28 January, 2019 BeOn

Nestlé’s big bet on eCommerce in Mexico

The Swiss multinational is leader in the food and beverages categories and owns a wide range of products in its portfolio that go from water, coffee and dairies to cereal, chocolate, candy, nutritional supplements and pets’ food. The company is well known by the industry and retails because of their good practices and their understanding of the digital environment. In this article we will explore Nestle´s strategy to expand their online sales in México.

During the last months of 2017, the Swiss and most important multinational for food and beverages, focused all efforts on the development of its growth strategy for the online channel in Mexico. They made an investment of 50 million mexican pesos (more than USD 2.5 millions) in tests with the aim of better understanding consumers, technology and distribution mechanisms. The investment had 3 main objectives: the creation of its own sales platform, the development of alliances with companies such as Amazon, Petco, CornerShop and Walmart and -last but not least- the improvement of their social media presence.

The results were encouraging. While the expected growth was 35%, by the end of July this goal was widely surpassed.  Luis Macin, Nestle’s eCommerce Vice President for Mexico, informed that total sales of the first semester were 70% higher than the previous period.

Nestle’s online sales started in 2015 through agreements with retailer’s platforms such as Walmart, Mercado Libre, Costco, del Ahorro Pharmacy, San Pablo Pharmacy, Amazon and Cornershop. In a 3 year period, their online sales multiplied 10 times. Today, eCommerce represents 12% of sales for the Mexican subsidiary, a number that is significantly higher than what competitive companies today manage.

The strategy that Nestle seeks to deepen includes the B2B channel as well as the B2C. In this sense, the company counts with their own portals for brands such as Nescafé, Dolce Gusto and Nespresso -their iconic coffee brands. According to Nestle’s VP, working on both approaches simultaneously translated into a better performance for the company. Macin also affirmed that even tough FMCG categories such as food are not yet developed in the online arena, “more and more consumers are taking the eCommerce option to make their weekly grocery shopping”.

Nestle is definitely a leading company regarding the development of eCommerce strategies. Regarding advertising, Nestlé bets on deepening its presence at a wide range of online platforms such as Facebook, Youtube and Google, since they understand that nowadays consumers spend more time interacting with different devices like tablets or smartphones, rather than TV. Their digital strategy also includes the development of exclusive promotions for the online channel. Macin added that they are planning to create a monthly subscription system for Nestlé products.

 

Sources

Marketing4eCommerc

Medium

Forbes

El Financiero

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