IMPACT REPORT
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The COVID-19 pandemic accelerated Mexico’s digital transformation, shortening the adoption of technology and supporting services from years to months. This has propelled the country’s emerging startup, fintech and e-commerce industries while afflicting others such as commercial real estate, which is distressed from the emergence and popularity of digital work models. Having bypassed a slow induction period, digital companies have enjoyed accelerated growth in parallel to a digital transformation that is expected to be further augmented by growing internet penetration in the region. Overall, the digital transformation has placed an implicit market shift in favor of digital companies as their convenience is increasingly exploited by consumers. Within Mexico’s self-virtuous startup ecosystem, fintech companies have emerged to disrupt a stagnant financial services economy for the benefit of consumers. Although this startup boom has cultivated an increasingly competitive market, the sector is still far off from maturing because it requires clear regulatory oversight and compliance guidelines, say experts. Moreover, e-commerce companies have finally tapped into a resistant consumer market, making significant advances to establish credibility. To fully unlock this market, experts urge for the development of a fast, frictionless process that prioritizes sustainable delivery times. In contrast, foreseeable profitability in the commercial real estate market, at least in the short term, has diminished in an oversupplied market. Commercial real estate is concerned that demand has shrunk in the postpandemic reality, a problem that will only worsen as new buildings continue debuting. The widespread adoption of hybrid and remote work models is a further burden that the sector will have to manage. At Mexico Business Forum ECHO 2021, industry leaders met to discuss the implications, opportunities and consequences of Mexico’s digital transformation, without forgetting the challenge of remaining responsive to consumer needs while in compliance to an incomplete and volatile legal infrastructure. In modern Mexico, companies will have to stay focused on remaining competitive in a crowded market as they provide consumers added value services.
4
C onfe r ence I mpact
159
Breakdown by job title
companies
24% CEO/ Director General 24% Manager 20% VP / Director 11% Business Developer 10% Analyst / Executive 10% Founder / Partner 1% President
62
speakers
10
Conference social media impact
sponsors
Pre-conference social media impact
16,032 direct impressions during MBF
4,462
22.92% click through rate during MBF
visitors to the conference website
3.50% conference engagement rate
27,442 direct pre-conference LinkedIn impressions 6.17% pre-conference click through rate 12.35% pre-conference engagement rate
Mexico’s leading B2B conference organizer introduces the world’s leading event networking platform. Delivering intent-based matchmaking powered by Artificial Intelligence that connects the right people. Network, no matter where you are.
209
Matchmaking intentions
participants
879 Trading
881
matchmaking communications
86
1:1 meetings conducted
Total
1,447
346 Networking 141 Investment 81 Recruitment
5
C ompan y Attendance
•
1DOC3
•
Cradlepoint
•
Acclaim Energy
•
Crehana
•
Adyen
•
Crestron Latinoamericana
•
Afterbanks México
•
Dalus Capital
•
AlEn
•
Delegación General de Québec en México
•
ALIAN PLASTICS
•
DILA Capital
•
ALT Technologies
•
Dominion Mexico
•
AMBE Engineering LCC
•
EASYSEC
•
AMDA
•
EC RUBIO
•
Aprende Institute
•
Element Fleet Management
•
Aquaculture Advisory
•
Elevadores Schindler Mexico
•
Arendal
•
ENEL GREEN POWER
•
Arista Technologies
•
Energy to Market
•
Atradius Seguros de Crédito, S. A.
•
ENSO Fintech
•
Auronix
•
Enterprise Singapore
•
AUTOMOTIVE
•
EPSCON
•
Automotive Cluster of San Luis Potosí
•
Eureka&Co
•
AWL
•
Exterran
•
AXA Seguros México
•
Finerio Connect
•
Banco Finterra, S.A., Institución de Banca Múltiple
•
Flat.mx
•
Banco Sabadell
•
Frost & Sullivan
•
Becerril, Coca & Becerril
•
Fundación ESRU
•
Belvo
•
Gerzo Administración SA de CV
•
Bitso
•
Global Health Intelligence
•
Brella Ltd
•
•
Briq.mx
Gobierno de Ontario, Embajada de Canadá en México
•
Business Finland
•
•
CAMIC
•
Greystar
•
Cardinal Health
•
GRUBSA
•
CLARA
•
Grupo DAGS
•
ClearSale
•
Grupo GOCA
•
Climatik
•
Grupo Médico Rossano
•
CloudHQ
•
Habits.ai
•
Colegio de Ingenieros de Minas, Metalurgistas y Geólogos de México
•
HAMOC | worry-free rent
•
Hello Doctor
•
Colliers
•
Homie.mx
•
Commercial Director
•
Huawei
•
Comunal coworking
•
Humanologo Consulting
•
CONCIERTO
•
IBERDROLA
•
Conekta
•
Iberdrola México
•
Constructora Insur
•
Imperquimia
•
Cornershop by Uber
•
Independent Executive
•
COSL México, S.A. de C.V.
•
•
Cotemar
INSTITUTO NACIONAL DE CIENCIAS MÉDICAS Y NUTRICIÓN SALVADOR ZUBIRÁN
6
C ompan y Attendance
•
Interproteccion
•
Proteina Animal
•
Ironbit
•
Public Power Utility
•
iVoy
•
Quartux México
•
JOKR
•
RAMA MANTENIMIENTO INDUSTRIAL TOTAL
•
Justo
•
Rappi
•
Kata Software
•
Reworth
•
Kikoya
•
Ricoh
•
Kilpatrick
•
RM Pharma Specialists
•
Klu
•
SIETE ENERGY
•
Kuspit Casa de Bolsa SA de CV
•
Signifyd
•
L3Harris, AS Segment, CAS Sector
•
Skala Ventures
•
Lukoil Upstream Mexico
•
Softtek
•
Manufacturer
•
Soluciones Integrales FRAP
•
Master Works Associates
•
STORI
•
McKinsey & Company
•
Stripe
•
MEDICE Arzneimittel Pütter GmbH & Co. KG
•
SUR / INSTITUTO DEL SUR URBANO
•
Mejores Empresas Mexicanas
•
Technology for Impact
•
Mendel
•
Telcel
•
Mercado Libre
•
Tenet Consultores
•
Mexico Business
•
TMF GROUP
•
MexicoView
•
TotalEnergies
•
Minsait
•
Trebol Foods
•
miranda
•
TÜV Rheinland Mexico
•
Monific
•
UnDosTres
•
Mozper
•
UNIDESARROLLO
•
NautechMX
•
UNIÓN DE CRÉDITO DEL SOCONUSCO
•
NAVIERA INTEGRAL
•
United Producers of Mexico
•
Nissan
•
Veolus
•
NTheetherlands Embassy
•
VERIFONE
•
nutriADN
•
Vesta
•
NYX Hotels
•
Vetta
•
OCA Global
•
Vinco
•
O’Gorman&Hagerman
•
Voxelmaps
•
Orion Productos Industriales SA de CV
•
VTEX
•
Osisko Development Sapuchi Minera Division
•
Walmart Mexico y Centro América
•
Penoles
•
Wolrd Trade & Investment Group
•
Pretmex ( Busines online lending) - Lendera Crowdleasing- ASOFOM-AFICO
•
WorldWise Coaching LLC
7
P r og r am D ay 1
08:00
NETWORKING SESSION 1 - AI-POWERED 1:1 MEETINGS
09:00
BUILDINGS TO COP26 FOR A ZERO EMISSIONS AND RESILIENT BUILT ENVIROMENT
Speaker: Alicia Silva Villanueva, President of SUMe 09:30
NEARSHORING: ALIGNING INDUSTRIAL INFRASTRUCTURE WITH BUSINESS NEEDS OF TOMORROW
Moderator: Claudia Avila Connelly, Executive Director of AMPIP Panelists: Luis Gutierrez, President of Prologis Latinoamerica Jorge A. Fabris, Managing Director of Newmark Juan Rodrigo Vega Langarica, Chief Marketing Manager of Insur Enrique Lavin, Country Head of PGIM Mexico 10:30
VERACRUZ, ISTHMUS OF TEHUANTEPEC
Speaker: Ricardo Mancisidor Landa, Deputy Minister for Industry, Government of Veracruz 11:00
NETWORKING SESSION 2 - AI-POWERED 1:1 MEETINGS
12:00
MEXICO’S COMMERCIAL REAL ESTATE OUTLOOK
Moderator: Pedro Azcue, CEO of JLL Mexico 12:30
INCUMBENTS, DISRUPTORS AND THE FUTURE OF REAL ESTATE RENTAL AND SALES
Moderator: Samantha Macías, General Manager of Yellow Block Panelists: Bernardo Cordero, Co-Founder of Flat.mx Rodrigo Barrera Vivanco, Co-Founder and CEO of HAMOC Juan Kasuga, Senior Partner at CREDITARIA Mexico 13:15
RESIDENTIAL REAL ESTATE: THE WHY, HOW AND WHERE OF MEXICO’S NEXT REAL ESTATE BOOM
Moderator: Gustavo Marcos, Partner at Grupo DAGS and Co-Founder of Real Start Business Academy Panelists: Tonny Hánna, Tiburon Inmobiliario Ricardo Amac, Senior Director of Investments and Development at Greystar Federico Cerdas, CEO and Co-Founder of Global Businesses Inc and Skyhaus Rodrigo Rivero-Borrel, Founder and CEO of Reurbano 14:00
NETWORKING SESSION 3 - AI-POWERED 1:1 MEETINGS
15:00
THE FUTURE OF EARTHQUAKE-RESILIENT ENGINEERING
Moderator: Jesús Valdez, CEO of Miyamoto International CDMX 15:30
SUSTAINABLE CONSTRUCTION AND SMART REAL ESTATE
Moderator: Alicia Silva Villanueva, President of SUMe Panelists: Luis Alberto Vega, Director of Sustainable Development at Saint-Gobain México Joel Sanchez, Mexico Green Building Lead at IFC - International Finance Corporation Alejandro Trillo, Partner/Director of IACSA & Asociados Jose Suarez Picazo, CEO of Suarez Picazo Arquitectos 16:30
MODULAR CONSTRUCTION: THE FUTURE OF CONSTRUCTION?
Moderator: Gonzalo Sebastian Verón, CEO and Founder of Modulbox Mexico
8
P R O G R A M D AY 2
08:00
NETWORKING SESSION 1 - AI-POWERED 1:1 MEETINGS
09:25
WELCOME ADDRESS
09:30
MAXIMISING LIQUIDITY TO SPEED UP RECOVERY
Moderator: Alberto Saracho, Partner at McKinsey & Company Panelists: Liliana Reyes, Director General of AMEXCAP Mark McCoy, CEO of Banco Finterra Francisco Lira, CEO of Banco Sabadell México 10:15
THE KEY TO FIXING MEXICO’S ECONOMIC COMPETITIVENESS
Moderator: Ana López Mestre, Executive Vice President and General Director of AmCham Panelists: José Román, President and Managing Director of Nissan Mexicana and NIBU Rasmus Duun, General Manager Latin America of The LEGO Group Beni López, CEO of Softtek US & Canada 11:00
CORPORATE CREDIT CARDS, END TO END SPEND MANAGEMENT: ESSENTIAL TOWARD THE FUTURE OF COMPANIES IN LATAM
Speaker: Gerry Giacomán, Co-Founder and CEO of Clara 11:20
NETWORKING SESSION 2 - AI-POWERED 1:1 MEETINGS
12:00
INSIDE PERSPECTIVE: THE GREATEST STRENGTHS OF MEXICO’S STARTUP ECOSYSTEM
Moderator: Alejandro Diez Barroso, Managing Partner at DILA Capital Panelists: Alan Karpovsky, Co-Founder of Mendel Nima Pourshasb, CEO and Co-Founder of minu Sujay Tyle, Co-Founder and CEO of Merama Iván Ariza, Founder and CEO of Cargamos 13:00
INVESTMENT BOOM: CRITICAL SUCCESS FACTORS FOR RAISING MONEY RIGHT NOW
Moderator: Diego Muradás, Co-Founder and CEO of Zenda.la Panelists: Antonia Rojas, Partner at ALLVP Paqui Casanueva, Chairman of Endeavor México Camilo Kejner, Managing Partner at Angel Ventures Diego Serebrisky, Co-Founder and Managing Partner of Dalus Capital 14:00
NETWORKING SESSION 3 - AI-POWERED 1:1 MEETINGS
15:30
TECHNOLOGY, RISK, SPEED AND SCALE: WHAT DRIVES SUCCESS IN THE MEXICAN BANKING MARKET?
