Contxto – eBay announced last week that it will use MXN$5 million (over US$220,000) to help small and medium-sized enterprises (SMEs) through its “Mi Negocio 24/7” platform. This initiative offers vendors a full-suite of tools and advice to help them launch and run an online business.
Naturally, they can showcase their products through Mi Negocio, as well as coordinate the logistics with eBay. The marketplace even provides them with a point of contact to assist them in exporting their products. eBay even offers them a training program. And the cherry on top? Sellers can publish ads freely until July of this year.
It’s quite the soft-landing package for first time e-businesses.
But any entrepreneurs that are interested must sign up on eBay’s website by July 31. Note that the marketplace will evaluate applications and choose those that most likely benefit through the project. So it’s not a free-for-all.
The e-commerce competition is about to get fierce
Covid-19 is pushing people across Latin America and the world to embrace e-commerce. As a result, multiple startups and small platforms have emerged to ease the process for many first-time online businesses. But they aren’t alone. Large tech companies also want a stake and they have the money and infrastructure for it.
Last Tuesday (19) Mark Zuckerberg announced the launch of its “Shops” feature. Through this addition, users can make purchases or offer goods directly through Facebook and Instagram. Vendors can display their products and even create a virtual storefront, free of charge.
Facebook only earns money when vendors use its payment system, in which case they’re charged a five percent fee. This rate is higher than that of Latam fintechs that offer payment processors like Clip (3.6 percent) and Billpocket (3.5 percent).
But lower than marketplaces like Canasta Rosa (8.5 percent: 5 percent is for the startup, plus a 3.5 payment processing fee). And more importantly, its rate is lower than its competitors. In Amazon’s case its fees range from 6 to 45 percent, depending on the item. Mercado Libre’s fee in Mexico ranges from 13 to 17.5 percent.
And of course there are also costs of shipping a product to factor in. Larger tech companies can burn through cash to offer cheaper logistics services as an additional perk. As a result, competition within e-commerce and marketplaces is poised to get all the tougher in the medium term.
Startups may have the upper hand in providing better customer experience and product variety, as well as lower fees. But it’s hard to compete with companies like Amazon and Mercado Libre that have oodles of money, an established reputation, and boots on the ground to roll out their ambitions.
Related articles: Tech and startups from Mexico!