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With an expanding middle class with rising disposable income and Latin America’s second largest consumer market (behind Brazil), Mexico offers a potentially significant market for international consumer goods companies, as highlighted by Euromonitor International’s Income and Expenditure Mexico Country Briefing. However, income inequality in the country is high and is expected to remain elevated in the long term, which restricts the consumer market potential. Although inequality poses a challenge to companies seeking to conquer the Mexican market, it is clear that there are plenty opportunities for low-cost, basic goods and services.
Despite the positive impact of social programmes such as “Programa Oportunidades” – a conditional cash transfer programme that started in 1997 to provide support in the form of food, education and healthcare to poor households, Mexico continues to have a highly unequal distribution of income:
While high-income earners make up an important consumer segment (with the richest 10.0% of households accounting for nearly a third of the country’s total consumer expenditure) and the burgeoning middle class is a key driver of consumer spending growth, the prevalence of low-income consumers in Mexico is not to be overlooked by businesses. Low-income Mexicans will support long-term demand for low-cost basic products and services in a wide array of sectors, including health goods and medical services.