Moderator: Rocío Robles, Partner at Tenet Consultores Panelists: Stefan Moller, Co-Founder and CEO of Klar Pablo Viguera, Co-Founder and Co-CEO of Belvo Aitor Chinchetru, Founder and Co-CEO of Fintonic Marlene Garayzar, Co-Founder of Stori 17:00
NETWORKING SESSION 4 - AI-POWERED 1:1 MEETINGS
9
P R O G R A M D AY 3 08:00
NETWORKING SESSION 1 - AI-POWERED 1:1 MEETINGS
09:00
CREATING THE OPTIMAL DIGITAL E-COMMERCE CUSTOMER EXPERIENCE
Moderator: Ricardo Rodríguez, Vice President Enterprise Sales of VTEX Mexico & Central America 00:00
DELIVERY TIMES, CUSTOMER EXPERIENCE AND THE BATTLE FOR THE E-COMMERCE CUSTOMER
Moderator: Alvaro de Juan Iriarte, CEO of iVoy Servicios de Entrega Panelists: Marinus van Gestel, Head of Latin America at Cornershop by Uber Alejandro Solís, Director General México and Costa Rica of Rappi Ignacio Caride, SVP E-Commerce, Payments and Financial Services Mexico and Central America of Walmart David Geisen, Country Manager and Vice President Marketplace México of Mercado Libre
10:30
THE EXPERIENCE ECONOMY: INSIDE ADOBE’S QUEST TO CHANGE THE WORLD THROUGH DIGITAL EXPERIENCES
Speaker: Douglas Montalvao, Experience Cloud General Manager for Hispanic Latam of Adobe 11:00
NETWORKING SESSION 2 - AI-POWERED 1:1 MEETINGS
12:00
DIGITAL PAYMENT METHODS, PROCESSORS, TECHNOLOGY AND THE RULES OF THE GAME
Speaker: Miguel Diaz Diaz, General Director of Payments Systems and Market Infrastructures at Banco de México
12:30
TACKLING E-COMMERCE PAYMENT FRAUD IN MEXICO
Moderator: Pierre-Claude Blaise, CEO of AMVO Panelists: Erick McKinney, Country Manager México of Adyen Victor Islas, Country Manager of ClearSale México Emilio Vázquez, Sr Director of Merchant and Acquirer Solutions, at VISA Christian León, Regional Director Latin America of Signifyd 13:30
CRYPTOCURRENCIES’ PUSH INTO MAINSTREAM
Speaker: Adriana Villaseñor, Corporate Development Lead at Bitso 14:00
NETWORKING SESSION 3 - AI-POWERED 1:1 MEETINGS
15:00
DISRUPTIVE TECHNOLOGY AS A CATALYST FOR DIGITAL TRANSFORMATION IN MÉXICO
Speaker: Carlos Perea, Digital Transformation Strategist and Senior Vice President of Cradlepoint
16:00
HARDWARE AND SOFTWARE ENABLING THE DIGITAL TRANSFORMATION OF THE WORKPLACE
Moderator: Edgar Medina, Country Marketing Manager of Workday Panelists: Verónica Peña, Modern Work, Security and Surface Business Group Director of Microsoft Agustin De la Maza, Chief Solutions Officer of Softtek Amilcar Alfaro, Head of Field Marketing GCP - Mexico and Emerging Markets at Google Cloud
17:00
NETWORKING SESSION 4 - AI-POWERED 1:1 MEETINGS
10
C onfe r ence H ighlights PRIVATE DEVELOPMENTS COULD PLAY LARGER ROLE IN NET ZERO The fight against climate change must
economy is through green buildings, said
involve the cooperation of all parties, even
Villanueva. These buildings aims to reduce
non-manufacturing companies. To join the
or eliminate altogether the negative impact
fight, private companies could turn to green
of a development project on the natural
buildings, one of the most straightforward
environment, and if possible, create a
and cost-effective ways to contribute to a
positive one through intentional design and
zero-carbon economy.
operation. In practice, that could equate to improving energy efficiency, water
The most successful initiatives have usually
efficiency and conservation, implementing
been accomplished through public-private
renewable technologies and sustainably
par tnerships, most recently exhibited
s o u r c e d b u i l d i n g m a te r i a l s . Fr o m a
through the development of the COVID-19
pragmatic standpoint, “buildings and real
vaccine in record time. In contrast, the
estate in general are the [white] elephant in
international community has repeatedly
the room,” said Villanueva.
failed to successfully address a far more pressing existential crisis: climate change.
“I remember when this technique first
The science is clear: if the international
emerged, most viewed the movement as
community fails to act soon, the world will
a trend that would disappear. Now that
suffer irreparable damage that will incur a
its value has been recognized, investors
cascade of consequences that are much
are exploring its application to their own
more expensive than inaction.
development portfolios,” she added. Private sector initiative will be paramount in
“The participation of the industrial and the private sectors toward net zero carbon initiatives will be essential, otherwise addressing climate change will be impossible.”
Mexico considering the country has actually added to global carbon emissions despite having ratified the Paris Climate Agreement almost six years ago. This was caused in part by a federal reprioritization of carbon fuels in energy generation over green renewable
Alicia Silva Villanueva
technologies, which has resulted in a six-
President of SUMe
year delay in the country’s commitment to generate 35 percent of the nation’s energy with clean technologies by 2024. Under President Andrés Manuel López Obrador’s
Beyond international governments, the
administration the country pivoted from a
participation of the global private sector will
green energy transition to carbon projects,
be critically important to effectively address
which could threaten to add another degree
the climate emergency. The most effective
Celsius to the global environment. However,
place for these entities to begin: net zero
there are still plenty of energy producers
carbon buildings. “The participation of the
and green initiatives the private sector could
industrial and the private sectors toward
recourse to.
net zero carbon initiatives will be essential, otherwise addressing climate change will
As development tries to keep up with a
be impossible,” said Alicia Silva Villanueva,
swelling global population, especially in
President, SUMe.
urban centers where people are most densely concentrated, green building could
The most straightforward and cost-effective
play a central role in all new projects not only
way the private sector can contribute
from a health perspective but an economic
to the development of a zero-carbon
one. “It is more expensive to ignore climate
11
C onfe r ence H ighlights change than to prevent it, we have learned
operating emissions in their portfolios by
that repeatedly this year through multiple
2030 and to advocate for all buildings to be
costly climate disasters,” said Villanueva.
net zero in operation by 2050,” she added.
With only eight years to address this
In order to supplement the success of this
emergency, the “Net Zero Carbon Buildings
call to action the organization allied with
C o m m itm e n t c h a l l e n g e s co m p a n i e s ,
banks to facilitate access to capital for green
cities, states and regions to reach net zero
development projects.
PANDEMIC, NEARSHORING RAISE INDUSTRIAL, LOGISTIC DEMANDS With the economic recovery seemingly in full
challenges to solve for companies providing
swing, the growing demand for nearshoring
industrial infrastructure.
manufacturing and logistics-focused activity provides Mexico’s industrial parks with plenty
“We are experiencing record growth in
of demand. Adapting to current needs is
the industry,” said Enrique Lavin, Country
essential to attract these new players, argue
Head, PGIM Mexico, the local arm of a
industry experts, but this shift should also
leading global real estate manager and
align with optimal investment attraction
administrator. “Nearshoring is a reality, we
strategies.
see that it is increasing 15 percent year-byyear for industrial parks and logistic centers,”
“The real estate market for industrial and
he added, noting that most players settling
logistics players has been one of the winners
in the Mexican market tend to come from the
of the pandemic, although seeing markets
US and Asia. But neither manufacturing nor
in terms of winners and losers is too simple
logistics are standing still. Both are moving
because they are all intertwined,” said
with current trends such as sustainability,
Claudia Ávila, Executive Director, Mexican
environmental responsibility, digitalization
Association of Industrial Parks (AMPIP).
and the use of electric vehicles (EVs), many
Two main drivers are pushing demand in the
of these trends having some form of overlap.
market: the growing need for nearshoring
Health and safety concerns have also
to outsource manufacturing or logistics to
increased significantly since the start of the
Mexico, as well as the spectacular growth
COVID-19 pandemic.
of e-commerce. Ávila mentioned that the latter industry has experienced a whopping
“Adaptability to new challenges and trends
percent 81 growth from 2019 to 2020,
is key,” said Juan Rodrigo Vega, Chief
according to a report from the Mexican
Marketing Manager, CONSTRUC TOR A
Association of Online Sales (AMVO). Overall,
INSUR. Investment volume in 3Q21 hit
e-commerce now represents up 9 percent of
a record high, reaching US$193 billion,
all sales made. Growth in nearshoring might
according to infrastructure giant Newmark’s
not be as explosive but the growing demand,
3Q21 Capital Markets Report. In the current
thanks to Mexico’s excellent position and
market, investors are looking for higher
market fundamentals, can no longer be
efficiency: “It is necessary to address
ignored. The uptick causes significant
challenges from industrial players looking to become more efficient,” said Jorge Fabris, Newmark’s Managing Director.
“Mexico has one of the highest CAP Rates, between 6 and 7 percent, whereas the US has between 3.5 and 4.5 percent. This is a difference of 250-300 base points.”
Luis Gutiérrez President of Prologis Latin America
Though adaptation is essential for the success of real estate companies, the shift to client demand should go hand in hand with attracting foreign direct investment (FDI). Because Mexico is widely recognized as a force in manufacturing, with an excellent workforce to boot, the country is well-
12
C onfe r ence H ighlights positioned to attract such capital. In fact,
need to be implemented correctly. “Because
Mexico is one of the world’s top locations
saturation is an issue, companies should
for FDI. “During events and panels, people on
consider going vertical instead of expanding
the outside often see Mexico as a potential
horizontally,” suggested Vega. This means
winner. We are in a privileged position to
higher buildings, operating on an equally
make good use of growing demand,” said
elevated level of efficiency. Converting Class
Fabris. “Mexico has one of the highest CAP
B buildings to warehousing can provide
Rates, between 6 and 7 percent, whereas the
more value, said Fabris. Older, unused
US has between 3.5 and 4.5 percent. This is
manufacturing plants are often located in
a difference of 250-300 base points. These
well-connected sites and become beneficial
figures attract foreign capital to Mexico,”
again by serving as storage spaces. What
said Luis Gutiérrez, President, Prologis
is more, green energy solutions such as
Latin America
photovoltaic solar panels could be installed on older buildings.
“The biggest challenge is to develop joint platforms with the government to offer long-term solutions.”
H u m a n re s o u rce s p o s e th e n ex t b ig challenge for Mexico’s industrial players. E s p e c i a l l y a f te r a g l o b a l p a n d e m i c ,
Enrique Lavin
international companies have found that
Country Head of PGIM Mexico
attracting the right workforce is an issue. “Mexico’s human resources are an asset, so the country stands a lot to gain here,” said Gutiérrez. But these resources have
A s a result of increase d de ma nd for
remained somewhat underdeveloped.
e-commerce, more storage and inventory
“We are still somewhat behind developed
space is a must for companies in Mexico.
economies in terms of infrastructure as
“Changes in consumption patterns and
well as in the training of human resources,”
logistic needs have altered how we see the
said Vega.
industry,” explained Gutiérrez. Especially in the North of Mexico, storage space
“Mexico has one of the best workforces in
is becoming an issue, driving up land
the world, but the public and private sector
prices. “Storage and logistics practices
should develop its potential,” he added. Via
are changing from a ‘just in time logistics’
improved universities and training centers,
to ‘just in case storage’ approach,” said
Mexico’s workers can begin to better tackle
Gutiérrez, which further compounds the
the challenges of modern logistics and
problem. Higher rents and increased land
automation. “The biggest challenge is to
prices create problems. “This limits growth,”
develop joint platforms with the government
said Lavin.
to offer long-term solutions,” said Lavin.
Finding Solutions to Position
Mexico’s northern and center areas are
Mexico as a Winner
quite well developed, but Mexico’s south has traditionally not enjoyed as much
No matter the solution, Mexico should move
growth. By making use of the growing
quickly to solve issues regarding space and
need for industrial infrastructure, this
workforce. “Potential clients have no time
trend can change. “There is real industrial
to wait,” stressed Ávila. “This is indeed
growth in southern Mexico, especially for
a challenge, but is a positive issue for
storage facilities. We see that this area
developers because it forces them to be in
has great potential for this type of growth
touch with current demands,” replied Fabris.
development,” said Vega. Fabris added that southeast Mexico has attracted attention
To deal with a lack of storage space, plenty
from international clients, “particularly in
of solutions are already available and merely
Merida, Villahermosa and Veracruz.”
13
C onfe r ence H ighlights MEXICO CITY: A RENTERS’ COMMERCIAL MARKET Commercial office spaces remain largely
25 percent in just a year; coinciding exactly
unoccupied in Latin America, a trend
in the submarkets where there is presently
that will only grow as pre - pa nde mic
most commercial space availability.
development projects are completed. “The over-supply in the commercial rental
Demand, on the other hand, only increased
market has allowed renters to emerge as
by 245 ,739 m2 and about 30 percent
unequivocal winners but places owners at
of m a rket a c tivit y wa s d e rive d f ro m
a growing disadvantage.” said Pedro Azcue,
preexisting contracts. If the hybrid work
CEO of JLL Mexico.
model takes hold, companies would be further incentivized to scale down their
Of Mexico City’s almost 7.5 million m2
office spaces. In a comparative analysis
of commercial office space inventor y,
over the past decade, it became evident
roughly 1.8 million m2 remains available,
that the demand for commercial spaces is
concentrated mainly in Santa Fe with 22
cyclical in Mexico, reaching 556,846 m2 in
percent, followed by Polanco with 15 percent
2014 only to backslide the next year before
and Insurgentes Sur with 12 percent of the
climbing back to 600,334 m2 in 2016. There
total market.
was a definitive peak in 2018 with a demand increasing to 646,244 m2 before dropping
Within the available market approximately
to the current 245,739 m2.
