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Mexico's Hidden Economy on Facebook

Mexico is famous for its open-air street markets and now it is developing its own underground economy, created over social networks and especially Facebook. This economy, already robust in larger cities of Mexico and spreading into smaller communities, involves selling just about any type of legal-to-own merchandise online.

Companies try to brand their products by using Facebook but the underground economy is more than just branding and quite different to what you might find on Mercadolibre, an eBay affiliate in Mexico, which requires a credit card or some other mean of payment such as a personal bank deposit. Mexico has one of the lowest rates of credit/debit card-carrying consumers in the world and here in the underground economy all transactions take place in person and with cold, hard cash for the seller. The merchandise can be viewed and checked out for defects at the point of purchase and is quickly taken away to make space for the next item.

The items are first advertised on Facebook group pages created especially for the buying and selling of certain or all types of merchandise in a local area or city. Each administrator or creator of a Facebook group page can define what can and cannot be sold on their page. Group pages can also limit the amount of people subscribed to the page. Basically, the page administrator calls the shots on what type of merchandise can be advertised on their group page. Many of the administrators are surprisingly open and very few pages have restrictions on businesses or individuals as to how they conduct business. These different group pages have upwards of 10,000 group members with many cities having up to 10 such Facebook pages.

The idea is functional and rewarding for all parties that participate: buyers get low prices and sellers learn what sells and at what price.

According to an eMarketer report, Facebook commands 92% of the social media market in Mexico. In 2013, Mexico could have more than 28 million people with Facebook accounts, with this number expected to increase over the next two years to 38 million people. In addition, people in Mexico are poised to ramp up purchasing of smartphones with an estimated 27 million people owning a smartphone by the end of 2013, with strong double-digit growth through 2017. So there seems to be a perfect storm converging that can only help the market grow.

The concept means lost tax revenue for the Mexican government, which has estimated that only 30% of small businesses actually have a business licence. In many cities of Mexico, a person’s residence or home is the actual business location for a clothing shop, restaurant, printing bureau, liquor store, grocery shop and so on. A family can have their business attached to their home and in many cases a business licence is not required. In many ways the economy is much like the old-fashioned way of doing business as a craftsman in a town dominated by cottage industry.

Look at food as an example of the Facebook effect. The majority of employees in Mexico work at least 48 hours a week, spread out over a six-day working week. In general, employers allow their employees to eat while working. Thus a demand for reasonably priced pre-made food in the form of sandwiches, tacos, tamales, soups and other traditional dishes has always been consumed. Having a delivery service to transport comestibles short distances rapidly can help tremendously. So imagine being at work, you check the local food Facebook group pages and start to buy your lunch or dinner. Now, most of us know that the final part of the equation is client service. What better way for a person to have food delivered to their workplace at a rapid pace without further questions? At the point of sale, which is the point of the delivery, money is collected and the food consumed.

Facebook group pages for buying and selling have taken legs in Mexico and will continue to surge.


Daniel James Shosky is a public historian and freelance writer residing on the island of Cozumel in Mexico. His writing passions are in historic preservation, social history, travel, technology and the environment.


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Daniel James Shosky

Daniel James Shosky is a public historian and freelance writer residing on the island of Cozumel in Mexico. His writing passions are in historic preservation, social history, travel, technology and the environment.

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