Home Depot’s international expansion in Mexico

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In 1979, Bernie Marcus and Arthur Blank opened first Home Depot (HD) store in Atlanta, Georgia. The company is unique in selling a wide of product assortment, equipment, tools… With the idea of “Do-it-yourself” (DIY), the company’s consumers are homeowners who need tools and resources to install by themselves, professional customers who are contractors, interior designers…, and finally do-it-for me customers who pay for third parties to do installation services. The company grew quickly, went public in 1981, and opened its 100th store in 1989. In 2015, the company delivered a strong financial performance with an increase of 6.4 % in net sales in US, Canada, and Mexico.

Mexico is one of Home Depot’s successful story. To enter Mexican market, Home Depot acquired Total Home in 2001 and Del Norte in 2002 to become the second largest home improvement retailer. 

  1. Mexicans are very loyal customers and willing to cut back their spendings if they have low disposable incomes. Therefore, HD did not rush to introduce lots of foreign brands but offered brands that Mexicans were used to in order to get to know customers first, gain consumers’ confidence and introduced other brands later.
  2. Since 2008, Mexican consumers were hit by the downturn that made them seek for less expensive brands. HD offered a wide of products at affordable price. Moreover, HD ran their advertisements that promoted its idea of DIY as a way for consumers to cut their spendings.
  3. Number of Mexicans shopping online is increasing. HD also expands to E-commerce in which the company gives consumers online shopping experiences and pick up their orders at stores.

Sources:

https://www.ft.com/content/35cb218e-c4c2-11da-b7c1-0000779e2340

http://www.homedepotar.com/highlights.html

http://bear.warrington.ufl.edu/oh/IRET/Cases/Home_Depot_China_Revised.pdf

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