43 percent of the spaces are air conditioned, a deliberate choice from companies who
The pressing question for property owners
looked to cut costs from their bottom lines.
is: will market demand rebound as it has in
This choice has worked at the detriment
the past or should they start formulating
of office buildings inaugurated between
an exit strategy now? So far, in the post
January and September 2021, which had to
pandemic economy, the numbers don’t look
offer their spaces at the same cost as spaces
too great. In all but one submarket region,
without this amenity. Yet, some have held out
occupation of office spaces has decreased,
and currently represent 8 percent of the total
most saliently in Santa Fe with a negative
available market. On top this, their added
70,944 m2.
presence in the already saturated market has increased commercial market availability by
Irrespectively, there are more development projects underway, which are estimated
“The over-supply in the commercial rental market has allowed renters to emerge as unequivocal winners but places owners at a growing disadvantage.”
to add an additional 710, 019 m2 during the next few years. These are concentrated m a i n l y i n R e f o r m a , I n s u r g e n te s a n d Polanco. In addition, there are dozens of other proposed projects on the pipeline
Pedro Azcue
that are expected to add a further 1 million
CEO of JLL Mexico
m2 of commercial office space in Reforma and Santa Fe.
DISRUPTORS REVOLUTIONIZE REAL ESTATE RENTALS, SALES Mexico’s expansive real estate market had
The pandemic has left a mark on Mexico’s
been gradually adopting new trends but
real estate environment. Construction
the pandemic accelerated the transition.
slowed down immensely and analysts
Developers are now looking for more space
say it will take a while before it recovers.
outside cities, cost-effective co-living and
On the other hand, the mortgage market
new ways to invest in property, said real
was boosted by the increase in residential
estate insiders.
demand and offer, low interest rates and
14
C onfe r ence H ighlights force d savings generate d during the
for remote-working professionals. For
pandemic. The housing lag was reduced
those still looking at property within the
too. “The initial uncertainty shifted to a
city, demands are also changing. “When
big opportunity for the company,” said
we value buildings, we had to adapt this
Bernardo Cordero, Co-Founder, Flat.mx,
valuation to a bigger need for common
a startup that buys and resells upgraded
spaces,” said Cordero, pointing toward how
property. The company saw that these
families frequently look for apartments that
factors led many to try to sell their property,
provide spaces that can entertain their kids.
while many potential buyers saw slightly lower prices.
The new way of living is also changing how people use office space. “Companies
Yet few have sufficient funds to purchase
are looking for more advanced office
expensive property, said Rodrigo Barrera,
spaces, with less of a focus on common
Co-Founder and CEO, HAMOC , which
areas and more of a focus on productivity
provides service as an aval (a necessary
and flexibility for workers who go there
guarantor for renters in Mexico). “The
irregularly or infrequently,” said Samantha
pandemic has affected the market in offer
Macías, General Manager, Yellow Block.
and demand. Nonetheless, even before the
Now that hybrid home-office models are
pandemic we saw that people were looking
becoming popular, real estate companies
to rent property. Not everyone sees buying
need to step up and adapt their offer.
a house as a good opportunity,” he said. As some move away from the areas they H owever, the economy is picking up,
traditionally lived in, others are looking to
showing a clear growth in demand for the
enter these exact areas now that spaces are
mortgages, Juan Kasuga, Senior Partner,
becoming free. “The post-pandemic world
CREDITARIA Mexico. Many are not looking
is not going to lie down and relax forever.
to purchase housing right where they live,
Schools and restaurants continue to add
though: “People are migrating away from
value,” said Barrera. Some areas, such as
cities, where they rent, and buying property
neighborhoods close to Mexico’s famous
elsewhere,” Kasuga said. The main driver is
Reforma avenue, will remain popular for
that people, often working from home, are
those reasons. “But some zones that were
looking for a better quality of life within
previously ‘hot’ to rent are no longer that
the ‘new normal.’ “An increasing amount
enticing,” he added.
of people are buying real estate in Mexico’s central region, in places like Cocoyoc, Valle
For those looking for spaces to work in
de Bravo and Queretaro, considered real
person, new trends are emerging. Some
estate hot spots at the moment,” he added.
do not have the money to rent or buy
One major selling point is the quality of
expensive properties in bustling areas
internet: living at Mexico’s beaches appears
of major cities. Co-living solves many of
to be an attractive proposition but lagging
these issues, said Barrera. “Co-living is
internet can soon become a major nuisance
cost-effective because it gives people the opportunity to live in small, efficient spaces instead of large apartments. Co-
“Companies are looking for more advanced
living furthermore seeks to give an identity
office spaces, with less of a focus on
to social living through its shared spaces.
common areas and more of a focus on
It meets human needs by allowing people
productivity and flexibility for workers
to live in a community,” supported Barrera.
who go there irregularly or infrequently.”
Other than co-living, co-owning properties
Samantha Macías General Manager of Yellow Block
is growing in attractiveness. Because it becomes increasingly difficult to purchase an apartment with one’s own budget, people are now gathering their resources
15
C onfe r ence H ighlights to buy property. “People still want to own
said Macías. “The question is how flexible
property, but the possibilities to do so are
real estate companies can be and innovate
simply not the same as in the past decades,”
through technology.”
concluded Barrera. Many people look for websites to facilitate Other, unforeseen trends could emerge
their search for property. In-person visits are
soon, according to Cordero: “We will see
still common, though many have begun to use
the creation of products we have heretofore
digital tools for formal processes in renting
not seen in the market.” But whatever living
or buying. The real challenge for real estate
trend people opt for, the online sphere is
companies, then, is to give clients a pleasant
becoming increasingly important. “People
experience as they rent or buy real estate.
are much more open to move online. You
“We need to see how we can provide added
can see this in ever ything from video
value to clients, which are also becoming
meetings down to commercial processes,”
more sophisticated over time,” said Kasuga.
RESIDENTIAL REAL ESTATE TRENDS, TECH, DATA In 2019, the largest challenge in the real
Market. However, realtors foresee that 73
estate sector were permits. Two years later,
percent of individuals will be willing to move
the sector is fully changed following the
looking mainly for larger spaces.
overwhelming lifestyle changes caused by the pandemic. Demand for residential real
Spaciousness, privacy for meetings and
estate has shifted significantly, generating
classes and well-defined areas within the
long-term changes that developers must
home for different simultaneous activities
embrace to thrive.
are key to this new market, said Cerdas. “Big and better located spaces are very
“Development in this industry is slow, it is not going to immediately arose from what is trending, so while the market research is ready, we must listen to the immediate user for ideas.”
Rodrigo Rivero-Borrell Founder and CEO of Reurbano
important. People like to live in urban areas where they have supermarkets, public transportation or parks nearby.” “Amenities within apartment complexes or residences are also decisive factor,” said Tony Hánna, CEO, Tiburon Inmobiliario. But there is uncertainty in the market as nobody knows if the current lifestyle changes are to stay. “The only thing is certain is that home office is here to stay,” he said.International
The work decentralization was the main
trends are leading developers to build
driver of change. It caused changes in
apartments with modular rooms, said
mobility, demand and availability of resources
Hánna, comprised of flexible spaces that can
to invest. Work from home modalities and
be easily adapted through panels.
online schools created a new lifestyle, increasing the value of space within a home,
However, the real estate industry might
“within which notable priorities are outside
be slow to change, in comparison to other
spaces, such as balconies or terraces, as well
se c tors , s aid Ro drigo Rive ro - B orrell ,
as flexible areas to study, work or exercise,”
Founder & CEO, Reurbano. “Development
said Federico Cerdas, CEO & Co-Founder.
in this industry is slow, it is not going to
Global Businesses Inc & Skyhaus.
immediately arose from what is trending, so while the market research is ready,
About 34 percent of tenants claimed they
we must listen to the immediate user for
will change their residence at the end of the
ideas.” New consumer preferences are also
quarantine, found a study by Real Estate
changing the commercial real estate market.
16
C onfe r ence H ighlights “Offices need to be more than desk spaces
to bring vibrancy and diversity to existing
and simulate walking areas and parks with
neighborhoods, he added.
open spaces that promote interaction,” said Rivero-Borrell.
Another critical change is the use of big data and data analytics. “Millennials are
“We have to now provide options for fast internet, doors and windows with acoustics and large spaces to offer added value to our spaces.”
now the ones who buy real estate and Gen Z is already entering the market,” said Hánna. Every day, online real estate sales increase, just as in every other market. “I see a future where operations are mostly
Federico Cerdas
online. I already had a sales case there the
CEO and Co-Founder of Global Businesses Inc and Skyhaus
operator did not know the client; the client did not know the property and even took mortgage credit all online,” said Hánna. The e-commerce boom will generate more data that will help focus marketing, development
While the trends are coming slowly, even
and construction efforts.
small changes generate costs and shift finances and market priorities. As hybrid
While there are large amounts of data
work modalities are likely here to stay, said
available to developers, the country lacks
Cerdas, developers have to provide spaces
a robust database that contains all this
that allow the coexistence of working
information in a single place. Information
couples, children studying and many others.
regarding the use of parking meters per
“We have to now provide options for fast
hour, the location and busy hours of public
internet, doors and windows with acoustics
transportation and location of schools, is
and large spaces to offer added value to our
public. But it is not stored in one united
spaces,” Cerdas said.
system that supports real estate sales and leasing, said Rivero-Borrell.
L arge cities are usually the hubs for residential real estate sales and rentals, so
While companies wait for a robust database,
they are the first to feel market changes
social media can be an optimal alternative
but represent significant opportunities for
to generate own leads and trends, said
developers. “Mexico City is a major hub for
Gustavo Marcos, Partner, Grupo DAGS.
employment and commercial activity. Like
“Social media has been a truly innovative
other large metropolises with high costs of
tool for the construction industry because
housing, those in Mexico City are forced to
it requires a lot of planning and is quite
live in its outskirts and spend several hours
challenging to maintain. Nevertheless, every
commuting to work on public transportation
single company in the industry should have
or in traffic,” said Ricardo Amack, Senior
its own social media platform,” he said. A
Director of Investments and Development,
social media strategy has allowed DAGS it to
Greystar. This is the primary reason why
ally with other construction companies, said
multifamily complexes are an ideal option
Marcos, because it has opened the doors
for citizens who want high-quality, secure
to connect with the right companies and
and well-located housing, as well as a way
identify market trends.
SAFEGUARDING DEVELOPMENTS THROUGH SAFETY COUNTERMEASURES International collaboration, technological
in public and private development projects.
innovation and continuous assessment
Now, the company finds itself fighting the
garnered over 100+ earthquakes have made
added challenges presented by climate
Miyamoto International a specialized partner
change, which are expected to include more
17
C onfe r ence H ighlights extreme and recurrent weather events in the
building could move during a seismic event,
near future. In anticipation, the company is
which has been known to be life threating.
looking to expand throughout Mexico to
Furthermore, extrapolating from data
meet its customers wherever it is needed.
gathered over the company’s life has led to engineering innovations such as base isolation and the rotor technology that gives
“We have to now provide options for fast internet, doors and windows with acoustics
buildings the flexibility to wobble without abruptly moving physical objects.
and large spaces to offer added value to our spaces.”
Moreover, the company also offer 24/7
Federico Cerdas
remote monitoring to provide immediate
CEO and Co-Founder of Global Businesses Inc and Skyhaus
and precise structural assessments after an earthquake to protect life, while also helping resume business operations as soon as possible. “Once a seismic event occurs, data is uploaded to the cloud. Soon after, we
Miyamoto International has been present
develop a quick data analysis and conclude
in Mexico since 2017’s Puebla-Morelos 7.1
by providing a technical report,” said Jesus
magnitude earthquake, which caused the
Valdez, Miyamoto International.
collapse of more than 40 buildings and killed more than 200 people. In the aftermath of
The company has also taken on specialized
the disaster the company helped rescuers
engineering projects such as the Pieta
navigate the epicenter and evaluate the
Rondanini in Italy and the Palace of Gaddi
structural integrity of buildings to reduce
Baithak in Nepal to conserve and protect
the loss of life. Since then, the company has
precious historical artifacts from major
stayed and helped development projects
damage in the event of an earthquake.
with the use of geophysics, seismic and
Recently, the company has begun to adapt
structural engineering.
its preventive and reactive protocols for seismic events to other environmental
This exper tise is coupled with digital
scenarios, namely flooding.
innovations in modeling and data analysis that goes beyond initial struc tural
Overall, Miyamoto International is preparing
risk analysis . The company evaluates
to conf ront th e a d de d challe nges of
foundational damage on the bed rock
climate change as its project development
and even how physical objects within the
projections have helped.
