Ecommerce Fraud Skyrockets in Mexico: 68% Increase

The company Signifyd reveals a concerning rise in fraud attempts during 2023, emphasizing fashion. Hot Fashion, an upcoming event, could be a new target.
Signifyd_Hot Fashion 2023
Signifyd_Hot Fashion 2023

The recent research conducted by Signifyd, a company providing anti-fraud solutions for ecommerce, has identified an alarming increase in fraud pressure in Mexico over the last three months.

Fraud pressure and fraud attempts targeting merchants increased by 68% in June 2023 compared to April of the same year. Additionally, there was a 106% increase compared to May 2022. This growth has been especially notable in the fashion category, where fraudsters are betting on products and shopping carts with higher values, reflecting a 19% increase in fraud pressure in sales volume.

With the ecommerce boom in Mexico, the country has experienced significant growth in the online retail market. The Mexican Online Sales Association (AMVO) reports that in 2022, the market value reached MX$528,000 million, with an increase of 23%. Moreover, more than 63 million people in Mexico purchase products and services online.

Market value of ecommece in MexicoMarket value of ecommece in Mexico. (Source: AMVO)

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Market value of ecommece in Mexico. (Source: AMVO)

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Market value of ecommece in Mexico. (Source: AMVO)

Facing Latin America, Mha Consulting emphasizes that Mexico ranks second in ecommerce sales with 24% of the market and an annual retail ecommerce sales growth rate of 16.3%.

Despite these positive figures, Mexico leads in e-commerce fraud risk in the region, with a growth of 72% per year, three times faster than the growth of electronic commerce.

The popularity of discount campaigns like Hot Sale and the limited operational capacity of merchants due to the sudden increase in purchase orders make fraud attempts go unnoticed. This results in chargebacks and significant financial losses for businesses.

Christian León, General Director for Latin America at Signifyd, warned:

“Hot Fashion 2023 will likely follow this pattern of increased fraud pressure. The fashion category has seen 45% more sales than last year, meaning an above-average increase across all types”.

In this context, Hot Fashion, the sales campaign focused on fashion from August 14 to 21, could be a new hotspot for fraudulent activity. According to the AMVO, consumer interest in niche sales campaigns has shown steady growth, with Hot Fashion having the highest increase at 10% compared to the previous year.

ClearSale has found that some of the most sought-after products by fraudsters are high-end cell phones, 40 to 50-inch screens, video game consoles, branded tennis shoes, alcoholic beverages, perfumes, and washing machines. These products are among the most requested by Mexicans, according to the AMVO.

Online shopping preferences of Mexican usersOnline shopping preferences of Mexican users

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Online shopping preferences of Mexican users. (Source: AMVO)

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Online shopping preferences of Mexican users. (Source: AMVO)

The combination of an expanding ecommerce market, the increase in the popularity of sales campaigns, and fraudsters’ preference for high-value products highlight the need for more rigorous vigilance and protection against fraud. Signifyd’s findings underscore the urgency of effective prevention and detection measures, especially in a country where the risk of fraud is growing alarmingly.

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