[Updated Jun 28 *]
Mexican SMEs in the construction sector face significant hurdles on their path to digital transformation, an area in which the industry has traditionally been conservative.
The slow adoption of digital technologies is mainly due to the fact that most of the companies in the Construrama network are small, family-owned businesses. These companies lack the resources to afford the costs associated with the time, money and effort required to implement digital initiatives.
For example, setting up an online store involves:
- A substantial capital investment
- Months of development
- Qualified staff with technological expertise
- Ongoing investment in maintenance and technical support
The collaboration between Stripe and Cemex aptly addresses these challenges by leveraging Stripe’s advanced payment technologies. This initiative is particularly relevant in the Mexican economy, as it will enable Construrama’s small construction business partners to access the opportunities of the digital economy.
The new possibilities will enrich the value proposition for these small businesses, offering them access to:
- A loyalty program
- Financing options
- An online store
- Diversity in payment methods
Desmond Mullarkey, Stripe’s Director of Growth and Revenue for Latin America, explains their solution: “Our marketplace product, Connect, is the best fit for companies like Cemex and Construrama that are at the forefront of digital transformation in Mexico. Not only for the ease and security of processing and dispersing payments, but also for centralizing transaction data, simplifying the operation of the marketplace and stores.”
For his part, Alberto Lozano, Vice President of the Distribution Segment of Cemex Mexico assured that “At Cemex we are certain that the digital era drives our lives, which is why we are proud to collaborate with Stripe to create ecommerce strategies that solve the needs of our Construrama customers and the construction industry, and thus contribute together to the economic and technological development of the communities.”
Looking ahead: Security, adaptation and impact on Mexico’s digital economy
The Stripe-Cemex collaboration could mark a turning point for the digitization of the construction sector in Mexico, with a potential impact that extends beyond this industry.
This initiative not only facilitates the digital inclusion of construction SMEs, but also addresses crucial issues of security and adaptation to the specific needs of the sector.
The security of financial transactions is a priority in this initiative. Stripe implements Stripe Radar, a machine learning-based fraud detection solution, fully integrated into its platform. This technology is trained on data from millions of transactions to recognize both fraud and legitimate transactions, thus protecting users.
In addition, Stripe adheres to the highest standards of security regulations, such as PCI-DSS, and offers API reliability exceeding 99.999% availability, even during periods of peak demand.
In terms of industry fit, Stripe offers a single, easy-to-deploy platform that helps businesses simplify their processes and generate more revenue. This solution is particularly relevant for SMEs in the industry, which previously faced outdated financial technology and manual processes that hindered their growth.
The scope of this initiative, which aims to benefit more than 2,200 family businesses in Mexico and possibly expand to other Latin American countries, suggests the potential for long-term transformational impact. Mexico stands out as the fastest growing e-commerce market among large Latin American markets, with a projected compound annual growth rate of 31% for the period 2022-2026.
Data from PCMI’s E-Commerce Data Library shows that 63% of e-commerce payments in Mexico are made with cards, indicating growing confidence in online shopping and payments.
This collaborative model could become a catalyst for the modernization of other traditional industries in the region. Construction, historically considered resistant to change, could now have the opportunity to lead innovation in Latin America. If Stripe and Cemex can demonstrate the tangible value of digitization for small businesses, they could potentially unleash a wave of transformation that extends beyond the construction sector.
The Stripe-Cemex partnership aligns with Mexico’s broader goals for digital inclusion and economic development. Marketplaces act as gateways to the digital economy, allowing SMEs to start selling to a larger number of buyers without the need for large investments.
If Stripe contributes to modernizing and simplifying the financial infrastructure in Mexico, making digital payments more secure and accessible, it would not only be boosting the development of Mexico’s digital GDP, but also facilitating the inclusion of small businesses in the digital economy.
The future of the industry in Mexico and Latin America could be monopolized not only with leading cement and steel, but also with data, connectivity and algorithms. Companies that do not adapt to this new digital reality risk being left behind in an increasingly competitive market.
The success of this initiative will depend on its ability to overcome the cultural and technological barriers that have held back digital adoption, in a country that insists on maintaining a largely analog and informal economy – but the potential for significant transformation is clear.
* Errata:
The June 28 update corrects an error in the statement and role of Alberto Lozano, Vice President of Distributor Sales for Cemex Mexico.
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