Webinar Transcription Josh Halpern (CITC): Welcome to the “COVID Conversations from the Field.” Today, we’re going to be talking about the Mexican beauty market ecommerce and how COVID-19 has impacted it and, nonetheless, how you can take advantage of the opportunity sitting from your home in the United States. Just to give you a quick update, I’m Josh Halpern, Chief Strategy Officer for the California International Trade Center – CITC. Our mission is to help small and medium businesses go global through self-service digital tools and through ecommerce direct-to-consumer channels, such as which we are talking about that today. I oversee the strategy for CITC. I used to be a U.S. Commercial Diplomat, helping U.S. companies enter overseas markets, particularly in China, through ecommerce. I launched the ecommerce Innovation Lab for the U.S. Department of Commerce to help companies go global through ecommerce. I’m still an advisor for an organization or initiative that I started years ago called Getting to Global that helps companies from different countries to go into different countries, a lot of public-private partnerships that we have around the world. And then I run a Vanbassador, which is a van and I go around the State of California interviewing companies and entrepreneurs about how they’ve gone global and working on ways to launch them into overseas markets. Let’s talk about COVID-19. Obviously, a lot of people who are on this call already understand that Mexico is a huge opportunity, a great market, a lot of growth in ecommerce, up until recently, very low penetration in ecommerce usage. What does that mean for us? It means that now is the time, with everybody forced to go online, it’s accelerated the penetration of ecommerce, the online purchasing, and we’re going to learn some further details around that in a few minutes. But that’s what we’re trying to figure out today, and why you’re on this call, how has this presented as an opportunity of your next step in strategy? I would argue, and it looks like we’re going to find out that there is an opportunity here for certain product categories. We’re going to start talking to Alejandro. Alejandro comes to us from Linio (www.linio.com.) Alejandro, could you start us off? Who are you? COVID -19 Effects on the Mexican Market Alejandro McKelligan (Linio): Hello, Josh. Thank you for this space. Well, I’m Head of Brand and Seller Acquisitions for Linio. Linio, as you already know, is one of the top ecommerce marketplaces in Latin America, present in five countries and with the possibility of enabling international sellers, sellers from all around the world, to publish their products and send their products to our regions without necessarily being on that regions. I’m in charge of the team bringing more sellers and more brands to the Linio and Falabella ecosystem online. Josh Halpern (CITC): Great. Thanks, Alejandro. Let’s dive right in, okay? How has COVID-19 accelerated the purchasing, or has it? Alejandro McKelligan (Linio): Well, right now, I mean, just as a start, I know this is a difficult situation for everybody. We are all having struggles, and we are all having a difficult moment right now. We, as Linio, are taking, obviously, all the measures to protect both our consumers and our people, our teams, either working by home or with the correct measures of security with the people on the warehouses. Now, besides that, it is important to say now, that, yes, we are having, and we are expecting some increases into ecommerce sales as a consequence of what is happening right now. Some of the first things that we can see right now happening is, specifically in Mexico, first of all, now, the people are not having the possibility of going to shopping malls. Recently, the government made a quarantine able not applying just for offices, but also for shopping malls and shopping centers, meaning people is not able to go to shopping malls unless those are supermarkets with basic products. This is bringing, obviously, a lot of people that usually go for shopping malls to start going into what is happening in ecommerce. Next, something that we are seeing a lot is increase of devices use at home. As we can see, people mostly use their cell phone when they are out of home, probably with less possibility of wondering on what’s happening in ecommerce. Even if we have a strong application and other marketplaces have, it’s always easier when you’re navigating your desktop. Now, because of these restrictions and this quarantine, people are going into ecommerce not only by their cell phone but fully by their laptops, computers, tablets, having more exposure to what’s happening inside the Internet world and specifically in the online marketplace. Another thing that we are seeing in Mexico happen is we know as a fact that 41% of the consumers, ecommerce consumers, is based in large cities, specifically in Mexico City. Mexico City is one of the most quarantined zones right now in the country. Therefore, most people are not going out or barely going out for basic needs, so they will be interacting more and more in these days and these months into their electronic platforms. Ecommerce and Main Categories Josh Halpern (CITC): Okay. Talking deeply, categories, the impacts of categories. What are we seeing? Alejandro McKelligan (Linio): Just as I said in the before, in the slide before, there is an increase in the consumption and an increase in the hits, in the web page hits by number of consumers entering to ecommerce marketplaces. If we see this by categories, we are, right now, starting to see some trends of sales increase in specific categories. Based on data that we are getting from news in other marketplaces, in other countries, and in our country, obviously, we are seeing an increasing demand of first, office supplies, with more than 200%. People is needing office supplies like printers, scanners, paper because they are moving right now all their offices and all their operations into their homes. Second, health supplies, and this is logical. We’re not speaking specifically around medicines, but everything regarding