CONSUMER PRODUCTS AND RETAIL E-SSENTIALS

A good time to export to Mexico

With a population of 129 million, and Latin America’s second largest economy, Mexico is an attractive market for major brands. And as we enter 2019, the nation looks more appealing than ever.

A revamped free trade pact, the United States-Mexico-Canada Agreement, or USMCA, was signed on 1st October 2018 replacing 1994’s NAFTA and is generally regarded as a good deal for Mexico. The country is also party to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) that came into effect in December 2018 and should significantly ease trade between Mexico, China and 10 other major economies in the Pacific Rim.

More generally, Mexico’s economy is set to grow somewhere between 2% and 2.6% this year and imported a record US$432 billion worth of goods in 2017, highlighting strong demand for quality goods. Mexico also has a new president in Andrés Manuel López Obrador (often referred to as ‘AMLO’) who, despite a populist left-wing campaign, is seen as a pragmatist when it comes to trade and who has promised to invest heavily in infrastructure projects.

So, what exactly is the size of the export opportunity to Mexico, and what standards will manufacturers and service providers need to comply with if they wish to enter the market?

Who is the Mexican consumer?

Mexico is an incredibly diverse country. Its capital, Mexico City, has a population of 21 million, making it the sixth largest in the world, and over 75% of Mexicans live in urban areas. The median age is 26, there are slightly more women than men and households are typically comprised of 4.2 people.

Over the past couple of decades, Mexican consumers have become wealthier and purchasing power has risen. This increasing affluence is allowing Mexicans to be more discerning in their purchases, resulting in a parallel rise in expectations of quality from brands and service. Online shopping is big business, with e-commerce giant Amazon turning over US$500m in sales in the country in 2017. 

According to the Organisation for Economic Co-operation and Development (OECD), the top five types of purchase are:

1. Food and non-alcoholic beverages 
2. Transport
3. Housing, water, electricity, gas and other fuels
4. Miscellaneous goods and services 
5. Furnishings, household equipment and routine maintenance of the home 

B2B and government opportunities

There also many opportunities for selling products to industry and government tenders in Mexico. The country’s aerospace sector employs 30,000 people directly, and Mexico is also among the world’s 10 largest car producers. Naturally, companies selling parts to these industries will access a rich and dynamic market. There are also large mineral extraction, oil and agricultural sectors, and the country is going through something of a construction boom. Around 60% of Mexico’s population is employed in the services sector, and its hi-tech and IT industries are experiencing rapid growth, with a number of tech clusters found in major cities.

The Mexican government is in the process of implementing a range of major infrastructure projects, too. New president AMLO has promised to build the country’s economy through major projects such as the modernisation of Mexico City’s international airport, new railway lines, nationwide internet coverage, the paving of rural roads, earthquake reconstruction and more. Again, companies who can provide support, training and goods related to these areas can expect to find many opportunities.

What are the challenges of exporting to Mexico?

While it is relatively easy to do business in Mexico, international companies should be aware of some of the challenges involved in entering the market. These include:

• The country’s sheer size, which presents distribution challenges
• Interest rates in Mexico’s banks remain relatively high, making affordable finance a potential issue for small- and medium-sized businesses
• Violence related to criminal groups continues to present security issues, especially in border areas such as Ciudad Juárez and Tijuana
• Compliance with Mexican product standards may present challenges for international businesses trying to enter the market

While some of these issues will be out of a company’s control, complying with Mexico’s standards regulations is not. For any business that wishes to enter Mexico, the first hurdle will be navigating the country’s mandatory standards. Let’s explore Mexico’s quality standards in more detail.

Product standards in Mexico: An overview

There are essentially three types of standards in Mexico, as follows:

• Official Mexican Standards (NOM): These are mandatory technical regulations which cover any products that could pose a risk to people, animals or the environment
• Mexican Standards (NMX): These are voluntary standards which establish minimum quality requirements for products or services
• Reference Standards (NRF): These are standards applied to goods or services that are not covered by other existing norms

Mexican standards are governed overall by the Comisión Nacional de Normalización (National Standardisation Commission), or CNN, which itself comprises a range of federal agencies, standards bodies, chambers and associations. Each of these proposes and develops standards for different kinds of products. There are also Comités Técnicos de Normalización (National Standardisation Technical Committees), or CTNs, who create standards for areas where no national standardisation body currently exists.

To prove that a product conforms with NOM, NMX or NRF standards, manufacturers or importers need to complete a product Conformity Assessment before commercialising the product in the market. This involves certification, verification, calibration and sampling and testing procedures, depending on the type of product being tested. To receive a NOM certificate, products must be certified by accredited certification body.

TÜV SÜD supports export to Mexico

Like any nation of its size, Mexico is home to a complex and ever-shifting regulatory landscape. For manufacturers and suppliers, for whom Mexico is likely only one amongst many target markets, navigating that landscape and staying on the right side of countless standards and regulations presents a significant challenge. That’s where the help of a technical service provider with extensive knowledge of local standards can be invaluable.

TÜV SÜD is accredited to conduct testing and certification for a wide range of industries and has a presence in countries around the world. We offer certification programs for NOM safety approval, NOM energy efficiency, IFTL wireless approval, among other services, as well as for management systems. We have a global network of laboratories under ILAC ISO 17025 accreditation and IECEE CB schemes, positioning us to test products for export to Mexico.

Our Global Market Access programs further support manufacturers and service providers from around the world to access Mexico’s market by walking them through the entire process of accreditation – ensuring complete compliance with all legislation. Our local experts stay up to date with all changes in standards in Mexico – to learn more download our e-book or contact us at gma.global@tuvsud.com.

With a fast-growing economy, new trade agreements with major markets and a young and ambitious population, Mexico is a major destination for businesses wishing to export a wide range of goods. And, once your products or services are accredited to national standards, there will be little stopping you from accessing these attractive opportunities.