Mexico’s Antitrust Regulator Says eCommerce Market Needs ‘Corrective Measures’

Mexico’s antitrust regulator Cofece has reportedly recommended that the government order Amazon and Mercado Libre to take “corrective measures” to ensure competition in the eCommerce market.

These measures would include giving service providers greater transparency and separating streaming services from marketplace membership, and doing so within six months, Reuters reported Tuesday (Feb. 13), citing a preliminary report released in the official gazette.

That recommendation comes after Cofece found that Amazon and Mercado Libre control a combined 85% of eCommerce transactions and sales in Mexico, placing “possible barriers” to competition in that sector, according to the report.

Cofece added that the current situation limits the entry of new competitors and blocks the expansion of existing, smaller players, the report said.

Barriers for small eCommerce retailers in this market include the high cost of technology, inventories and advertising, per the report. These retailers are also confronted with the challenge that buyers and sellers tend to stick with a single marketplace, and smaller retailers lack the numbers needed to compete with the two eCommerce giants.

Amazon entered Mexico in 2013 and launched a marketplace in the country in 2015, according to the report. Mercado Libre entered Mexico in 1999 and has been adding to its existing range of financial services.

PYMNTS Intelligence has found that 58% of shoppers in Mexico are “Digital Mainstream shoppers” who are drawn to digital features that give them more insight into the items they buy and make that shopping process easier.

Those digital features include mobile-optimized apps, product reviews and free shipping, according to the “2023 Global Digital Shopping Index: Global Edition,” a PYMNTS Intelligence and Cybersource collaboration.

In a recent development in this market, Amazon Mexico partnered with Kueski, a provider of buy now, pay later (BNPL) and personal loans in Latin America, in January.

With this collaboration, Amazon shoppers in Mexico will be able to choose the BNPL offering Kueski Pay as a payment option, helping to meet the growing demand for flexible payment options. This option is now available to select Amazon customers in the country and will be expanded to more in the coming months.