Zara sells online in Mexico

 BY KATIE EVANS Managing Editor, International Research

Fashion chain Zara has sold in stores in the Latin America country since 1992. The retailer says the move to sell online in Mexico is part of a plan to sell on the web in all of the countries where it has stores.

Fashion retailer Zara sells in Mexico in 59 stores and of last week shoppers in the country could also shop for the retailer’s trendy apparel from their computers or smartphones.

The retailer, owned by Spain-based Inditex Group, started selling in stores in Mexico in 1992 and says it wants to sell online in all of the countries where it has stores. Through the new site, www.zara.com/mx, the chain enables consumers to shop for the full range of women's, men's and children's items sold in its stores. Shoppers can get items delivered to their homes or pick up items ordered online inside stores. Zara charges nothing for store delivery, which takes three to five business days. Home delivery is free for orders totaling more than 899 pesos (US $68.05), while orders less than that amount cost 55 pesos (US $4.16) for delivery. Standard delivery to homes takes two to four business days. Zara offers free returns.

Inditex Group,  No. 60 in the Internet Retailer Europe 500, operates 260 stores in Mexico, including for   fashion brands Pull&Bear, Massimo Dutti, Bershka, Stradivarius and  Oysho, as well as shops for Zara Home and lingerie brand Uterqüe. Mexico is one of Inditex's biggest store networks outside its home country of Spain, Inditex says. It plans bring most of its other brands online in Mexico in the next few weeks, including Pull&Bear, Massimo Dutti, Bershka, Stradivarius and Oysho.

Having stores in countries like Mexico where online shopping is just beginning to pick up steam can help retailers drive online sales, an analyst says. “Shoppers new to ordering online may turn to brands they know and trust from shopping in their stores,” says Zia Wigder, vice president and research director at Forrester Research Inc.

Online sales in Mexico increased nearly 30% to $2.2 billion in 2013 from $1.7 billion in 2012, according to Forrester Research Inc., whose estimate excludes ticketing and travel. By comparison, web sales growth for all retailers in the Internet Retailer Latin America 500 grew 22.8%  to $17.94 billion in 2013 compared with $14.62 billion in 2012.

For now, Zara in Mexico accepts only major credit cards,  including Visa and MasterCard,  and payments via PayPal. But some, including Roberto Rodarte, chief operating officer for Mexico-based web-only apparel and accessories retailer Gaudena.com, suggest Zara might want to add cash on delivery to its payment options. A large percentage of consumers in Latin America don’t own credit cards, and many don’t have bank accounts.  According to the World Bank, just over one-quarter of Mexicans over the age of 15 have a bank account.  In 2011, the World Bank estimated the credit card penetration rate for those ages 15 or older at 13% for Mexico. To spur more online purchases in Mexico some retailers allow consumers to pay at convenience stores, a payment model that initially gained traction across the Pacific in Japan, Wigder says.

“If you want to come to Mexico you have to have cash on delivery as a payment option,” Rodarte says. “For us the sales are incremental sales. It’s not that not that the customers who paid with credit cards switched. These were new people who never bought from us before.”

Rodarte says about 60% of online shoppers pay cash on delivery, which the retailer offers through FedEx. FedEx three months ago launched its cash-on-delivery service throughout all of Mexico, and Rodarte says the service has helped Gaudena.com reach new shoppers who don’t have access to credit or debit cards or don’t trust paying with a card online.

The apparel and accessories arm of Zara began selling its products online in 2010 in several European countries, following the e-commerce launch in 2007 of the Zara home division. Since launching in Europe, Zara has begun selling online in the United States, Japan, China and Canada. Today Zara's online shopping platform is available in 25 markets. Zara began selling online in the United States in 2011.