Mexican firms will be able to list products on Chinese e-commerce site Alibaba. Mexican firms will be able to list products on Chinese e-commerce site Alibaba.

Deal opens markets for Mexican products

Government signs agreement with Chinese e-commerce giant Alibaba

The federal government has signed a deal with leading Chinese e-commerce platform Alibaba that will enable Mexican companies to list their products and services on the site and gain access to increasingly lucrative markets.

A government undersecretary and the company’s president signed a memorandum of understanding (MoU) at company headquarters in Hangzhou earlier this week in a ceremony witnessed by President Enrique Peña Nieto and Alibaba founder and executive chairman Jack Ma.

The Secretariat of Economy will partner with the massive online consumer market — the world’s largest — giving Mexican companies the chance to sell to a growing middle class in the world’s most populous nation.

Alibaba will provide its expertise in logistics and payments and share analytics so that companies can better target the Chinese market.

Both the president and the Chinese business magnate talked up the deal.

“By partnering with Alibaba, we can expand Mexico’s export options in China and in Asia more broadly, while enhancing Mexican [small and medium-sized enterprises’] knowledge of e-commerce and cross-border trade,” Peña Nieto said at the signing ceremony.

“We are delighted to promote cross-border trade with Mexico through this MoU,” Ma remarked.

While Alibaba has similarities to online retail giant Amazon, which expanded its operations in Mexico two years ago, Ma told Fortune that he doesn’t see the company as a competitor.

“Our job isn’t to be Amazon, it is to allow every company to become an Amazon.”

The deal comes as Mexico is seeking to diversify its trade relationships in the face of a possible breakdown in renegotiation of the North American Free Trade Agreement (NAFTA).

Peña Nieto also met with Russian President Vladimir Putin on his China trip while recent trade discussions were held with Brazil.  Meetings with Australia and New Zealand are also on the agenda.

The head of a firm that helps Mexican companies to expand into China said the country is seen as the main trade alternative if the United States pulls out of NAFTA.

“. . . We have to be ready to start implementation of Plan B, and Plan B is China,” Chevaya CEO Adrián Cisnero said.

While recognizing scope for growth in the Mexico-China trade relationship, experts say that difficulties could arise from the fact that both countries compete for business with the U.S. because of the distance between the two countries.

However, there is an incentive to both sides as an increasing number of Chinese consumers have reportedly acquired a taste for Mexican products including avocados and tequila. Exports of the fruit have surged from 17 tonnes in 2009 to more than 10,000 tonnes annually, according to Mexican government data.

Chinese officials also said that China was interested in the possibility of pursuing a free trade agreement between the two countries.

Source: CNBC (en), Fortune (en)

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