E-commerce in Mexico reconfiguring prices in pet food

As pet food e-commerce in Mexico increases during the pandemic, as it is growing elsewhere, pet food pricing strategies and profits are changing.

(Artem Samokhvalov | shutterstock.com)
(Artem Samokhvalov | shutterstock.com)

Amidst the COVID-19 outbreak, internet sales are ramping up, particularly for pet food. E-commerce specialists believe the current outbreak pandemic will accelerate the imminent growth of online sales in Mexico, including pet food sales.

Amazon and other major outlets, such as Mercado Libre, are leading the booming online sales for pet food locally. One major implication of increasing online transactions for the pet food business is the reconfiguration of pricing strategies and profits.

Some pet food products cheaper online despite demand

Online retailing leaves out some of the intermediaries that brick-and-mortar stores still use. Generally, the traditional retail pet food business has at least one intermediary seller – sometimes, more than one.

With a larger share of pet food sales now, prices for pet food products are being pushed down as intermediaries add up profit margins. For example, Amazon’s best-selling pet product in Mexico is a 20-kilogram Nupec adult dog formulation, with a price at 70 pesos (US$2.87) per kilo. Veterinary and pet shops sell the same product.

At the same time, the 10th best-selling product on Amazon’s Mexican platform is Purina’s Dog Chow in a 7.5-kilogram size, available at just 47 pesos (US$1.9) per kilo. The same product cost 13% more at Walmart.

Moreover, the online prices mentioned above are the same as two years ago, suggesting that some pet food products in Mexico are cheaper online today, despite higher demand amidst the current COVID-19 outbreak. Royal Canin's 6.5-kg small-breed formula – the fourth best-selling pet food on Amazon Mexico – is available at 125 pesos (US$5.12) per kilo. A couple of years ago, the price per kilo for this product was higher than today, even with an exchange rate 30% lower.

As online sales are growing, intermediation is diminishing, and pet food is getting more affordable for online consumers.

Positive news for Mexican pet owners

Another benefit for consumers buying online is they can easily compare products and prices from different vendors, while this more difficult and time-consuming at physical stores.

Among all the bad news from COVID-19, Mexican consumers have some positive news regarding prices, prompt delivery and a wide product array. Online sales are restructuring the local pet food market.

 

View our continuing coverage of the coronavirus/COVID-19 pandemic.

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