SUSTAINABLE CONSTRUCTION IS NOW A NECESSITY While COP26 climate talks gather steam
It is an absolute necessity if the world
and the world increasingly focuses on
is to continue as we know it today,” she
sustainability, some industries are unclear on
continued.
how to achieve it. In sustainable real estate, sustainable materials, smart technologies
Nevertheless, sustainable construction
and the retrofit of existing infrastructure are
is a challenge, which must be addressed
key steps, argue industry experts.
from the root: the sourcing of materials. However, there are numerous barriers in its
“If we want to prevent disastrous climate
implementation, some of them perceptional.
change, we need to keep sustainability
“It is a myth that sustainable materials are
firmly in mind,” said Alicia Silva, President,
more expensive,” said Silva.
SUMe, an organization looking to promote s u s t a i n a b l e c o n s t r u c t i o n i n M ex i c o .
Even if costs were to be higher, their
“Sustainable construction is not a luxury.
consideration might be well worth the
18
C onfe r ence H ighlights investment, said Luis Alberto Vega, Director
This mindset is essential to achieve good
of Sustainable Development for Mexico
results,” he added.
at globally leading glass maker SaintGobain. For manufacturers, costs concerns
Mexico’s real estate developers would
are also not the most pressing concern.
benefit from a higher level of awareness
“When designing solutions, companies
regarding sustainable practices. “Building
need to ensure that designs improve life
green makes a lot of sense economically,
quality, meet regulatory norms and satisfy
even though people might not be aware
needs of modern buildings,” he said. Vega
of this fact,” said Joel Sánchez, Mexico
furthermore explained that Saint-Gobain
Green Building Lead, International Finance
further boosts the sustainability of its glass
Corporation (IFC). As an expert in financing,
by recycling the materials the company uses
Sánchez admits that accessing the funds
in its industrial processes.
that could boost sustainability can be difficult in Mexico. “But for commercial
M o re th a n m e re m ate ri a l i s n e e d e d ,
and industrial (C&I) players, sustainable
according to Alejandro Trillo, Partner and
solutions pay themselves back within a
Director at engineering and sustainability
year and a half,” he said. What is more,
group IACSA & Asociados. “A combination
“not implementing measures will be costly
of materials and technologies is necessary
on the long term. Consumers increasingly
to have an optimal impact,” he said. In
demand sustainability and governments
addition, those using the infrastructure
could impose regulations, for example,”
need to know how to operate sustainably,
added Sanchez.
“otherwise we might as well not have installed anything at all.”
Sustainability can also be more economically viable than the alternative. “ Financial
Fo r tu n ate ly, d e m a n d fo r su s t a in a b l e
appetite for sustainability is already here,”
materials and best practices are growing
said Sánchez, pointing toward a globally
organically, based on the modern market.
growing demand for green bonds.
“This creates an organic driver to adapt sustainable technologies. But we cannot
When looking into sustainable solutions,
just pick and choose, we need to pick the
real estate developers can take advantage
technologies that best fit what companies
of new materials and equipment, such
need. Analyzing costs and benefits is
as efficient air-conditioning and energy
essential,” said Trillo.
generation using photovoltaic solar panels. “ Ever y year, these clean technologies
While the overall market favors sustainable
drop in price, creating further incentives
practices, companies could benefit from
for companies,” said Sánchez. Many of
focusing on the most environmentally-
sustainability’s benefits can be achieved
conscious clients, said José Suarez Picazo,
th ro u g h p a s s i ve m e a n s . O n ce th e s e
CEO, Suarez Picazo Arquitectos. “We do
solutions are constructed, they generate
look for clients that focus on sustainability.
benefits without further efforts required. Much of the market’s attention focuses
“...not implementing measures will be costly on the long term. Consumers increasingly demand sustainability and governments could impose regulations, for example”
on new developments, but the experts see an “elephant in the room,” said Silva: the buildings that already exist. “People were so focused on new construction, they almost forgot about their much larger
Joel Sánchez
existing portfolios,” said Sanchez. “Re-
Mexico Green Building Lead at International Finance Corporation (IFC)
using buildings instead of demolishing and starting from scratch benefits sustainability,” agreed Suarez.
19
C onfe r ence H ighlights “In 2050, we will have much more real
some countries have managed to
estate constructed but also many more
successfully implement this technology. In
buildings to renovate,” said Vega. After
Colombia, for example, 20 percent of new
the pandemic led many offices to send
constructions are green-certified thanks to
their employees back home, the market for
the combination of positive government
office real estate contracted significantly,
measure and easy access to financing
leading to opportunity. “We have a major
to banks. “If we do not join the trend as
opportunity to re-transform these buildings
financial institutions, we will be left behind.
into something more sustainable and cost-
Therefore, I expect Mexican institutions to
effective while matching it to new workplace
catch on rapidly,” said Sánchez.
cultures,” said Trillo. “The private industry will have to invest But an issue is to measure the sustainability
significant amounts of money,” said Vega,
of new and existing infrastructure. “It is a
since the country has fallen behind on the
major challenge to find the right tools
global energy transition. Climate change
that will certify our building portfolios,”
and its effects are real, so sustainability and
said Sánchez. Though the investment
a shift in the global mindset are crucial if
necessary to achieve this goal is extensive,
humanity wishes to thrive.
MODULAR CONSTRUCTION: THE FUTURE OF BUILDING?
Automation has been slow to penetrate
Company. “However, modular construction
the construction industry in comparison
in the EU and US markets has the potential
to sectors such as automotive or health.
to deliver annual savings of up to US$22
Modular construction is aiming to introduce
billion, and there is reason to believe
the nobleites of automation into the sector,
the current revival could be different,”
among many other benefits.
according to the study.
To d a te , p r e f a b r i c a te d h o u s i n g h a s
U n d o u b te d l y, m o d u l a r c o n s t r u c t i o n
a chieve d a sustain a ble fo oth old in a
offers developers of residential buildings,
handful of locations, including Japan and
hotels, clinics and educational spaces
Scandinavia. In markets such as the UK
a novel approach for urbanization. In
and the US, it has been in and out of favor
Mexico, this type of construction is being
since the postwar era, explains McKinsey &
led by companies such as Modulbox,
20
C onfe r ence H ighlights created after 30 years of experience in the
recycling materials, controlling inventory
traditional construction sector. From luxury
and protecting building materials. Because
apartments to worker camps, Moldulbox
the modular structure is mostly completed
manufactures buildings in a controlled
in a factory-controlled setting using dry
environment and mails clients the entire
materials, the potential for high levels
project, including finishes.
of moisture being trapped in the new construction is eliminated. Another large
M odulbox ’s broad range of produc t s
benefit of modular buildings is that they can
includes stackable and relocatable modules
be disassembled and the modules relocated
that are easy to install and do not need
or refurbished for further uses, reducing the
concrete foundations. These can be used
demand for raw materials and minimizing
for modern social housing and residential
the amount of energy expended to create
housing and they are all earthquake proof.
a building to meet the new need.
The company also produces industrial buildings with light or heavy and galvanized
To increase its market presence, Modulbox
structures.
partnered with the Chinese government to export and import from China easily. “We
“If manufacturing is a good thing for so
can ship all modules by land or by sea. In
many common items, why is it perceived
Latin America, we deliver modules from
as a negative when it comes to your home,
Mexico to Patagonia,” said Verón.
school, hotel or office? ” said Gonzalo Verón, CEO and Founder, Modulbox Mexico.
Modulbox integrates design and sustainable
Prefabricated construction is a common
development by combining steel and
construction method in other parts of the
concrete in the same construction system,
world. “With the Modulbox manufacturing
making it a highly competitive product
p ro c e s s c a r r i e d o u t i n a c o n t ro l l e d
that also offers long durability. “ With
environment, we can offer significant cost
Modelorama, we opened one subsidiary
reductions, project execution times and
per day and by now they have about 200,”
high-quality control.”
explained Verón.
Modular construction combines technology,
In Mexico, Modulbox was worked with the
design, sourcing, manufacturing, logistics
public health sector building emergency
and construction in one integrated offering,
clinics during the COVID-19 pandemic.
explained Verón. Modulbox has been able
“Our services have been very responsible
to halve building speed in comparison to
for this sector because we are able to adapt
the traditional method due to the use of
to rural, remote zones and to even act
prefabricated modules. “Construction can
upon natural diseases impacting a region,”
be 100 percent transported to any other
Verón said.
place, according to the client’s needs, and it can be expanded as required; up to 4 levels,”
In hospitality, Moldubox is working with
says Verón.
private hotels in Mexico’s touristic areas following the highest quality standards. The
Modular construction has fully insulated
company also sees potential in urbanism,
walls and ceilings, increasing comfort and
specially for co-living and coworking spaces
reducing electricity costs. This type of
in Mexico’s urban areas. “Mexico City has
construction also reduces impact in the
extensive problems. Spaces for lease in
construction zone by up to 80 percent and
the most sought-after neighborhoods,
provides greater security.
such as Roma, Polanco and Condesa, are inaccessible. With our urban construction
One of the largest benefits of modular
model, we want to create something more
co n s tr u c ti o n i s s u s t a i n a b i l it y. W h e n
accessible within the next five years,”
building in a factory, waste is eliminated by
said Verón.
21
C onfe r ence H ighlights LIQUIDITY: TOOL TO BOOST MEXICO’S ECONOMIC RECOVERY Whereas the pandemic greatly hurt Mexican
In Mexico, private companies face four
businesses, the country’s reopening can
barriers to financing, said Mark McCoy,
place them on the path to recovery. But to
CEO, Banco Finterra. The first is enforcing
achieve it, these businesses need access
the rule of law. The second is providing
to liquid capital, argue financing experts.
guarantees for foreign direct investment
To boost the private sector’s cashflow in
(FDI) and similar backing for private
this crucial period, it is essential to build
funding. This is not necessarily happening
an investment-friendly environment and
in Mexico, as evidenced by recent measures
provide flexible financial support.
to curb private participation in Mexico’s energy sector. Third, Mexico requires
“If we can give strong certainty to investors, economic development can truly kick off.”
improved infrastructure such as roads and access to water and stable electricity. Finally, more detailed regulation is also
Francisco Lira
essential. While McCoy said that Mexico’s
CEO of Banco Sabadell México
regulatory bodies in a variety of sectors are doing excellent work, there are some “areas of opportunity.” “The rule of law is important to foster long-
The pandemic hit Mexico hard, with the
term investment, especially for SMEs,” said
country’s economy contracting by 8 . 3
Francisco Lira, CEO, Banco Sabadell México.
pe rce nt in 2020. While th e G D P will
“If we can give strong certainty to investors,
likely bounce back 6 percent this year,
economic development can truly kick off.”
the pandemic’s overall negative impact is undeniable. SMEs have been affected
Fostering stable investment environments
strongly, said Alberto Saracho, Partner,
has yielded excellent results in Mexico’s
McKinsey & Company: “Global markets
past development. “When I drove through
experienced shocks in terms of demand and
the Bajio region in the 1990s, people would
supply. People could not go to work. The
only sell sweets and strawberries. This area
service sector stopped from one day to the
has since turned into a crucial part of the
next. Companies went into savings mode
global automotive sector,” said Saracho.
and put their payments on hold.” A local focus for private capital is therefore Mexico counts 4 million SMEs, most of
essential so more areas in Mexico can
which are small enterprises, according
specialize and become significant hubs
to the Organization for Economic Co-
for the global and national industries.
operation and Development (OECD). These
“Anchoring local capital is unbelievable
businesses, which represent 12.4 percent of
important,” said Liliana Reyes, Director
total gross production and employ almost
General, Mexican Assocation of Private
half of Mexico’s workforce, were badly hit by
Capital (AMEXCAP).
the pandemic. But big enterprises are also facing tough times.
This capital should focus especially on companies in their earliest stages of
For most companies cashflow became
development. “SMEs begin as efforts from
a major puzzle during the pandemic but
single entrepreneurs and startups, but they
now that the economic reactivation has
need a lot of support to be able to grow.
improved the panorama, liquidity continues
Who has not heard of Mexico’s five unicorns?
to be a problem. Financial experts agree
The reality is that these companies require
that access to funding is an ideal solution;
the attention of private capital to reach their
but it is not a straightforward one.
goals and grow,” she said.
22
C onfe r ence H ighlights Successful startups such as Cornershop and
cases, they have heard horror stories from
Clip were also backed early on, allowing the
family members,” said Lira. Banks can boost
platforms to become international success
their reputation by making client interaction
stories, said Reyes. But beyond support from
more pleasant and efficient by using online
private investors, blooming businesses need
tools and focusing on customer experience.
governmental support. “We believe that the
Financing institutions were able to comfort
government should be very concerned with
customers by being understanding of their
fostering investment,” she said.
situation during the pandemic, said McCoy.
The of private financing institutions should
Easy access to financing can be a boon for
not be understated either. Financiers did not
SMEs, said McCoy referencing Brazil’s case
come out of the pandemic unscathed: Lira
where businesses were able to access debt
estimated that demand for credit dropped
relatively easy. “We need to allow this to
by 3 percent. As the economy reactivates,
happen in Mexico too,” he emphasized.
banks can boost their own business and facilitate cashflow by taking a more flexible
A “close relationship” between finance
position in the market. “We can make asking
and companies is necessary for faster
for credit easier. Companies do not like to
operations, explained Reyes. “Business
banks. In the best-case scenario, they see it
cannot stop and wait (for investment). They
like asking an airline for a refund. In worse
need to grow immediately when they find an opportunity,” she said.
