April 19, 2021 6 min read
This story originally appeared on Alto Nivel
Having a website, good photos, sending the product, logistics, a payment system, marketing and other issues have had to face small and medium-sized companies (SMEs) at once if they wanted to survive during the health emergency that caused the closure. businesses , of which many did not reopen.
In the last 17 months, in Mexico 1 million 10 thousand 857 businesses ‘died’ , while in the same period 619 thousand 443 were born. That is, for each business that was born, 1.63 died, according to the Study on Business Demography 2020 (EDN) of the National Institute of Statistics and Geography (Inegi).
Of course, many businesses that disappeared were linked to activities that consist of mobility and interaction, such as tourism. The rest, who sell products and services at home, have migrated to e-commerce, with mixed results.
According to a study by the Mexican Association of Online Sales (AMVO), six out of ten SMEs in Mexico already sell on the internet, and two out of ten began to do so after the pandemic.
For those who were already selling online before the health emergency, less than 20% said that their online sales represented more than 31% of the total. After COVID-19, 31.5% say that a third of their sales or more depend on online commerce, according to the study.
Specialization, the keyword
There are many things that SMEs must learn if they want to survive with online sales, but there is a key concept for success in e-commerce: Specialization.
” This is a concept that is perhaps easy to understand, but it is very difficult to digest, ” says Danny Sánchez-Mola, founder and CEO of Kolau, a marketing solution for SMEs.
Danny explains that the transition from a physical store to an online store is very different. For example, in a fashion store you have clothes, shoes, belts, etcetera; customers walk in, see the items, and decide which one to buy. In an online store it does not work like that.
Obviously, SMEs have spent a lot of time uploading all the products, all of them, to the website. When the business model is slightly different on the internet, because the key is specialization. If you go to a web page where you want to look for shoes and you find jewelery or belts, you go, you will not spend 10 minutes browsing the web page ”, he explains.
Gerardo Brehm Sordo, Director of Marketing and Institutional Relations at GS1 Mexico, comments that specialization also has to do with product differentiation, whether the SME participates in the traditional consumer market or engages in handicrafts.
“I believe that there is an important opportunity in particular for artisans and those who handle any specialty, be it painting, wood, embroidery or textiles. Of course you have to get the costs well, but the market can be very wide because it is willing to pay it ”, he adds.
There are big differences in the transition from the physical store to an online store / Image: Depositphotos.com
And how long does it take to learn all this?
A year ago, Kolau and the Organization of American States (OAS) launched emprender.com.mx , a digitalization platform for micro, small and medium-sized companies in Mexico to mitigate the effects of the COVID-19 pandemic. Since then, more than 100,000 small businesses in more than 500 cities in the country have created their website. Of these, 4,000 units are already selling their crafts, which shows the opportunity that was already on the internet and that has been taking advantage of since the pandemic began.
Danny Sánchez-Mola explains that one of the effects of the health emergency and the temporary or permanent closures of physical stores is that now, three-quarters of sales start or end on the internet, when before it did not exceed 50 or 60%.
All of this is fine, but how long does it take for an SME to learn and sell online?
“Having an internet page takes you 15 minutes, but no one can find you (…) But for it to be useful for you and you can sell, we are seeing that it is between 3 and 6 months. It is longer than we sincerely expected; but it’s not bad either, “he says.
Specialization also has to do with knowing the customer you want to reach, that is , knowing what they need and giving it to them for an appropriate value , highlights Gerardo Brehm, from GS1.
The expert gives as an example the bottled water market, which in appearance cannot be very customizable, but which differ in size, prices and additional values, such as sodium-free water or elements that provide greater hydration.
“That is knowing the market niche, who your consumer is and the real perceived value they have of this water for its differentiated value. So, this is also an issue for SMEs. “
For Brehm Sordo, this is one of the two pillars to be successful in e-commerce: Knowing your consumer; The other pillar is putting together a cost strategy and knowing how much the market is paying for your product.
Danny Sánchez-Mola, from Kolau, remember that, for people to find you on the internet, you have to be very specific with what you sell “ Don’t just say that you sell hats, you also sell cowboy hats. You don’t just sell lamps, you also have table lamps . “