Mexico as a «divided» consumer market

The average monthly salary in Mexico is 6740 Mexican Pesos in the formal industry and 4’010 Mexican Pesos in the informal industry (Data México, 2022). At the current exchange rate around 320, resp. 191 US Dollars. But the numbers are widely spread. While 2% of household income belongs to the lowest 10% of population, 40% of household income belongs to the richest 10% of population (Central Intelligence Agency, 2022). Consequently, the GINI Index, which shows the degree of inequity in the distribution of income, results in the 8th highest value in 2018 among the 84 countries measured by the World Bank. And where can we allocate the middle class? Under other measurements, the Harvard Review of Latin America (Díos, V., 2022) states, «that the middle class are those households that have incomes higher than the poorest 50% and less than the richest 10%. In the case of Mexico, that would mean the middle class has incomes between US$9,000 and US$20,000 annually».

What does this mean for Mexico as a consumer market?

On the one hand, the 13 million (10%) Mexicans which earn 40% of household income and thus more than US$ 20’000 annually, are potential consumers of products beyond the basic needs or even luxury goods. On the other hand, more than a half of the population earns less than US$ 9’000 a year, which means they can hardly afford goods which go beyond the basic needs. By comparison to Switzerland, Mexican households must spend almost five times more of its income for food, and more than twice as much for transport and health (OECD, 2021). Hence, in an average, Mexicans can spend less for leisure time or have a lower saving rate.

References

Central Intelligence Agency (cia.gov)
Data México (datamexico.org)
World Bank (data.worldbank.org)
ReVista, Harvard Review of Latin America (revista.drclas.harvard.edu)
Organization for Economic Co-Operation and Development (stats.oecd.org)