The Virtual Market: “Mom-and-Pop” Shops Reborn
(9 pages of text)
In 2013, two entrepreneurs launched the Virtual Market in Mexico City with a mission to transform small traditional retailers (the so-called “mom-and-pop” shops) into competitive market players. The family-owned shops were strongly embedded in the society, culture, and economy of Mexico and Latin America, producing 50 per cent of the region’s retail sales and 15 per cent of Mexico’s true gross domestic product. However, economic growth had increased consumers’ earnings, leading to previously low-income consumers gaining financial status. The traditional shops were unable to compete with the new demands for cashless payment methods, wider ranges of products and services, and lower prices. To remedy the situation, the Virtual Market gained the trust of the shop owners and worked to improve their financial, technological, and business literacy. By 2017, the Virtual Market had successfully worked with 10,000 shops but had still not attained break-even. Was its business model sustainable in the long term? Could it be replicated in other countries and with other cultures? How could it scale up and secure profits?
This case is suitable for graduate-level or post-graduate-level courses on social entrepreneurship, emerging markets, international innovation management, and business model development and management. After completion of the case, students will be able to
- think critically, analytically, and strategically about the opportunities and challenges of conducting businesses at the base of the pyramid and the middle of the pyramid in Mexican and Latin American emerging markets;
- develop successful innovative business models that address the economic and socio-cultural aspects of the host country’s markets; and
- develop successful strategies for conducting business in emerging markets, in terms of profitability, scalability, and socio-economic sustainability.
Mexico, Medium, 2017
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