“Business cannot stop and wait (for investment). They need to grow immediately when they find an opportunity.”
A closer relationship stands to benefit both parties, said Lira. “Banks should be trusted advisors. The whole world asks for this but it is not a reality.” This can only be possible
Liliana Reyes
by addressing the major taboos permeating
Director General of the Mexican Assocation of Private Capital (AMEXCAP)
the financing world. “People should not be afraid of taking on debt, as long as the risks are calculated,” Lira explained.
COOPERATION: THE KEY TO INCREASING ECONOMIC COMPETITIVENESS Mexico has built a place for itself on the
a fully interconnected ecosystem,” said
international economic stage as a fully
José Román, President and Managing
integrated manufacturing center with
Director, Nissan Mexicana and NIBU. For
outputs increasingly linked to the broader
Mexico’s automotive sector, one of its
global economy. Mexico’s competitiveness
most productive industries, creating a
is multisectoral but, to continue growing
strategic mobility plan considering electric,
and strengthening its capabilities, the
autonomous cars, clean tech, subways,
country needs to look at the industry as
airports and trains will also be part of a
an ally, instead of an enemy.
smart recovery.
W h il e fo re ig n m at te r s m ig ht i m p a c t
Major concerns for the sector in Mexico and
Mexico’s economic competitiveness, there
abroad are climate change and sustainable
are several internal issues that both the
manufac turing . According to Román ,
government and industry must tackle.
companies in the auto sector are already
For the countr y ’s economic recover y,
working in more efficient engines and
“ joint wo rk b et we e n th e p rivate a n d
better-quality fuels, which are expected
public sector is essential, coupled with an
to further increase interest in Mexico’s
accelerated tech transition that fosters
manufacturing capabilities.
23
C onfe r ence H ighlights These capabilities are led by Mexico’s
A universal driver behind competitiveness
widely known high-quality talent, which is
is technology. Industry 4.0, for example,
one of the country’s greatest assets and
“ n ot o n ly b o o s t s o u r m a n u f a c tu r i n g
what has made it attractive for years. This
capabilities, but also helps avoid logistics
talent will catalyze competitiveness, said
a n d s u p p l y c h a i n d i s r u p t i o n s ,” s a i d
Beni López, CEO, Softtek US & Canada.
López. Tech must be promoted so that
These competitive labor costs have helped
the industry ecosystem can be improved
strengthen the nation’s manufacturing
systematically, he added.
base. In addition to producing sophisticated products for domestic consumption, the
To create and foster local tech, trainings
country has also evolved to become a
and education are also essential. Joint
robust exporter.
sponsorships for research and innovation centers can help scale in-house talent, said
To continue growing at this pace, education
López. Furthermore, creating innovation
needs a boost. In Mexico, “education is
and development centers can help the
underprioritized ,” said Rasmus Duun ,
country to be at the forefront of technology
G e n e ral M a nage r L atin Am e ric a , Th e
while supporting the implementation of
LEGO Group. “This is making the difference
factories and projects, said Roman.
b e t we e n c o u n t r i e s a n d t h e i r g l o b a l competitive advantage.”
The integration of North America has given a great advantage to Mexico by
Collaboration helps companies avoid
b o o s t i n g t h e d eve l o p m e n t o f m a ny
duplicating efforts and create better things
different industries. Tech, however, it is
together. An industry level alliance would
the key of success, so “we have to invest
allow companies to operate as partners,
in tech, regardless of the industry,” said
instead of competitors. By aligning on
Dunn. Investment in tech is becoming a
every industry, “we could ask for clearer
necessity, as was evidenced by the recent
rules and a legal certainty based on united
e-commerce boom. “ E-commerce is a
interest,” says López.
critical part of commerce now and in the future,” said Dunn.
Industr y leaders have struggled with th e l e g a l u n ce r t a int y in th e wo rkin g
“Mexico is already an attractive investment
environment, such as the recent, sudden
hub and competitiveness powerhouse
change in the outsourcing law. “Legal
but we compete with China, the US and
ce r taint y rules n e e d to b e cle a r a n d
India. This enhances the importance of
consistent; it is no secret that the current
caring for our current projects and our
public policies and regulations are
inhouse talent,” said Ana López Mestre,
changing overnight. Policies in Mexico
Executive Vice President and General
need to foment a transparent environment
Director, AmCham.
that is open to listen to industry concerns,” said Duun.
Under these circumstances, the USMCA will greatly benefit Mexico, said López.
“Mexico is already an attractive investment hub and competitiveness powerhouse but we
No sector of the Mexican economy has benefited more from the USMCA than manufacturers.
compete with China, the US and India. This enhances the importance of caring for our
The treaty attracted a significant amount
current projects and our inhouse talent.”
of FDI to help expand productive capacity
Ana López Mestre
and ramp up exports. The manufacturing
Executive Vice President and General Director of AmCham
sector accounts for almost 50 percent of total FDI in Mexico and 80 percent of total trade.
24
C onfe r ence H ighlights CLARA SIMPLIFIES EXPENSE MANAGEMENT As startup companies continue growing
tax deductibility and is only entrusted to
across the Mexican market, so does the need
key employees; self-financing expenses
to provide easier payment and financing
that rely on the company’s employees,
options for these companies, which is
which can make them anxious and lead
exactly what the startup Clara offers clients.
them to waste time chasing receipts and filling forms; or the use of a prepaid card,
“Each company can obtain revenue in any
which will not work abroad and might have
way but all have to make effective use of it.
limited funds. The shortcomings of these
And it is not only about making effective use
options can lead to countless hours spent
of revenue but doing it with agility. Some
closing books, a lack of real-time visibility,
believe that there is an ongoing tension
unchecked spending, poor planning, delays
between control and agility but we believe
and expensed distributed across silos.
that with technology, it does not have to be this way,” said Clara Co-Founder Gerry
Cla ra a llows s ta r tups to avoid th ese
Giacomán Colyer.
problems through a local solution where all the cards a company might need can
Giacomán saw the need for a company like
be generated using a process simplified
Clara during his time at Grow Mobility, which
through digitalization. Clara aims to build
grew at a rapid pace but ran into issues with
the end-to-end spend management solution
expense management, a problem that is
Giacomán would have loved to have during
even worse in Latin America. Companies
his start-up journey.
in the region are particularly in need of a dedicated expense management platform,
Clara’s flexible and endless card payments
which can reduce fund misappropriation
are available through three options: the
by 60 percent and aid companies in the
world elite cards with exclusive benefits
aftermath of the pandemic, said Giacomán.
for high-profile executives, virtual cards
A recent study found that 40 percent
for fine-tuned online expenses (software,
of companies in the region did not have
e-commerce or ads) and business cards
access to any type of financing to support
for travel and expenses for all employees.
business recovery.
Beyond cards, Clara offers a expensemanagement plat form with real-time
“We are very happy to have their trust and to be able to support the majority of startups and companies of most-rapid growth in Mexico and the region…”
expense visibility and a corporate credit card with a high acceptance rate and international coverage. Clara further offers a payment (SPEI)
Gerry Giacomán Colyer
platform to send or schedule as many
Co-Founder and CEO of Clara
payments as a company may need. The platform also allows users to use Clara credit and make payments from an Excel file, their invoices or manually. “Let’s say I have a list
“ To m a n a g e e x p e n s e s , c o m p a n i e s
of 100 payments and I want to program
traditionally used different options that
some for today, some for a week from now,
have great limitations,” said Giacomán.
some a month from now, I can do all of that
These options include applying for a
in just one step through Clara’s solution,”
domestic corporate credit card, which
Giacomán said.
tends to be rejected due to a lack of credit history or positive cash flows and has
Clara was built from the ground up to help
limited functionality; the use of a foreign
local companies become more efficient, said
corporate card, which tends to lose local
Giacomán, and wants to be local companies’
25
C onfe r ence H ighlights biggest ally. It offers automatic expense
The startup secured Series A investment
and invoice matching. Furthermore, its
backed by top regional and global investors
principal member license ensures service
Kaszek, Monashees and DST Global, which
stability, it is fully-compliant with local AML,
are the founders behind most startup
KYC and banking laws, it offers direct debit
success stories in the region such as Rappi,
payment from local banks and enables tax
Kayak and Casai.
deductible expenses. “We are very happy to have their trust and to The adoption of Clara has been rapid due
be able to support the majority of startups
to a large demand for its services. Weekly
and companies of most-rapid growth in
Mexican CC and TPV transaction accounts
Mexico and the region… We started in Mexico
have risen impressively, with giant leaps
but we have prepared from the beginning
observed during the past three months. The
and now we are very close to announcing
startup has a clear line of sight to continued
plans for growth in other countries. We
rapid growth. Its key product releases include
are very happy to provide our grain of
Clara Payments and Clara Credit. Liquidity
sand to help local companies become
advance and a launch with MasterCard are
more competitive through technology and
allowing growth across region.
through the experiences that we create.”
MEXICO’S VIRTUOUS ECOSYSTEM: A STARTUP DREAM In Mexico, “the stars have aligned. Capital
geographic appeal, internal conditions in the
access, ambitious entrepreneurs and a
country have also changed, turning Mexico
diversified talent pool”, all the necessary
into a favored strategic business entry point
components for a vibrant and innovative
for businesses of all sizes.
startup ecosystem have emerged, said Nima Pourshasb, CEO & Co-Founder, Minu. These
Previously, access to venture capital was
favorable conditions have led to a start-up
difficult and limited to about US$27 million,
boom, which has been sustained thanks
which in turn shut out the participation of
to a unique community of entrepreneurial
businesses with the potential to disrupt
mentors who have inadvertently created
stagnant industries. Since then, however,
a self-feeding ecosystem that has drawn
this figured has ballooned upward of US$10
investment and talent from all corners of
billion coming mainly from the US said
the world.
Alejandro Diez Barroso, Managing Partner, DILA Capital. Consequently, this has allowed
“In Mexico, the stars have aligned. Capital access, ambitious entrepreneurs and a diversified talent pool”
start-up businesses to join a market that was previously reserved for large companies. Their entry into the market, coupled with a growing middle class with a disposable
Nima Pourshasb
income, has generated a dynamic economy
CEO and Co-Founder of Minu
in Mexico that has driven innovation at an incredible speed. Mexico City in particular is an important
Before this favorable environment emerged
hotspot, “it is a country within a country. It is
however, Mexico had typically been selected
possible to build a successful business in one
as a starting point for many international
city alone due to the population density. It
businesses based on geographic proximity
is as if New York was combined with Silicon
to the lucrative US market, with whom it
Valley. It is very unique” said Sujay Tyle, Co-
shares a free trade agreement with since
Founder & CEO, Merama. Other important
1994, in addition to access to the wider
metropolitan centers include Guadalajara
Latin American market. Beyond this obvious
and Monterrey. “If you thrive in these cities,
26
C onfe r ence H ighlights you are sure to thrive in all of Latin America,”
has attracted and successfully drawn in
said Ivan Ariza, Founder & CEO, Cargamos.
international talent from adjacent business sectors, which inversely has contributed to
T h e s t a r t- u p s e c t o r h a s e n j o y e d
a more dynamic and innovative workforce.
sustained growth mainly due a unique sense of community between CEOs and
Within Mexico’s dynamic start-up business
entrepreneurs who, through investment
sector, fintech has emerged as a leader,
and mentoring, have continued to impulse
driven mainly from popular dissatisfaction
the sector forward. “Second and third-time
with traditional tools to access capital, from
founders are coming forward from other
which many people have been excluded.
successful companies to invest and/or build
Although previously resisted, innovation
businesses on recognized market needs that
of the fintech infrastructure has evolved
their predecessors failed to address,” said
to provide consumers with greater safety
Alan Karpovsky, Co-Founder, Mendel.
and purchase assurance, which has already boosted other domestic sectors such as
B eyo n d m o n et a r y i nve s tm e nt , C EO s
e-commerce and retail. Undoubtedly the
and founders are mentoring their own
sector got a boost from the COVID-19
employees to develop the business leaders
pandemic that forced many onto digital
of tomorrow by nurturing their skills and
platforms, which will continue expanding
giving them a realistic picture of business
now that people have recognized their
environment in Mexico. This fraternity
accessibility and convenience.
HOW CAN STARTUPS RIDE THE INVESTMENT BOOM? Startups in the Mexican and wider Latin
formalizing rapidly. Digital startups benefit
American ecosystem are living through
greatly from this development,” said Diego
an investment boom. But even within this
Serebrisky, Co-Founder & Managing Partner,
soaring environment, critical success factors
Dalus Capital.
determine which companies get funded. Mexico’s venture capital experts argue that
“The numbers do not lie: at the end of
startups focusing on the right technology
September, we received US$12 billion in
for growing sectors, with solid strategies
our regional startup ecosystem. This is
and governance, are likely to be successful.
much, much more than we received in the past,” said Muradás. This great environment
“This is the best time in human history to
provides great opportunities for investors
begin a startup,” said Diego Muradás, Co-
to o . “ We a re livi n g i n a s p e c t a cu l a r
Founder & CEO, insurance startup Zenda.la.
moment to be an entrepreneur. Today if
The reasons are simple: there is significant
you do not make money there is something
liquidity available to invest in startups and
fundamentally wrong with your company.
the pandemic greatly increased the speed
There is plenty of money to make in the
of digitalization. These circumstances have
world of entrepreneurs,” said Camilo Kejner,
created an environment where innovative
Managing Partner, Angel Ventures.
startups excel. “The digital economy is This is great news for Mexico’s startup
“We are living in a spectacular moment to be an entrepreneur. Today if you do not make money there is something fundamentally wrong with your company.”
