Introduction
In contrast to their peers, leading companies in the packaged consumer goods (CPG) sector in Mexico and Latin America have clearly identified e-commerce as a crucial component of their annual planning.
Background and Context
After a decade of macroeconomic turbulence, the packaged consumer goods industry in Latin America is undergoing a profound transformation, particularly in the realm of e-commerce. These leading companies have demonstrated remarkable adaptability and evolution by integrating digital strategies to remain competitive in an increasingly dynamic market.
What are CPG Companies?
CPG, or Consumer Packaged Goods, companies manufacture and sell everyday products such as food, beverages, personal care items, home goods, and more. These businesses play a vital role in the region’s economy.
E-commerce Adoption by Leading CPG Companies
Latin American CPG leaders have significantly enhanced their e-commerce capabilities in recent years. According to our 2024 Benchmarking for Retail Excellence survey, involving 30 industry companies—including ten of the most prominent Mexican firms—these leading companies are twice as likely (57% vs. 27%) to incorporate e-commerce as a central component in their annual plans and strategies compared to their competitors.
Advantages of E-commerce Integration
This strategic approach allows these companies to stay at the forefront of technology and digitalization, providing them with a competitive edge. In terms of execution, these industry leaders possess advanced marketing and content development capabilities. This includes improved product images and descriptions, as well as the ability to optimize search and execute promotions on retailers’ e-commerce platforms and marketplaces. Consequently, they capture a larger share of the growing e-commerce channel.
E-commerce Growth Projections
The e-commerce market in Latin America and the Caribbean is projected to maintain its upward trajectory. According to Statista, the region’s retail sales reached $117 billion in 2023 and are expected to surpass $205 billion by 2028, setting a historical record.
Mexico’s E-commerce Growth
In Mexico, e-commerce retail sales are projected to grow at a compound annual growth rate (CAGR) of 11.4% until 2029, highlighting its importance in driving sector growth.
The Importance of E-commerce for CPG Leaders
The evolution of e-commerce in the packaged consumer goods industry in Latin America exemplifies how innovation and adaptation can drive growth and sustainable success. These leading companies are setting a new industry standard, demonstrating that e-commerce is not just an option but a necessity for the future.
Data-Driven Marketing
Leading CPG companies are more likely (83% vs. 60%) than their peers to measure the performance of digital content through return on ad spend (ROAS). This type of analysis helps understand consumer behavior and adjust strategies, contributing to a personalized and efficient shopping experience that boosts customer satisfaction and brand loyalty.
Key Questions and Answers
- Q: What are CPG companies? A: CPG, or Consumer Packaged Goods, companies manufacture and sell everyday products such as food, beverages, personal care items, home goods, and more.
- Q: Why is e-commerce a priority for leading CPG companies in Mexico and Latin America? A: E-commerce is crucial for these companies to remain competitive in a dynamic market, allowing them to leverage advanced marketing and content development capabilities.
- Q: What are the growth projections for e-commerce in Latin America? A: The e-commerce market is expected to reach $205 billion in retail sales by 2028, with Mexico’s e-commerce sector projected to grow at a compound annual growth rate (CAGR) of 11.4% until 2029.
- Q: How do leading CPG companies measure the success of their digital strategies? A: These companies are more likely to use data-driven marketing, specifically return on ad spend (ROAS), to understand consumer behavior and optimize their strategies for a personalized shopping experience.
Key Takeaways
To maintain leadership in the CPG sector, companies must prioritize e-commerce and adopt data-driven marketing strategies. By doing so, they can stay ahead of the competition, optimize their digital capabilities, and foster customer loyalty.
