Mexico Business Forum 2021 Echo - Impact Report

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

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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

•

Google

•

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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