Camilo Kejner Managing Partner of Angel Ventures
scene, although its tech companies are not as recognized as those of other countries. While the US’s Silicon Valley is an obvious example, Brazil’s tech companies have also gained popularity with international investors. However, Brazil is not necessarily ahead of Mexico. “Brazil has been better at marketing its startup sector to large
27
C onfe r ence H ighlights i nve s t m e n t f u n d s ,” s a i d Ke j n e r. B u t
are looking for startups in health, city
Mexico’s tech startups are much more
applications and e-commerce or other online
advanced, he added.
consumption avenues. Other industries will soon follow. “We will experience investors
Boosted by several unicorns, the Mexican
moving away from traditional industries
market is gathering steam. “Mexico is
toward digital economies in virtually all
behind in the region but is catching up very
sectors of the economy,” said Serebrisky.
quickly,” said Paqui Casanueva, Chairman,
Nevertheless, some market developments
NGO Endeavor México. “This is good news
will be deemed more necessary than others
for Mexico and entrepreneurs everywhere.”
and therefore attract more liquidity coming from the investment boom. “An area where
As Mexico’s reputation grows, big capital is
we will see major investments is in startups
catching on. But how can companies ensure
that will reduce climate change,” added
they do not miss the capital train?
Serebrisky.
To get investment, companies need a clear,
Tech startups, however, are expected to
concise long-term strategy to show to
keep a special place in investors’ minds.
investors. “Venture capital favors startups
“Deep tech startups are receiving a lot of
with significant clarity in their ideas, followed
attention because they can solve substantial
by a catchy narrative and later translated
scientific or engineering challenges and fit
into an effective strategy,” stated Antonia
in neatly with future trends like blockchain
Rojas, Partner, ALLVP, a private equity firm.
and web 3.0,” said Rojas.
Venture capital experts agree that these
W h e n l o o k i n g fo r f u n d i n g , m atu ri n g
factors help boost a startups story and
startups can make a big impact with initial
therefore improve its acceptance among
public offerings (IPOs) on stock exchanges.
i nve s to r s . A s o l i d a p p r o a c h tow a r d
But this is not the best option for every
environment, social and governance matters
company. “Institutional investors and public
must also be taken into account from day
markets need to see that your business has
one so it permeates company culture,
merit for a good IPO,” said Casanueva.
argued Casanueva. Nevertheless, companies should not become bogged down by their
“If startups do choose to get listed, they
own politics. “Compliance should not turn
often choose the US’ NASDAQ instead of
into complicated-ness,” he said.
local options, a sign that the market is not yet mature yet,” said Casanueva. Nevertheless,
Other than solidly sustainable management,
Mexico’s stock markets can become more
investors are attracted to businesses that
robust and become a great intermediate
can grow rapidly, both in the local market
step for startups. “Not every company
and elsewhere. “As an investor, you want fast
needs to move in the US,” added Muradás.
and scalable companies, who can deliver results in other countries,” said Casanueva.
There are many reasons for optimism in future listings, said Rojas. For early
“Investors are no longer just looking for
investors, exits do not always translate to
fintechs,” said Muradás. Venture capitalists
massive paydays but this is slowly shifting. “If you look at the sales of Cornershop to
“As an investor, you want fast and scalable companies, who can deliver results in other countries.”
Paqui Casanueva Chairman of NGO Endeavor México
Uber and Auth0 to Okta, you see Latin American startups being sold for billions of dollars. No one would have imagined this some years ago,” she said. Whereas there are still plenty of challenges ahead, many more startups from Mexico’s ecosystem could see similar successes.
28
C onfe r ence H ighlights FINTECH: ANSWERING CONSUMER’S IGNORED REQUESTS From long lines at the bank to high interest
consumer by driving up market competition
rates, the average consumer in Mexico is
in a sec tor that was complacent and
fed up with the traditional banking system.
reluctant to change.
Recognizing this unaddressed market need, fintechs rose to the challenge and captured
Fintechs’ emphasis on business to consumer
a large market. Now they have to grapple
services has driven the rapid growth of
with their success.
many companies but this is not to say that they will completely replace traditional
“The Mexican market is screaming for
banks. “Undoubtedly, alliances between
disruption in its financial and banking
both parties will have to emerge because
markets. This is why so many startups and
the banking infrastructure traditional banks
fintechs are coming to Mexico, since they
created will not disappear overnight,” said
can provide better products and services,”
Stefan Moller, Co-Founder & CEO, Klar. An
said Aitor Chinchetru, Founder and Co-
example of this is user demand of cash-
CEO, Fintonic.
outs, which require physical infrastructure that fintechs do not have and is expensive
Traditional banks’ continuous reluctance to
to install.
provide better customer service, coupled with their disinterest in providing financial
Challenges still abound, however. Fintechs
services and capital access to the greater
have to comply with a regulatory system
Mexican population, has come at a cost in
that is incomplete and unprepared to
the era of digitalization. Fintechs have turned
address the needs of the sector. Fintech
Mexico’s traditional banking model on its
regulations are still evolving, posing a
head, accelerating the democratization of
further challenge that does not concern
access to capital that has been historically
traditional banks. This requires individual
available to only a small percentage of the
fintech companies to formulate robust
population. For the average person, banking
and ethical growth strategies with the best
translates to high interest rates and a low
interest of their consumers in mind. To do
rate of credit card holders. “Only 15 percent
so, companies are placing a salient emphasis
of Mexican citizens have access to credit
on cybersecurity that in necessary to avoid
cards and most of them are high income
security breaches and maintain consumer
earners. People should have other options
co n fi d e n ce . “ D i s r u pto r s h ave b e t te r
to build a credit history,” said Marlene
technology, especially in cybersecurity,
Garayzar, Co-Founder, Stori.
and we have changed users’ relationships with financial institutions,” said Moller. While
The nascent fintech sector found significant
companies can attempt to cover all their
success by disrupting the traditional banking
bases, they are still exposed to the risks of
model that had limited finance services to
a volatile regulatory environment.
a select few. As market disruptors, fintech companies have deliberately made the
Despite challenges, a revolution is necessary.
financial services market better for the
“ O n l y t h ro u g h p u s h i n g t h e ex i s t i n g limitations can we expect structural change,
“Only 15 percent of Mexican citizens have access to credit cards and most of them are high income earners. People should have other options to build a credit history.”
Marlene Garayzar Co-Founder of Stori
otherwise we can only expect marginal change,” says Pablo Viguera, Co-Founder and Co-CEO, Belvo. Regardless of company stance, they all benefit from learning and adhering to their clients demands. This is the only fireproof way companies can expect to survive this constantly fluctuating environment.
29
C onfe r ence H ighlights PROVIDING VISIBILITY, ORDER IN AN EXPANDING MARKET The commercial environment changed
of logistical lags and data collection .
drastically during the age of digitalization
This is particularly important in a market
and while it expanded businesses’ market
that will keep changing in response to an
access , it also reduced their viabilit y
evolving consumer.
as more business avenues spring up. In recognition of this problem, Vtex created
In the age of digitalization, consumers
an omnichannel solution and pathway
have evolved, making the traditional price
toward unified commerce for the complete
market obsolete. Today ’s consumer is
centralization of business data currently
not the passive consumer that singularly
disp e r se d a cross va rio us third - p a r t y
focused on the lowest price while
platforms.
waiting for the market to provide them with solutions. Present consumers are
“The unified customer’s strategy focuses on
informed and self-aware, they assess
creating a shopping experience that fully
quality in relation to price, are not afraid
meets the needs of new consumers,” said
to create market solutions where they
Ricardo Rodríguez, Vice President Enterprise
are absent and genuinely care about how
Sales, VTEX Mexico & Central America.
products are made and how they impact the environment. In acknowledgement of
The commerce market has rapidly
this market shift, the objective is to create
expanded outward from physical stores
a shopping experience that satisfies the
to th e inte rn et, va rio us so cial m e dia
expectations and needs of the informed
platforms , marketplaces and most
consumer. Before this can be achieved,
recently livestreams. While this horizontal
however, companies need to know who
expansion has made commerce more
and where their consumers are, which can
complex, thriving is not impossible, argued
be difficult if consumer data remains out of
Rodríguez. Through the collection and
reach and uncoordinated.
centralization of data related to business assets and consumers, companies will
The most pressing consumer need is
effec tively gain greater visibilit y and
thank fully ac tionable, as it relates to
control over their business, starting with
i nte r n a l m o n ito ri n g a n d d ive r sif yi n g
more seamless operations and distribution.
consumer payment options. “More than 40 percent of unfulfilled sales are due to
Companies will also be able to recur to
stockouts or because the company was not
a greater pool of consumer data needed
able to provide additional buying options,”
to understand changing consumer
said Rodríguez. Without the ability to
preferences, tailor intelligent company
easily track internal assets, companies
campaigns and take informed business
have inadvertently shut themselves out of
decisions. Holistically this will increase
certain transactions because of stockouts,
r u n n i n g e ffi c i e n c y, th e re by a l l ow i n g
which could have informed secondary
business to focus on innovation instead
decisions about price increases, mobilizing production or suggesting similar products
“More than 40 percent of unfulfilled sales are due to stockouts or because the company was not able to provide
if they had been identified earlier. Moreover, companies with limited payment options have shutout new potential consumers.
additional buying options.”
Overall, in a complex and horizontally
Ricardo Rodríguez
expanding commerce market, the
Vice President Enterprise Sales of VTEX Mexico and Central America
centralization of data offers companies greater visibility and control over their business to better access new consumers.
30
C onfe r ence H ighlights DELIVERY, CX DETERMINE OUTCOME OF E-COMMERCE BATTLE E-commerce experienced unbelievable
on the importance of technology. According
growth during the past two years, boosted
to Geisen, “the winners and those able to
by an unusual mix of circumstances .
retain clients are companies that offer
Analysts expect the boom to continue.
the best customer experience.” And there
Mexico’s leading e-commerce players state
are a few factors that ensure a client is
that enhanced delivery times and spotless
contented: the best offer, availability of
customer experiences will decide which
products, the lowest price and fast delivery.
platforms users will gravitate toward.
For this reason, Mercado Libre offers over 50 million products on its Mexican platform
The global pandemic set off explosive
alone. Alejandro Solís, Director General
growth for online sales. Data from Google’s
México and Costa Rica, Rappi, highlighted
Euromonitor shows that e-commerce is
that availability throughout all of Mexico is
not just here to stay but will continue its
important but sales are also key. “Varied and
expansion with a 225 percent growth up
segmented promotions help to retain users
to 2025. “We are living in times of fierce
and possibly get back the ones that had a
competition and huge possibility to grow,”
bad experience,” said Solís.
said Alvaro de Juan Iriarte, CEO, iVoy, a delivery service company. In the battle for the
Client retention, however, is not the end all
optimal market share, companies are forced
solution, said Marinus van Gestel, Head of
to modernize rapidly and continuously.
Latin America at Uber’s recently acquired
Offering fast and efficient delivery and
Cornershop app. “Client retention is less of
meeting client expectations are the crucial
an issue standing on its own and more about
demands to be met in this process.
streamlining the purchasing process in general,” he said. This includes easy logins,
“Everyone is innovating constantly,” said
simple one-click payments and integration
Ignacio Caride, SVP eCommerce, Payments
b et we e n a p p s . B e c a u s e C o r n e r s h o p
and Financial Services Mexico & Central
employs pickers, people that seek out the
America, Walmart, told MBN. In the past,
goods in supermarkets and then deliver
companies such as Walmart would be
them to clients, their unavailability can
able to offer multiple-day deliveries and
cause friction. These potential put-offs need
clients would be satisfied. Now, potential
to be removed via smooth communication
customers expect same-day deliveries at
between picker and customer. If clients
least, with some even wanting to see their
are satisfied, other e-commerce platforms
products arrive within the hour. To meet
can benefit further. “Good experiences are
this stringent demand, new technologies
essential for other e-commerce efforts too.
a r e e s s e n ti a l : “ We c a n i m p rove t h e
If people consistently like their experience,
purchasing and delivery process every day
they will purchase other goods online too,”
by using technology, as well as lower costs,”
said Geisen.
Caride said.
Pressure to Deliver David Geisen , Countr y Manager & VP Marketplace Mexico, Mercado Libre, agrees
The experts see that delivery times are an especially important skirmish within
“Client retention is less of an issue standing on its own and more about streamlining the purchasing process in general.”
