Shopping Centers and E-commerce in Mexico: How Retail and Industry Synergy is Growing

The competition between brick-and-mortar stores and e-commerce has evolved into a strategic alliance that redefines consumer behavior in Mexico. Shoppers no longer choose one channel over another; instead, they combine both to maximize convenience and savings.

This phenomenon, primarily driven by intense price competition and enticing seasonal promotions, reshapes purchasing habits and transforms the commercial real estate market. E-commerce companies, with their demand for massive infrastructure, occupy, on average, 49 times more space per business than retail stores in shopping centers.

Pedro Huerta is Amazon's Country Manager in Mexico. Photo: SiiLA.

By: SiiLA News

11/19/2024

As December approaches, the battle between brick-and-mortar retail stores and e-commerce platforms heats up in Mexico. In recent years, however, this rivalry has given way to a fascinating synergy in which consumers no longer limit themselves to a single shopping channel. Increasingly, they research and purchase products online and then pick them up in physical stores. This shift underscores the growing importance of omnichannel strategies in a market that values convenience and the shopping experience.

This evolution is not only transforming consumer habits, but also reshaping the commercial real estate landscape. By the third quarter of 2024, according to SiiLA, shopping centers in Mexico’s major retail markets—Mexico City, Monterrey, Guadalajara, and Querétaro—housed approximately 4,500 businesses across more than 14,700 stores. Most of these (49%) belong to the fashion, food, and beauty sectors. By contrast, the industrial market included at least 20 major e-commerce companies occupying more than 120 warehouses, primarily (80%) focused on logistics and distribution for consumer goods, food, pharmaceuticals, and essential items.

To understand the impact of these businesses on commercial real estate, consider that retail companies in shopping centers occupy over 6.1 million square meters, while e-commerce businesses exceed 2.5 million. Although these spaces are not directly comparable due to their distinct purposes, proportionally, each e-commerce company occupies 49 times more space on average than a single retail business.

The stark difference in space requirements reflects the operational needs of each sector. E-commerce relies on massive infrastructure for logistics and distribution, while physical retail focuses on strategic locations designed to maximize direct consumer interaction. Despite their differences, both models are essential in a market that blends digital convenience with physical presence.

End-of-Year Shopping Trends

Liverpool’s PLAN is an industrial project that includes multiple warehouses that will operate as a nationwide logistics hub. Photo: ADI.

What changes as the year draws to a close? Discounts. Along with them comes a shift in consumer behavior, with habits evolving toward a blended approach driven by promotions in both physical stores and online platforms. This trend reshapes business strategies and consumer expectations as shoppers seek direct financial benefits through price competition.

According to a recent Amazon survey, 67% of Mexican consumers take an omnichannel approach during major discount seasons like the holiday period: they research and purchase products online but also visit physical stores to try, buy, or pick up items. This preference confirms that the line between digital and physical retail is increasingly blurred, forcing retailers and e-commerce platforms to coordinate their efforts to meet the demands of consumers who value flexibility and integrated options.

One clear example of this evolution is Liverpool, which is not only the largest tenant—measured in gross leasable area—in shopping centers nationwide but also one of the top 20 industrial tenants. The company operates at least 13 industrial warehouses, including PLAN III, a 230,000-square-meter facility that is one of the largest in the country, according to SiiLA Market Analytics.

This model is not unique: more and more companies are expanding their industrial footprints to complement their physical retail operations as part of an omnichannel strategy transforming commercial real estate and supply chains.

According to Payments and Commerce Market Intelligence (PCMI), the e-commerce sector in Mexico is expected to experience a compound annual growth rate (CAGR) of 33% from 2023 to 2026, the highest in Latin America after Peru. Meanwhile, Amazon estimates that 25% of holiday shopping in Mexico occurs online, while the digital marketing agency Elogia puts this figure at 47%. This discrepancy, likely due to differences in methodology or analyzed categories, highlights the growing importance of digital commerce as a key driver of end-of-year shopping.

In general, available data suggests that the growth of digital commerce has pushed physical retailers to establish a robust online presence, including dedicated websites and advertisements on digital marketplaces. This growth is closely tied to factors such as delivery speed and, most importantly, the cost savings consumers seek. As a result, digital transactions surge during discount seasons. However, similar behavior is observed in physical stores, as current shopping trends show consumers comparing prices and products across both channels to maximize their savings. This explains why purchases are often made online but picked up in-store, allowing shoppers to verify the quality and condition of their items.

Ultimately, the convergence between digital and physical commerce is transforming consumer habits and the way companies structure their operations to compete in a market where omnichannel strategies are no longer an advantage but a strategic necessity.

Want to stay current on commercial real estate trends and the latest corporate moves? Visit SiiLA REsource or contact us at contacto@siila.com.mx.

Latam

Mexico

National

CRE

Market Analytics

Retail And E-Commerce

ABOUT SiiLA

Founded in 2015, SiiLA is the industry leading REsource for comprehensive commercial real estate market insights, news and events across Latin America. The SiiLA suite of innovative products drive greater accuracy, efficiency, and strategic advantages for top players in the commercial real estate industry.