How Mexico City is saving the tiendas from OXXO

In most parts of the world, but most evident in the so-called “Third World,” unequal commercial competition is a pervading problem which has slowly crept into our societies. To put it plainly, large corporations have created similar-appearing stores of all kinds which have severely affected small independent businesses. This has led to the closure of many small businesses, thus creating unemployment for a large population of ill-prepared individuals whose activities were centered within the confines of these small non-technologically oriented businesses.

This is an unfair and unacceptable social situation, which needs to be corrected.

The “government” or the “state” is best positioned to handle this responsibility. An example of this is what we have begun to do in Mexico City. When he took office, the city’s elected mayor, Miguel Angel Mancera, created the country’s first Ministry of Science, Technology and Innovation and appointed me as the person in charge. One of the first actions taken was a program focusing on the negative impact of convenience stores (which incidentally have flourished at an uncontrolled rate), on small family businesses that are deeply entrenched within the most marginal sections of Mexico City.

These small family stores, which have existed for years, have suffered from the spread of convenience stores such as Oxxo and 7-Eleven. Some of these small family stores have closed, while others are struggling to survive. These small businesses lack modern technologies and strategies to make them capable of competing with stores supported by large and wealthy corporations. Thus, we embarked on a program aimed at providing modern technologies to these small stores at no cost to them. The project, financed by the ministry, is called “Tecnotiendas.”

This means that this required a modernization process which allowed them to be able to charge with credit cards (which they didn´t have), to have access to the cell phone credit system and so on. In other words, all of their business was previously carried out on the basis of an immediate cash-pay system which tended to drive away many clients. This created an unfavorable client-owner relationship since they lacked the basic modern technological tools to provide a more attractive service. In addition, store owners and employers were given a three-week course that focused on managing a more modern type of store with new (for them) ways of presenting their products inside the store as well as better strategies for operating their business.

After almost three years, we have now about 3,000 such stores in Mexico City and aim to have 7,000 or more at the end of this mayor’s administration. As part of the project, we asked the Institute of Social Sciences at the National University of Mexico to assess the results of this effort. The results showed that 90 percent of the stores were extremely successful. Sales increased an average of 30 percent from all stores and general conditions were seen as a permanent road to improvement.

This effort illustrated how government investment in technology can help vulnerable workers face stiff competition from powerful corporations that prioritize profit over helping the community.

In this respect, this program and others we are in the process of developing show how government investment in technology can help the most vulnerable members of society survive against stiff competition from powerful corporations that prioritize profit over helping the community.

Contributor: Dr. René Drucker-Colín is in charge of the Ministry of Science Technology and Innovation of Mexico City.

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