Marinus van Gestel Head of Latin America at Uber
the wider battle. “We are obsessed with the idea of reducing delivery times. In our surveys, 70 percent of users really value that their products arrive within 48 hours,” Geisen emphasized. To make this happen, Mercado Libre relies for 84 percent on its own, recently constructed logistics network.
31
C onfe r ence H ighlights For Solís’ Rappi, some verticals cannot be
populated zoners. Van Gestel argues that
fully controlled as per their nature. Food
for Cornershop, Q-commerce is not as
deliveries, for example, rely on restaurants
important as offering a wide catalogue of
to prepare food and delivery drivers to
products with reasonably fast deliveries.
move it to the customer. Despite the
“It is an interesting development, but it
obvious challenges, Rappi does what it can
is too early to see if it is really essential,”
to take control of the process. “We predict
he said, underscoring a Goldman Sachs
cooking times and factor in issues that
study that revealed that only 5 percent
could complicate delivery such as rain,”
of China’s mature e-commerce market
he said, adding that complying with client
n e e d s Q - co m m e rce d e live r y sp e e d s .
expectations is essential.
When prompted to pay more, many clients appear to be happy with one-hour deliveries
Indeed, not everything needs to move at the
instead.
same pace. “There is a difference between delivering an urgent missing ingredient
“People see something in it, but I am not a
and planned purchases so these issues
major believer,” highlighted Caride. Like van
have different cost attached to them. Not
Gestel, he said low prices and reasonable
everyone needs their weekly groceries or
delivery speeds are more important for his
a brand new flatscreen TV within the next
company. “Just like in China, we see that
hour,” explained Caride. For this reason,
Mexicans prefer to wait a bit longer instead
Walmart delivers most of its products and
of paying more, except in rare urgent cases,”
groceries in less than 3 hours. Flexibility and
stated Caride.
communication with the client are essential to strike a balance between cost and
Geisen does think that for products other
convenience, said De Juan Iriarte: “iVoy can
than groceries, it is important to deliver as
be incredibly fast, but faster deliveries cost
fast as possible. But how quick the process
more. We need to ask what clients want to
goes is limited by the proximity of products
pay in return, or who else will foot the bill.”
in warehouses to the location of end-users. For this reason, Mercado Libre tracks these
This shifts the focus to extremely quick
locations and seeks to be able to accurately
commerce, or Q-commerce, which delivers
estimate exactly how fast the company can
within 15 minutes. “ We are seeing this
distribute by enhancing the visibility off
grow rapidly elsewhere in the world and
the process.
companies are raising capital to make it a success. It is important for us to be a part
E- co m m e rce co m p a n i e s co nti n u e to
of this development, though we need to
innovate to become more sustainable too.
be careful to not blindly follow trends,”
Electric vehicle (EV) fleets, possible drone
said Solís, pointing to Rappi’s Turbo-Fresh
deliveries and sustainable packages are just
service, which works efficiently in densely
some of the main developments available.
DIGITAL EXPERIENCES: THE NEW MARKET DIFFERENTIATOR
32
C onfe r ence H ighlights On the era of interconnectivity, companies
and interaction with other people and
had to shift their business models to adapt
brands,” said Montalvao.
and respond to the population’s new demands, which are based on a need for
A c c o r d i n g t o A d o b e , a c o m p a n y ’s
real-time digital interaction at virtually every
“must-haves” for customer experience
moment in life.
management include actionable experience data, dynamic content, seamless customer
In this new panorama, “products alone are
care, real-time decisioning, optimization
not the basis of differentiation anymore,”
and collaboration. These are the main
explained Douglas Montalvao, Experience
issues customers and competitors are
Cloud General Manager for Hispanic Latam,
talking about, said Montalvao. “If you do not
Adobe. “ Businesses must now deliver
deliver on these basic elements, you are not
great experiences to win in an increasingly
delivering positive customer experiences. In
competitive world and exceed client’s ever-
Adobe, we are the only technology company
increasing expectations at every point in
in a position to deliver on this at scale.”
the journey.” Adobe’s transformation was seen through Creating experiences for the customer
its flagship product, Photoshop, which went
requires of personalized approaches, “to
from a single in-person software purchase
date it is not enough to base (developments)
bought physically to an online subscription-
on focus groups sorted by gender or age,
based model that is cloud-based and offers
companies need to know the exact interest
direct contact with the company.
of an individual client to offer the experience they would enjoy,” said Montalvao.
To operate this novel ser vice, Abode developed Adobe Experience Cloud, which
T h e U S h a s s e e n a g i g a n ti c s h if t i n
Montalvao describes as the industry’s most
experience-related spending, as individuals
comprehensive solution for marketing,
spend four times more on experiences than
adver tising, analy tics and commerce,
on physical goods, found a study by Adobe.
serving both B2C and B2B customers.
Individuals spent 6.3 percent of their income in experiences, compared to 4.7 percent in
“Experience Cloud allows you to deliver
services.
exceptional experiences from creation all the way through monetization and
To successfully create an experienced-
acquisition through renewal. It has played
based product, business conversations need
a pivotal role in transforming industry after
to revolve around audiences, campaigns,
industry. Whether it is financial services
journeys and lifetime value. “Consumers’
reimagining digital customer journeys or
digital days and journeys are much more
the world’s largest hotel chains delivering
complex nowadays. They go beyond the
personalized hospitality, Adobe Experience
control of companies due to the multi-
Cloud has become the ‘experience fabric’
screens, options, social networks, reviews
for the digital world.” Adobe’s journey has been one of the most
“Businesses must now deliver great experiences to win in an increasingly competitive world and exceed client’s ever-increasing expectations at every point in the journey.”
globally recognized digital transformations. It was named the second deepest transformation of the decade by Harvard Business Review. Adobe was considered to be the second largest software company
Douglas Montalvao
in the world by value. The company was
Experience Cloud General Manager for Hispanic Latam of Adobe
named the one that prospered the most during the pandemic. “Our transformation drove our market value to go from US$19
33
C onfe r ence H ighlights billion to US$222 billion in a period of five
channels. “We are turning real-time omni-
to six years,” said Montalvao.
channel customer experiences into reality; we update 970 million customer profiles in
Data is the primary factor behind this
real-time on Adobe Experience Platform
successful transformation. “Many companies
and moved from 72-hour data refresh cycle
have huge databases that simply do not
to a 10 seconds period.”
get taken advantage of, we call this a data graveyard.” Montalvao said that the smart
Adobe Experience Platform is leading
use of data using new activation channels
a multi-industry digital transformation,
creates new opportunities to communicate
according to Montalvao, ranging from
with well-known customers in their preferred
banking to sports.
LEVELING THE PLAYFIELD WITH DIGITAL PAYMENTS M ex i c o ’s b a n k i n g i n f r a s tr u c t u re h a s
47 percent growth into the next year with
undergone a radical change with the arrival
1.23 million, where most of the operations
of fintech companies that have come disrupt
consisted of amounts below MX$8,000
a stagnant finance ecosystem. Spurred
(US$387). This bracket alone experienced
by a climate of competition, Mexico’s
a 72 percent growth from 2019, indicating
central bank (Banxico) is doing its part to
the incorporation of smaller market players.
increase inclusion among those who have been traditionally excluded from financial
It is expected for the digital transformation
services through the use of CoDi.
to continue supporting the expansion of this financial service, which is within the
“Our objective is to provide the conditions
reach of approximately 80.9 million people
so all businesses can compete under the
with access to smartphones, according to a
same guidelines and rules of the game,”
study by National Institute of Statistics and
said Miguel Diaz Diaz, Banxico. CoDi is a
Geography (INEGI). In 2020, approximately
digital payment platform meant to even
17.8 million Mexicans realized a banking
the playing field and increase competition
activity through an application on their
within the county’s domestic commercial
smartphone. It is Banxico’s hope to incite
market. Although electronic payments
the other 63 million who own a smartphone
have been supported by the Electronic
to become senders and recipients of
Interbank Payment System (SPEI) since
electronic payments through the simple,
2007, their widespread adoption has been
non-presential adoption of CoDi.
slow but exponentially incremental. While digital services have been widely resisted
“Banxico plays a key role in promoting
in Mexico, the COVID-19 pandemic left
electronic payments across the country,”
businesses without recourse, leading them
said Diaz.
to widely adopt digital services. C o D i i s c h a r a c te r ize d by f o u r m a i n From 2019, when SPEI realized 834,000
components: efficiency, security, 24/7
transactions, the organization observed a
access and zero cost. The application was designed specifically to draw in the informal
“Our objective is to provide the conditions so all businesses can compete under the same guidelines and rules of the game.”
market, which is still heavily relies on cash payments stemmed from an unwillingness to adopt digital payment services because of the commission rates. The app is easy to
Miguel Diaz Diaz
use, free and provides immediate liquidity
General Director of Payments Systems and Market Infrastructures at Banco de México
in comparison to 24 -4 8 hour waiting periods associated with other providers. Moreover, since this finance infrastructure
34
C onfe r ence H ighlights is maintained by the central bank consumers
the barriers that had previously barred the
can be confident that their information is
informal market from participating and
secure. In essence, Banxico has removed
using electronic payment services.
TACKLING E-COMMERCE FRAUD WHILE RETAINING GOOD CUSTOMERS Mexico’s e-commerce has never grown so
busy times such as the consumer-focused
fast, with an 81 percent increase in volume in
deals of the Hot Sale and the Buen Fin.
2020 compared to the previous year. But the
Emilio Vázquez, Senior Director Merchant
explosive growth comes with an increased
& Acquirer Solutions, VISA , sees that
risk for fraud. Now, companies need to
companies are perhaps not taking enough
carefully balance risk prevention with
measures. “In the meantime, the number of
optimal consumer experiences. Payment
channels for delivery and communication in
security experts agree that by identifying
which fraud can occur only increase. This
good customers and adopting new tech, the
alters the situation drastically,” he said.
industry can make headway. “Companies should look out carefully for The pandemic truly kicked off the move
fraudulent practices but there are a lot of
toward e-commerce in Mexico, where now
challenges they need to overcome,” said
close to 10 percent of all retail takes place.
Victor Islas, Country Manager, ClearSale
This makes Mexico the fastest-growing
M ex i c o . I n d u s t r y i n s i d e r s , h oweve r,
e-commerce market in Latin America,
emphasize the risk of being too careful
although this development did not happen
in the face of fraud and thereby hurting
spontaneously. “Previous years of hard
good customers. “Figures show that about
work have made the move to e-commerce
35 percent of online orders are declined.
possible. Mexico’s online ecosystem is now
Between 30-60 percent of this group are
quite robust and even developed strongly
good customers,” McKinney explained.
before the pandemic,” said Pierre-Claude Blaise, CEO, AMVO. Yet as online activities
It is essential to identif y those good
grow, so does online fraud.
customers, said Christian León, Regional Director Latin America, Signif yd. “ We
“ T h e b i g g e s t c h a l l e n g e fo r M ex i c a n
have a major opportunity to identify new
companies is reaching the goal of having
e-commerce users and give them a good
less than 1 percent fraudulent transactions,
check-out experience so that they will return
as dictated in international guidelines,” said
often.” Nevertheless, this is complicated
Erick McKinney, Country Manager México,
by f ra u d ’s in cre a sin gly co m plex a n d
Adyen. Doing so is easier said than done.
sophisticated trappings. “The amount of risk
CONDUSEF, a regulatory body that defends
you can take on is also significantly different
users of products and financial services, has
for SMEs compared to big companies,”
seen a massive increase in reported fraud
added Blaise.
over 2020, a trend that continues into 2021. McKinney emphasized that companies need
So, what does this risk look like in Mexico?
to diversify their strategy and prepare
According to Léon, fraud is taking up 1-2
to tackle irregularities, especially during
percent of e-commerce’s total costs. This makes Mexico once again the highest-
“Figures show that about 35 percent of online orders are declined. Between 30-60 percent of this group are good customers.”
ranking country in the region but costs are in fact higher. “The total cost is actually 3 percent if you sum up total implicit costs, because you lose more than just your
Erick McKinney
product. Administration can be expensive,
Country Manager México of Adyen
just like investing in anti-fraud measures,” he said. McKinney stressed that losing money
35
C onfe r ence H ighlights because of fraud is inevitable but companies
Léon highlighted that companies can use
need to find a good balance between
tools that track behavioral data. Fraudsters,
security and an easily navigated system.
after all, do not use a website the same way
“Many companies would rather invest in
as regular customers and AI or machine
other areas to improve their customer
learning tools can help identify problematic
experience or offer at the end of the day,”
visits, while supporting the correct real-time
he argued.
decisions.
Islas knows the risks of losing customers:
Furthermore, standardization of these tools
“If you have a high false decline rate, you
is important, according to McKinney: “Global
lose a lot of potential lifetime customer
standards can help prevent fraud,” he said.
value. About 58 percent of falsely declined
“It is also important to not try and reinvent
customers do not come back and choose a
the wheel, which Mexico’s ecosystem often
competitor.” Reputational damage can also
tries to do,” he added.
be a problem. “People are vocal about bad experiences and complain online,” said Islas.
Preventing fraud requires active approaches
“Payments are part of a good customer
from all stakeholders involved. “We need to
experience,” agreed Blaise.
align all these different players if we are to prevent fraud from happening,” said Islas.
