I was introduced to young Mexican entrepreneur Andrés Díaz Bedolla by the American Chamber of Commerce of Mexico during a conversation about nearshoring and the move of foreign direct investment from China to Mexico.
The team at AmCham said that Andrés was most definitely someone to “keep an eye on” and who I needed to talk to.
I began our conversation with the provocative question I posed in my column last week: What if everyone benefits from nearshoring in Mexico except Mexicans?
Andrés recently founded a fast-growing Mexican startup called Yumari, with a clear objective to make sure Mexicans stand to benefit from nearshoring.
To understand the business, it is first important to understand why so many companies moved manufacturing to China, which comes down to two reasons: it was cheap and easy.
Even though it meant a much longer supply chain, the fact that it was cheap and easy made up for it. Since companies are now concerned about the supply chain, we all know that they are looking for other places to produce their goods — places with a shorter supply chain, and ideally, that are cheap and easy to work in.
Mexico is obviously a much shorter supply chain in proximity to the United States, Mexico is competitively priced — but Mexico is certainly not as easy as China.
“Chinese companies can give you a price including all of the logistics to your doorstep and give you all the specifications you need on the same day,” said Andrés. “Mexican companies take two weeks to get you a price, then another two weeks to get you the specifications that you need, then another two weeks to quote you the freight cost to Laredo.”
His concern is that Chinese companies, recognizing their ability to move quickly and make working with them easy, will try to replicate their factories and ease of doing business in Mexico. This attractive option for the buyer could create a scenario in which Mexican companies are outplayed and lose out, not only on new opportunities for growth but on the existing business that they already have.
The solution, according to Andrés, is to help make Mexican companies faster and easier to work with. In other words, helping make them a viable alternative to Chinese solutions.
This is where his new company Yumari is focusing its efforts.
Andrés worked for a decade in China before moving back to Mexico to run the Latin American operation of the Chinese company Alibaba.com.
In this role, Andrés recruited Mexican businesses to join the Alibaba.com platform in order to connect them with Chinese businesses. In theory, the model was to help Mexican buyers source from Chinese suppliers and vice versa. In reality, it just provided Mexican buyers an easy path to source from China — Chinese buyers had little interest or incentive to source from Mexican companies.
With this realization, and with the nearshoring boom underway, Andrés came up with the idea of creating a North American version of Alibaba.com, a platform that would connect U.S. and Canadian buyers (who previously had bought from China) with Mexican producers.
Yumari is focusing on providing not only buyer to seller connection, but also working with the Mexican producers to help them learn the efficient processes that their buyers have come to expect in working with China.
In other words, this Mexican entrepreneur is providing the platform, the tools and the experience to help Mexican companies benefit from the nearshoring opportunity.
Yumari is just getting started, but I think that it is safe to say that they are in the right place at the right time.
Companies from around the world are looking to manufacture in Mexico. The big companies just move entire factories to Mexico. The smaller companies will look for sources of supply in Mexico. If they can’t find it locally, they might look elsewhere or they might ask their current Chinese supplier to move to Mexico.
Companies like Yumari can provide the experience and training to help make Mexican companies competitive and meet customer expectations.
I’m betting on Andrés and his team being successful in ensuring that Mexican companies are ready to compete, and that Mexicans maximize their benefit from nearshoring.
Travis Bembenek is the CEO of Mexico News Daily and has been living, working or playing in Mexico for over 27 years.