hygiene and health supplies. Computing, it’s also increasing 93%. This is also obvious. Many people who used to not have a laptop in back home or not having a desktop back home because they used the one at the office, is starting to need to use this, along with special accessories to bring the possibilities of an office more reliable, like a webcam, like a better modem for connecting. And now, going exactly to the point of this discussion right now, health and beauty is also growing. Around 77% of consumption versus year ago in the same month is increasing in the health and beauty consumer section. We’re going more deeply into it in the next slides, but it is important to say, yes, people is responding to this. They are needing more health and beauty products. They are having the time for treatments. They are having the time for taking special needs, healthcare, and beauty needs, and now, more than never, they are having the puzzle of purchasing and using these products back at home. And obviously, sports, people, as they are not going out or going to the gym or going to do their regular activities, are looking for a way into taking out that energy or keeping their routines, what they were doing in the past so that they can keep their fits. Now, we, obviously, have a lot of family interaction. And, well, in family interaction, a lot of gaming is happening, but also a lot of sports are happening. Now, some data that I’m showing right now on this slide, just to state briefly what’s happening in Mexico. In Mexico, 48% of the consumers, ecommerce consumers, are women, whereas 52% is men. So, we can see a very balanced ecommerce audience. Therefore, most of the categories would have a natural evolution, not balanced by the gender, but really balanced through that. Now, something additional, 6 in every 10 online consumers in Mexico are looking for international products. This is especially important for this discussion because people are not limiting to what their national offer or national websites are offering. They’re looking for international brands. They’re looking into what’s happening in the international websites, if they can buy it, if they can bring it. And this take us to another point that is critical for what’s happening on ecommerce and specifically to know your target markets. Today in Mexico, at least 27% of the consumer on ecommerce is in the segments A, B, meaning high-income buyers. Second segment, which is the most important, 30% of the sales in ecommerce are coming from the C+ level, middle class. Now, going back into segments A, B, why is it important to say this? The high-income population, that already is an important target for ecommerce, they are also an important target for traveling. They do a lot of international traveling, international shopping. And now, due to the restrictions in traveling and due to the restrictions in shopping malls and shopping centers, it’s obvious that the percentage of consumption in this market is going to increase a lot. Let’s remember, this is a market that has a high income with the possibility of covering all their basic needs without any problem. Therefore, they would be looking for all the other categories online now that they do not have the possibility of either traveling or going to shopping malls. Then we have the C+, the middle class that I was talking about. It is, right now, 30%. It represents 30% of the total ecommerce buyers that go through Mexico. Why this is important? The middle class usually does not travel a lot, but do go a lot to shopping malls and shopping centers. Now, because of the quarantine, they’re not able to do that. So, they are going to focus a lot more on what’s happening on ecommerce and if they can satisfy this primary products and secondary products through the online channels. Josh Halpern (CITC): Thanks, Alejandro. That’s extremely interesting. Thought that I hadn’t really, it hadn’t really clicked for me, is that, all these consumers who traditionally will go and show up in some of our clients brick and mortar spaces and now can’t go there, they still need their products, and they’re finding ways to get it. Correct? Alejandro McKelligan (Linio): Right. Absolutely, correct, Josh. Ecommerce & Health and Beauty Industry Josh Halpern (CITC): I want to go now to our Specialist in the category Health & Beauty, Montserrat Diaz. Thanks for joining us, Montserrat. Tell us, what is your focus, and how can we be enlightened? Montserrat Diaz (Linio): Hi, Josh, and thanks for the invitation. I’m Head of the Softline category, which includes Health and Beauty, Fashion, Sports, and Consumer Goods. Basically, I’m going to talk a little bit more in-depth of the situation in Mexico with the health and beauty category. What has been the consumer landscape in the wake of the Coronavirus situation? We’ve definitely experienced an interesting behavior in sales, in certain subcategories that are taking more relevance. Here, we can see the comparison between the sales of February from this year and March, which, basically, it’s the month that the whole quarantine started to happen. There are certain subcategories and types of products that are taking a little bit more of a relevant role, just to be, for example, in skincare, there, we have facial masks, types of eye creams and serums. There are certain types of products that the consumers are applying on their own home because they can’t go out to a spa or to the salon even, so they have to occupy their time in giving themselves a little bit of pampering and maintenance as well. How does the Mexican market differ from the U.S.? Well, Mexico is the third-largest online destination in the American continent. As Alejandro had previously mentioned, the gender participation online in Mexico, it’s pretty balanced. We have 49% in men, to 51% were women. Regarding Mexico in Linio, 45% of our sales are made by our women, and almost 60% of Mexican consumers have purchased a health and beauty product at least once online. Within the health and beauty category, we have a repurchase rate that it’s quite interesting because it’s a consumer