Mexico’s answer to Black Friday, El Buen Fin is back, and bigger than ever! If you weren’t part of this year, read our tips for 2021
Finally, some good news for retailers in Mexico. Even with the ongoing pandemic still laying waste to Mexico’s economy, the 2020 Buen Fin is going to be huge. In fact, the Mexican Black Friday sales event is going to be bigger than ever. In an effort to boost local retail, the Mexican government has extended “Buen Fin” (usually a weekend) into a 12-day sales extravaganza, which started on November 9th and will run until 20th.
What does El Buen Fin mean anyway?
Buen Fin is short for Buen Fin de Semana, which translates to “Good Weekend.” Buen Fin started in 2011, with the aim of supporting Mexican retailers by encouraging shoppers to buy local. Based closely on the North American tradition of Black Friday, Buen Fin takes place each year the weekend before Mexican Revolution Day. Shoppers may wait all year to take advantage of huge discounts on everything from appliances to electronics, from fashion to travel, and much more. For some businesses, the shopping event serves as a way to drive sales during the pre-Christmas slump. Others take advantage of Buen Fin to attract North American customers to venture over the border in search of discounts.
What’s New with this Year?
This year’s Buen Fin promises to be the largest ever, despite the economic downturn caused by the COVID-19 pandemic. To encourage shoppers, the Buen Fin organizers have extended the event from 4 to 12 days. Buen Fin sales in 2019 reached MXN$118 billion (roughly USD$5 billion), and the 2020 event is predicted to reach or exceed that amount.
Online businesses, in particular, should expect to see a surge in sales. A report by AMVO (the Mexican Online Sales Association) found that 41% of Mexican shoppers who plan to make a purchase during Buen Fin will do so via the internet, a significant increase on previous years. In fact, 7 out of 10 online consumers in Mexico are intending to make a purchase during the Buen Fin sales. This rise in ecommerce sales in Mexico reflects a national trend that has been building throughout 2020 – a study by AMVO in September found that 50% of Mexican businesses have doubled their online sales this year.
How Can Merchants Get the Most out of El Buen Fin?
Here are our tips for how international businesses can have a very El Buen Fin this year:
1- Think big
To stand out from the crowd during Buen Fin, you’ll need to come up with a pretty special offer to attract shoppers’ attention. People in Mexico may wait all year for this one-off event – so a 5% discount is probably not going to cut it. Buyers will be looking for major discounts.
For new ecommerce brands, a first-time-purchase offer might be a great way to attract customers. Buy-one, get-one-free offers are always a great way to attract attention – the word free has a tendency to get noticed! Throw in free shipping to get customers past the final purchasing hurdle – Business Insider reports that unexpected shipping costs are the top reason people abandon a shopping cart.
2- Accept local payments
If you can’t accept the payment methods your Mexican shoppers are used to, you risk leaving serious money on the table during Buen Fin. International credit cards are not widely used in Mexico, and 60% of Mexican online shoppers will expect to be able to pay with a local debit card. An additional 35% prefer to pay using OXXO, a local cash-based payment method especially popular with the significant number of Mexicans who have no bank account. Many online consumers also expect to be able to pay for larger purchases in monthly interest-free installments, which may need to be set up through a local bank.
Accepting local payments is not only vital for opening up your products to a much wider market in Mexico. It will also increase your payment approval ratings substantially – our research suggests that processing payments locally can boost approvals by over 13%.
3- Get up to speed on VAT
The Mexican government introduced new tax legislation in June 2020 of this year – and you’ll need to make sure you’re up to date or risk a hefty fine. The new legislation affects international merchants who offer digital services to Mexican customers, including web applications and online content. Examples may include companies offering downloading and streaming of multimedia content (but not newspapers, magazines or e-books); online clubs; dating sites and apps; and e-learning sites.
If your business falls under one of these categories or might be considered a digital service, you are now obliged to display your product price and the VAT (16%) separately for each purchase, provide tax authorities with VAT information, and include VAT information on your shoppers’ invoices. However, some grey areas still remain around this legislation, so if you think your business might be affected, we recommend you watch our free webinar on YouTube for more detailed updates
4- Protect yourself and your customers
If you’re preparing for more orders than usual, you need to think carefully about security – more orders mean more opportunities for fraudulent purchasing. Mexico is a country with high levels of online fraud. Mexican online shoppers are extremely concerned about online security as a result – so to protect your business and your customers, make sure that you have your fraud management tools in place before the orders start to pour in. In particular, check your security certificate is up to date – over 80% of Mexican buyers will check for one before placing an order online.
We wish you all a safe, enjoyable, and profitable Buen Fin!
If you’d like to find out more about how we can help your business accept local payments, comply with local regulations, and make more money in Latin American markets, please set up a free consultation call with one of our local payments experts here.