandise imagery and descriptions.
Liverpool, which operates more than 100 department stores catering to middle-class Mexicans, will invest $50 million to improve its online experience this year, according to Enrique Grinal, director of investor relations.
“We are going to improve the look and feel of our smartphone platform and add more photography and image standardization,” he said, adding that Liverpool will also incorporate tracking features for home deliveries that are free of charge, alongside returns.
Liverpool sells more than 100,000 apparel items on the Web, including brands such as Guess, Tommy Hilfiger and Banana Republic. Roughly 40 percent of purchases come from apparel, beauty and homeware, Grinal estimated.
He added that “click and collect” demand has surged to account for 35 percent of all online sales, representing 2.5 percent of Liverpool’s 43.4 billion peso, or $2.2 billion at current exchange, in first-half revenues.
The goal is to ramp up e-commerce to comprise 5 percent of turnover by 2020.
Smolensky said sales at Claroshop.com, which launched last November and which operates like a marketplace housing stores for Nine West, Philosophy and Anne Klein, is doing well. However, he said, the market’s operating environment must improve to allow e-commerce to reach its potential.
“We need more credit penetration, and for banks to start rejecting payments,” Smolensky said. “We need easier payment solutions and customer experience. Why do you think the U.K.’s e-commerce sales are at 30 percent? We still have a long way to go.”