Globalization and E-Commerce: Diffusion and Impacts in Mexico

Article type: Research Article

Authors: Palacios, Juan J.

Affiliations: South Coast University Center, University of Guadalajara, Mexico. E-mail: jjpalacios@cucsur.udg.mx

Abstract: E-commerce began in Mexico in the early 1990s and has already extended into the main sectors of the economy, generating from its inception high optimism in both business and government circles. A number of factors, though, have dragged the process, which include a high degree of "informality" of the Mexican economy, a skewed income distribution, a traditional shopping culture, an also skewed business size structure, and a low level in the companies' technological development and organization structures. Nonetheless, e-commerce has taken its hold in Mexico. A critical set of enabling factors have prevailed over inhibiting forces, which include the large presence of multinational corporations, the liberalization of the telecommunications industry, the improvement of the country's telecommunications infrastructure, the creation of a basic legal framework, and the emergence of both e-banking and e-government. All indicates that such overall balance will continue to hold in the foreseeable future, so that the development of e-commerce in Mexico stands as a lasting phenomenon that may eventually lead to the rise of an economy significantly based on the Internet and other digital technologies, not just to the formation of an isolated "e-sector". The GEC survey discussed in this paper revealed that as much as 74 per cent of the business establishments included in the study use the Internet by for commercial purposes. This figure is far larger than the ones estimated on the basis of e-commerce revenues for the country as a whole, and thus changes the usual perception that e-commerce in Mexico has grown only to a limited extent. Accordingly, business establishments operating in Mexico outperform those in other countries included in the GEC survey regarding key aspects such as the use of e-mail, the construction and management of websites, the deployment and operation of EDI networks, and the improvement in their competitiveness, efficiency, and productivity. In a fundamental finding of this study, finance was found to be the most advanced sector in e-commerce adoption and development in Mexico. Financial firms and banking institutions proved to be the most globalized companies, the ones that use most extensively the Internet and Internet-based technologies for commercial purposes, the most advanced in systems integration, and the ones that spend the highest proportions of their operating budget in information systems. Conversely, and contrary to expectations, manufacturing establishments turned out to be the least advanced sector regarding e-commerce adoption and development, with distribution companies lying in the middle. The influence of size does not follow a regular pattern across all the sectors and aspects of e-commerce diffusion and impacts examined in this paper. Nonetheless, the size of business establishments does matter in most of those aspects. Five general propositions were tested with the results of the GEC survey, which condense the substance of the way e-commerce has developed in Mexico given the particular environmental factors playing out in this country: 1) global, more than domestic factors drive the spread of e-commerce in Mexico; 2) micro and small enterprises are the least likely to engage in e-commerce vis a vis larger establishments; 3) B-to-C e-commerce has grown more at the sectoral level than at that the national level; 4) government policies are essential for e-commerce growth; and, 5) the existence of an adequate legal framework is a crucial condition for e-commerce to develop. Propositions 1, 3, and 5 were confirmed, while 2 and 4 were only partially supported by the evidence provided by the GEC survey.

Journal: I-WAYS, Digest of Electronic Commerce Policy and Regulation, vol. 26, no. 4, pp. 195-205, 2003