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A consumer flight would generate the reopening of land travel between Mexico and the US.
Retail businesses would be the most affected during Good End 2021.
They will choose Mexicans between the Mexican and American discounts.
Border area retailers will be the most affected during Good End 2021 after the reopening of the overland passage to the United States, where Mexicans will have the opportunity to take advantage of promotions and sales on the American side.
Although it is required to check the complete vaccination scheme against Covid-19 and all the documentation in order, the Border areas between Mexico and the United States will once again allow travel for non-essential activities as of November 8.
“This is a gradual process, we also know that there are people who have already saved their Tourist Visa because they got used to carrying out their life on the Mexican side, we are in a historical setting,” said Jorge Araujo Saldivar, teacher at the School of Business and Administration at Cetys Universidad.
According to the expert, now the economic damage will be more visible, especially since the border reopening takes place two days before the cheapest week in Mexico, which could lead to a consumer drain.
Border risk for the Good End 2021
Merchants foresee a 30 percent decrease in sales during the Good End, from November 10 to 16, in border areas of Tijuana and Tamaulipas.
Jorge Marcías Jiménez, president of the Tijuana Chamber of Commerce, Services and Tourism (Canaco-Servytur), explained that the flight of consumers will be almost a fact after returning to normality on land trips to the United States, as people need to return to their shopping habits.
He also explained that local consumption will be promoted more than ever, as it seeks to maintain sales in some sectors, even if they fail to grow more than the figures prior to the Good End.
“We believe and hope that at the end of the day, being closed for more than a year and a half, many people will go out to make their purchases, and this will impact the clothing or electronic business, even food, more than the hardware sector,” said Francisco Rubio Ruiz Esparza Nuñez, president of the Canaco Hardware Store Specialized Group.
For Cristian Pérez Cossio, director of the State Federation of Tamaulipas Chambers of Commerce, the greatest challenge for merchants is at the corner door, since there is an unrealistic but deeply rooted belief that the products they sell in the United States always they are cheaper and of better quality, when it is practically the same product as the one found in Mexico.
This border consumer trend; however, it is the biggest gap faced by the Mexican merchant and not by large commercial stores.
Although in Mexico the border closure helped to strengthen local trade, for the American side the impact was greater, since the dependence on the Mexican buyer made many small businesses fail to survive.
Forecasts:
- In more than a year, the Mexican residents of the border did not have the need to consume dollars; now, a greater demand for the greenback is expected and, with it, a depreciation of the Mexican currency.
- Demand will cause an inflationary effect on the border, which is why a rise in interest rates is expected. It is advisable to have control in the use of credit cards.
- With the access of non-essential activities, they will once again have a greater reach to the retail market and the economy will be restored, especially of border trade in the United States.
- Although the 20 million travelers that were in 2019 between California and Baja California will not enter, an increase in demand for products and services is expected.
- There were many Mexican Americans who changed their residence to the Mexican side because of the costs, the ease of the home office and the accessibility. However, the reopening could cause some to return to the United States.
The forced march challenge
The border reopening will take place within the framework of the Good End, Black Friday and Christmas shopping, so the challenge for the commercial sector between Mexico and the United States is not less.
“It is going to happen by nature the crossings of tourism, shopping, and there comes the great challenge of seeing how good we are to retain through our products and services to all compatriots, that is an open market economy.”
“Mexico benefited economically from this partial closure of the border, since there was no capital flight that normally exists, our business must be able to retain its customers,” said Alberto Sánchez, president of the National Chamber of the Transformation Industry (Canacintra).
However, progress cannot be stopped, on the contrary, experts believe that merchants on both sides will have to fine-tune their sales strategies to meet the needs of both consumers (Mexican and American), since opening land bridges will also help the industrial sector with the delivery time of products sent by your suppliers.
“We had a formation of partners who are mostly small and medium-sized, who are suppliers to the industry, and many times these products are acquired more passively on the American side.”
“Right now we are in a complicated situation in terms of logistics, with the issue of merchandise shipments, and there is a lot of industry that is affected by the long delivery times that we have,” commented the head of the agency.
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