To solve the issue, experts are turning to
“For the first time we have a chapter in the
technological developments. “Tech is key:
USMCA related to cyber criminality, this will
machine learning and AI can be utilized to
push the Mexican government ahead. It is
make fast real-time decisions instead of a
not a Mexican problem, after all, it is a global
costly and slow manual review,” Léon said.
issue,” said Blaise.
But this implementation should not go at the expense of the customer, warned Vázquez:
The issue will not be solved any time soon,
“We have to put more focus on customer
because fraudsters will continue to find new
experience design and provide all the
loopholes and trick the system. Nevertheless,
elements we need for safety seamlessly.”
the problem can be combatted. “We feel
Tools such as network tokenization can help
that e-commerce players will be better
companies improve their operations.
prepared for next year,” said Léon.
CRYPTOCURRENCIES PUSH INTO THE MAINSTREAM Cryptocurrencies, and Bitcoin in particular,
which will likely continue to be the case
are increasingly becoming a feature of the
until they achieve price stability and market
modern financial market. The possibilities
acceptance, forecasts PwC.
that arise from this technology have driven most of their current market capitalization,
The disruption of the traditional financial market, propelled by cryptocurrencies, has deepened due to the wider use of big data analytics, decentralized payments, peerto-peer platforms, electronic transfers and mobile access to financial services. These tools have changed the way people save and spend. While their role in disrupting the market is pronounced, they are still seldomly used by individuals. Latin America has historically depended on cash for payments and transactions. The region has still a lot of room to grow
36
C onfe r ence H ighlights overcome in terms of bank penetration and
assets need a trusted third party to provide
financial services, explained Javier Martínez,
verification of the transaction.
Chief Product Officer, Bitso. Cryptocurrencies have boomed in the last The traditional financial system ruling Latin
couple years and now are available all over
America has proven to be non-inclusive
the world. They have fewer intermediaries
and to perpetrate economic inequality.
and lower costs, thereby creating greater
For example, only 47 percent of Mexico’s
financial inclusion . Additionally, they
population has a bank account, according to
claim to be more efficient than traditional
the Mexican National Institute of Statistics
financial methods.
and Geography (INEGI). The bulk of the population that do es have access to
Cryptocurrencies could play an important
financial services lives in urban areas that
role in countries that have been troubled
have a medium to high level of income — the
by the regressive effects of inflation and
population residing in cities is 9.3 percent
capital controls, such as Venezuela and
more likely to perform banking operations
Argentina, explains Adriana Villaseñor,
than those in rural areas. These data points
Corporate Development Lead, Bitso. In
are comparable to other countries in Latin
these countries, using cryptocurrencies
America, where in aggregate 85 percent of
as a store of value can help bypass the
transactions are carried out in cash.
erosion of purchasing power. This can be accomplished not only via commonly
This is compounded by further deficiencies
known crypto assets such as bitcoin, but
in financial education, which inhibit people
also through stable coins, which are less
from tracking expenditures, increasing their
volatile and enable exposure to traditional
savings and, ultimately, accumulating wealth.
fiat currencies. Furthermore, as a borderless means of exchange, cryptocurrencies also
As in every other industry, tech is offering a
offer an alternative to interact with the
democratization of services. From financial
global economy.
to health services, digitalization can lead to accessibility. In the financial sector,
The adoption of bitcoin has been exponential;
this democratization is being brought by
it grew by 881 percent just last year, mostly
cryptocurrencies.
through the use of P2P payments, according to Villaseñor. Stable coins, which are those
Blockchain technology is what makes
whose value is tied to a fiat currency, offer
cryptocurrency such an attractive solution.
the benefits of cryptocurrencies with the
This is a network or a distributed ledger that
characteristics of fiat currencies, so users
allows two parties to make a transaction
can be sure of their regulatory status. “Stable
without an intermediary. The latter has been
currencies allow one to open accounts, in
shown to have the potential to disrupt a
dollars for example, using less expensive
wide variety of transactions. Intermediaries
and faster global transactions,” explains
are also a core of the traditional payments
Villaseñor.
system as stocks, bonds and other financial Bitso is the only fully regulated cryptocurrency operator in Latin America
“Today we have obtained the first and, so far,
and had a leading role in the elaboration of
only fintech license in Mexico, ahead of 94
Mexico’s Fintech Law. “We played a key role
other applicants, some of which were large
since 2016 by lobbying for regulatory clarity.
companies like Mercado Pago and Uber.”
Today we have obtained the first and, so far,
Adriana Villaseñor
only fintech license in Mexico, ahead of 94
Corporate Development Lead at Bitso
other applicants, some of which were large companies like Mercado Pago and Uber,” said Villaseñor.
37
C onfe r ence H ighlights D ue to it s market success , B it so has
“Investors are increasing their trust in
become a leader in this market. Its inclusive
cryptocurrencies and immediately turn to
solutions have allowed them to build a
us as a leading option, we lead the C Series
3-million-user strong community. It is the
investment round of Tiger and Coatue,
largest and most liquid exchange, offering
which will be used to begin our expansion
the best prices and user-friendly products,
to Colombia, as we just opened in Brazil,”
said Villaseñor.
said Villaseñor.
BREAKING GROUND WITH REMOTE 5G APPLICATIONS Although the rollout of 5G net works
and increasingly obsolete. Updating this
has been disproportionally thwarted by
inflexible infrastructure can get expensive
th e COVI D -1 9 pa nde mic in e m e rging
and it does not offer the option of adding
economies, formerly hesitant businesses are
other technologies or added ser vices
now seeking to adopt digital technologies,
without compromising the speed of the
looking increasingly for added value beyond
network. This is particularly important
faster speeds. Nevertheless, this technology
now that people are increasingly working
is expected to catalyze Mexico’s digital
remotely and may lack the necessar y
transformation, benefiting all business
infrastructure to support added features,
industries and the overall economy.
potentially compromising the security of business operations.
“Those do not have the capability to implement
Infrastructure, added value and
this technology are currently faced with an
cybersecurity are “ the three principal
internal battle to figure out how they will
features that big corporate clients are
survive and maintain their competitiveness.”
beginning to look for to build a sustainable
Carlos Perea
growth model and extend these capabilities
Digital Transformation Strategist and Senior Vice President of Cradlepoint
to their users,” said Perea. Initial 5G applications are being used in company vehicles and fleets to monitor and control transactions remotely. Other
“At the end of 2019, leaders projected the
uses include real-time logistical tracking,
widespread adoption of digital technologies
monitoring deliveries and intracompany
in the next four to five years, specifically
asset tracking. This stands to innovate the
related to cloud ser vices technology,
internal process of all public and private
cybersecurity and blockchain,” said Carlos
sectors from healthcare to agriculture.
Perea, Digital Transformation Strategist & Senior Vice President, Cradlepoint.
As people have realized the potential of this technology, business leaders have
Companies that realized the potential of
b e co m e im p atie nt with th e rate a n d
this disruptive technology and invested
investment needed to update existing
before the pandemic won big and “are
legacy infrastructure. Cradlepoint offers a
already seeing the results,” experiencing
way to bypass this wait period to start using
rapid growth over the last 12-18 months.
now 5G applications and all the available
Meanwhile, companies that had failed to
value-added services the technology offers.
invest in digital technologies suffered and
Companies that invest in 5G now stand
now find connecting to consumers difficult.
to get ahead of the market and develop knowhow before their market competitors.
Existing internet infrastructure is mainly made up of legacy installations such as
“ Those do not have the capability to
coper wires, which are severely limited
implement this technology are currently
38
C onfe r ence H ighlights faced with an internal battle to figure out
characterized by a young population that has
how they will survive and maintain their
readily embraced technology applications
competitiveness,” said Perea.
and will lead future business sectors. Since Mexico is still in the initial stage of its digital
Overall, 5G technology and adaptations
transformation, concrete projections of how
stands to add layered dynamism to Mexico’s
this technology will revolutionize industries
already robust emerging market sectors,
is unclear but they will most definitely
where early adopters stand to come out as
catapult competitiveness of the economy
winners over those who trail behind. This is
for the benefit of the consumer.
particularly important in an economy that is
TECH ENABLES A NEW DIGITAL WORKPLACE The digital transformation of the workplace
as it is in a traditional office,” suggested
began years ago but while this development
Amilcar Alfaro, Head of Field Marketing
dragged on for years, the pandemic opened
GCP for Mexico and Emerging Markets,
the flood gates. Industry experts outline
Google Cloud. Regardless of these bumps
which factors enable this rapidly evolving
in the road, the benefits could far outweigh
digital transformation and what challenges
the negatives. Employees can spend more
need to be overcome.
time at home, a major boon as long as they can maintain a healthy work-life balance.
Office spaces and their importance were
Alfaro furthermore emphasized that people
taken for granted for so long that the
have been more productive working from
COVID-19 pandemic initiated quite a shock:
home. Agustin De la Maza, Chief Solutions
not only was remote work possible but it
O ffi ce r, S of t te k also p ointe d o ut th e
became highly desirable. Still, now that
higher efficiency. “Remote work requires
in-person contact is possible again, the
a higher level of autonomy too, but this
modern workforce is shifting to a hybrid
needs to be repaid with this improved
system, trying to meet demands from
efficiency,” he added.
both sides. Verónica Peña, Modern Work, Security & Surface Business Group Director,
Fu r th e r m o re , re m ote wo r k “c h a n g e s
Microsof t, called this the hybrid work
the global dynamics of work,” allowing
paradox. “Sixty-three percent of employees
companies to hire talent from outside of
said they wanted to work remotely when
their own region and therefore become
asked in a survey. But at the same time,
more inclusive, said Peña. The in-person
77 percent did want to have meetings in
mode will remain a part of the working
person. This paradox is difficult to facilitate
environment regardless, the experts agree.
for employers,” she told MBN.
“Meeting in person positively influences the playing field and builds a platform where
I n a ny c a se , su ch ch a n g e s re q uire a
people can then meet online after,” said
significant amount of financial investment,
De la Maza.
as we ll as a com mitm e nt to ch a ng e . “Perhaps companies should accept that not
The move to remote work increased the
everything will be as smoothly implemented
willingness of companies to spur on their digitalization. While such developments
“Remote work requires a higher level of autonomy too, but this needs to be repaid with this improved efficiency.”
always come along with some anxieties, this is unnecessary, if understandable, said Alfaro: “People are always scared of how technological advancements will affect
Agustin De la Maza
work. But just like after the founding of the
Chief Solutions Officer of Softtek
internet, these developments actually breed opportunity instead of harm employment.
39
C onfe r ence H ighlights Digitalization is making it easier to access
“(The USMCA) has allowed us to get the
higher levels of employment for many.”
right level of investment to adopt the latest
Medina agreed. “All this change is coming to
trends, albeit a year or two later. But this
help and bring process, not to harm working
does get us on a good level of forward
opportunities,” he said.
movement,” said De la Maza.
But there are also challenges in fostering
Still, digitalization does not need to happen
an environment in which employees can
for its own sake, said Alfaro. “ Digital
efficiently employ digitally transformed
transformation does not all go at the same
tools. “ We cannot leave lesser skilled
pace. We need to look at Mexico’s consumer
workers behind,” underscored De la Maza.
realities, where people often have a ‘mobile
Technical skills are a major global issue to
first’ or even a ‘mobile only’ approach,”
be tackled. “Information from PwC shows us
he said. In this environment, the digital
that 64 percent of CEOs around the world
transformation should be in the service
worry that employee skills are a barrier for
of cost reduction and simplification of
growth in their company,” said Peña.
business processes. “Tech should not turn into something unruly and hard to wrangle,”
But rather than seeing it as a problem,
he continued.
training workers can be turned into a major weapon for any company. “According to the
Cost reduction should be a main
same report, 94 percent of workers say they
concern, said Peña, but that exact reason
will stay at their company if it were to invest
companies should not be afraid to invest in
in their skills. Because replacing workers is
digitalization. “Investing technology is not a
much more expensive than retaining them,
sunk cost. It boosts productivity and opens
the costs of training are justified,” said Peña.
up new business avenues,” she emphasized.
What is more, 86 percent of top employees
“Business can never be hampered or it will
argued that digital skill trainings helped to
harm its main objectives. Technology can
get them to their high level of performance.
be an ideal solution to boost its progress,”
“I see that many agree on this issue. It is
concurred Medina.
indeed important that people reskill and that a company’s evolution should take
One significant hurdle to overcome is
along its people,” agreed Medina. Retraining
security. With hybrid models being the latest
depended on wider social factors such as
trends, experts argue that companies need
age and technological aptitude. “People do
to foster a culture surrounding security.
not resist technology on average, but need
Keeping client data and operations safe is
to see the benefits and be aligned with its
essential in a time where cyberattacks are
goals,” said De la Maza.
becoming more frequent. When it comes to security, the biggest steps cannot be
In terms of speed, Mexico is not exactly at
made with technology but through culture
the forefront of digitalization. Fortunately,
and safety processes, “especially now that
it is not far behind either and the USMCA
we have so many portable devices,” said
opened further room for improvement.
De la Maza.
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