House Items Gross sales Triple with Nary promoting an merchandise on-line
By Christiana Sciaudone
Investing.com – Household goods retailer Betterware De Mexico SA de CV (NASDAQ 🙂 sales rose 200% in the third quarter. With the company ready to start selling online next week, the numbers are set to keep rising.
Betterware de Mexico, the only Mexican company listed directly on the Nasdaq, is a direct-to-consumer retailer (think catalogs and local staff selling their wares), and the online jump won’t get anywhere to change. It brings the brand to consumers who haven’t used it before but always through a local representative who not only takes care of last mile delivery, which keeps costs down for the company, but also accepts cash.
Betterware de Mexico has many online competitions – Amazon (NASDAQ 🙂 and Mercado Libre, to name two – but “Accepting cash is necessary to get e-commerce success,” according to one handy e-commerce Report in June. While shoppers can pay for online goods through convenience stores by printing a page with a barcode and paying in cash, representatives of the home goods company pick up cash.
Betterware de Mexico can thus win over a large part of the population, and the company is accordingly preparing for a larger expansion.
“We have many opportunities to grow in the future,” said CEO Andres Campos in a telephone interview with his father, Chairman Luis Campos.
The company increased its earnings before interest, taxes, depreciation and amortization for the full year to pesos 1,900 million ($ 95.6 million) and pesos 2,100 million, compared to its previous forecast of pesos 1.45 million. The Ebitda margin is expected to be between 26.2% and 28.9%.
Betterware de Mexico launched in March through a reverse merger with a special purpose vehicle DD3 Acquisition Corp. . The company sells everything from chip clips and toilet roll stands to lingerie wash bags and wallet lights. Betterware de Mexico currently serves more than 3 million Mexican households and is already profitable in Guatemala, where it launched a pilot project this year.
“Today we only have a market penetration of 20% in Mexico,” said Andres Campos. “We still have a lot of room to grow.”
New markets in sight
With Guatemala turning out to be a victory, the company expects to move to Peru and Colombia in the next few years.
More immediate, however, is the launch of a web marketing platform in the next week that should attract a whole new group of Mexicans who may have never ordered from a catalog or met a company representative.
“This model is even stronger than standard e-commerce,” said Andres. Orders are delivered through agents who take care of the last delivery mile for Betterware free of charge – a competitive advantage over competitors. Perhaps more importantly: “We can collect cash on delivery. Traditional e-commerce models cannot do this in Mexico.”
More than a third of the population doesn’t have a bank account, which means cash continues to rule, Practical eCommerce reported. Internet use is also not as widespread as in other countries.
In 2019, around 56% of households had access to the internet, but for those without internet, most said they could not afford it. According to Practical eCommerce, eCommerce sales are expected to grow at an average annual rate of 6.5% over the next four years to a total of $ 21.8 billion in 2024.
Betterware, which mostly manufactures its own products in factories in China, launches around 300 new products each year and intends to dive into new categories, though executives refused to provide further details. It’s another growth factor for the ambitious group.
Not that it is without competition. Walmart (NYSE 🙂 de Mexico, Home Depot (NYSE 🙂 and Tupperware (NYSE 🙂 are among Betterware de Mexico’s biggest competitors, but executives point to their specialization in the home as one of their differences.
“We are very close to our consumers,” said Andres Campos. “We invest a lot in understanding the consumer and the home” and developing precisely the products that we need for our markets.
“We are ready to keep growing,” he said.