Mexico’s western fashion revolution

While its 2012 fashion week was dominated by shows from Mexican designers, foreign clothing brands are breaking through to the notoriously difficult Mexico market. Earlier this year, the Swedish high-street brand H&M opened its first store in Mexico City, along with American retailers Gap and Forever 21.

This is partly due to the relaxation of its trade tariffs and a series of free trade agreements, particularly with the EU. High duties used to price the vast majority of foreign firms out of the market. In 2001, for example, Mexico protected its manufacturers by introducing a 1,000 per cent duty on goods from China.

But in 2000 its free trade agreement with the EU set about gradually reducing such barriers to trade with Europe. By 2007, they had been removed completely and in December 2011, import tax was slashed to 20 per cent.

Previous to this, reports the Economist, the majority of high-street goods – even those by global brands such as Levi’s – were made locally. But it will be hard for Mexican manufacturers to compete with the fast-fashion business model used by the likes of H&M, says Isabel Cavill of consultancy firm Planet Retail.

Quality goods

To keep pace, Mexican clothing producers say that they are focusing on quality, and as Chinese wages rise, foreign brands including Zara and Nike have sought suppliers in Mexico. Nonetheless, 60 per cent of clothing sold in Mexico is currently made in China.

There is however a growing market for quality goods within the Mexican middle-class. More than half of all luxury goods in Latin America are bought there. It’s also home to a large and growing community of North American expats, with 10 million US and Canadians expected to be living in Mexico by 2020.