E sales surge in the US and the north of Mexico.

Following fears of an economic downturn in the US following the sub-prime bust, credit crunch and the negative effects that might have on the Mexican economy, some good news showed up this week with the early December levels of online shopping in the US.

According to data from Comscore (via The Economist) US online purchases, from November 1^st. to December 6^th, increased a healthy 18% versus 2006, with weekly sales peaking at a record e-commerce level of 4.6 billion dollars. So in spite of falling house prices, tighter credit and lower levels of consumer confidence, North Americans appear to be spending more than ever, at least online.

The north of Mexico also seems to be experiencing a surge in online shopping. According to data extracted from Google Trends, Google searches to online retailers, so far in December, have increased significantly in the Monterrey and border areas. This would indicate that innovators and early adopters in the north of the country are beginning to follow what is now a mainstream activity in the US and have begun to take their Christmas business online. This poses a question: as broadband internet penetration begins to accelerate towards 10% of the population, to what extent are retailers in Mexico prepared for the coming e-commerce Christmas opportunities?

Further analysis, using Google Trends, shows a mixed picture. Palacio de Hierro, Mixup and Office Depot show higher levels of searches compared to amazon.com. Office Max, Liverpool.com and Sanborns.com show lower levels.

The quality of site content and “shopability” varies from state-of-the-art, at Office Depot, Sanborn’s and Mixup, to rudimentary at Palacio de Hierro and Liverpool. The latter sites being more focused towards the wedding gift market than the Christmas shopper. Palacio de Hierro projects a festive spirit but offers a limited selection of gift ideas and does not offer a secure shopping cart. Customers have to call a sales operator. Hardly state of the art e-marketing.

The leading Mexican brand, in terms of e-commerce potential, would appear to be Mixup.com. With its advantage in music and video products, the strongest selling e-commerce categories, Mixup.com might just emerge as the amazon.com of Mexico. Next up would be Office Depot and Sanborn’s, two strong national brands backed by the awesome technology and financial resources of Carlos Slim. Palacio de Hierro clearly has potential too, but would require a significant forward commitment to technology and digital content in order to compete effectively.

If actual buying online has yet to take off in most of Mexico, using the internet for browsing and information gathering peaks strongly during the Christmas season. Interest in the iPhone, for example, appears to be strong all over Mexico. Search traffic for video games also appears to be strong. Probably from parents looking for information on exactly how much an Xbox or Wii is going to cost them.

With the expected surge in broadband internet penetration and e-commerce in Mexico, the above should serve as a loud wake-up call to Mexican retailers. The horrendous pre-Christmas traffic alone should be enough of an incentive for thousands of frustrated Mexico City shoppers to take their shopping online.

Best wishes for the holiday season.