good that you use almost daily. If we can engage the consumer with a really interesting catalog and a really competitive price, therefore we can ensure a certain sales volume throughout the year. And also, the last thing that I’d like to highlight here is that the Mexican consumer likes to take care of themselves. They’re pretty up to date with the latest products, the latest trends because of the close proximity to the U.S. So definitely, there are some interesting demand for these types of products, and that’s why international marketplace is such a great ally to enter the market. Josh Halpern (CITC): Yes. I mean, this is less COVID-19, more impact of USMCA. But a lot of our companies are still also trying to figure out what that means for them. Marketplaces Packaging & Pricing Montserrat Diaz (Linio): Here, I’m going to focus on packaging and pricing. With packaging, there is not really a strict requirement, and there is no need to translate the shipping labels to Spanish. We, on our platform, only have seller center, which all of the sellers can print the label, and it’s pretty seamless that part. However, with pricing, I’m going to get a little bit more in-depth here. Currently, we have a US$50 threshold for taxes and duties. So, in order to be competitive in the market, we have to focus on items that don’t surpass this amount. There are certain categories or products that are going to be more than US$50, but we need to make sure that it’s of an established brand or they have an added value. Here, I’m putting a couple of examples of how our price structure is basically being made. So here we have one example of an SKU that doesn’t apply taxes or duties and another one that does. The product price, it’s, basically, your cost and your margin and from there, we’re going to start constructing, all in U.S. dollars, and then we’re going to convert to the exchange rate. Let’s say that, for the first example, we have US$25, the commission for the health and beauty category is 14%, which is $3.50, and then we have the shipping cost. Here in Linio, we have several agreements with couriers that we can offer to our sellers, and this is an example. These shipping costs comprehends the first half kilogram. If the item weighs more than half a kilogram, then the difference will be appearing on checkout. Then, we have a fixed fee of $0.80, and because the original price is US$25, and it’s less than US$50, we don’t apply taxes or duties. So, basically, our final price is US$39 and that we have to convert to local currency, which it would be 941 Mexican pesos. One thing that I’d like to highlight here is that with taxes and duties, we use the DDP, which is Delivery Duties Paid. In this way, the courier is functioning as a customs agent, so the delivery is much faster and with no complications from seller to our customer. Josh Halpern (CITC): Let me just dive in there. Just to understand, everybody. Delivered Duties Paid, the idea is that when your consumer is on a Linio site, let’s say, the duties and taxes for the product to arrive from your warehouse in the U.S. to them in Mexico is already calculated and paid by the consumer at the point of purchase so that when it does arrive in their door, they’re not then in post receiving it, have to go out to the post office, which today you won’t do, or somehow, pay that amount. Correct? Montserrat Diaz (Linio): Exactly. The DDP that we put on our platform; it comprehends all. It includes taxes or duties, if they apply, the shipping costs. So, there is basically no hidden cost for the customer. They pay one price, and that basically manage the whole operation. Josh Halpern (CITC): Well, so when we talk about de minimis, everybody, that’s the US$50, every country has varied minimis, and it means anything under US$50 does not get hit with the duties and taxes as you’re seeing there in the VAT and duties categories. But is that based on the US$50 of the product price or after the final price? Montserrat Diaz (Linio): No. Of the product price, which is the original of the cost and margin of the product. And then from there, we start to construct the whole price. Josh Halpern (CITC): If this product price is under US$50 even if at the end, here, and the final price is larger than US$50, it still ends up being under the minimis and not triggering. Montserrat Diaz (Linio): Yes Josh Halpern (CITC): Okay. Great. Thank you. Montserrat Diaz (Linio): And regarding the restrictions for importing health and beauty products, there are some key elements that we have to highlight. Basically, anything that we could ingest, such as dietary supplements, vitamins, protein powder, we can’t personally import this. Skin whitening products because they have certain actives on their formulas and they have direct contact with the skin. Medical products and equipment, and last but not least, flammable goods, such as hairsprays, anything that can caught on fire because these products are going to be sent by airplane, and we have to minimize that risk. Josh Halpern (CITC): But you can send those out. I mean, a lot of our companies do have those types of products. How do we get those into their country? Montserrat Diaz (Linio): For example, that’s a lot of coordination with our operations team and agreements that we can manage with the couriers in this case. But, for example, fragrances or perfumes, that they have a certain percentage of alcohol in their formula, we can definitely sell this. What we need to add, it’s another step in the process of having a security document, an MSPS, basically, and once we have that paperwork, we’re good to go. Josh Halpern (CITC): Okay. And again, just to the people who are watching at home, you have the ability to dropship, which is the idea that you still keep the product in your warehouse, and then you ship it directly to the consumer or sending it to fulfillment by Linio experience, similar to fulfillment by Amazon, with a warehouse still in the U.S. and then going cross-border direct to the consumer. In those cases, both of those apply in this scenario. Montserrat Diaz (Linio): Yes. Exactly. Josh Halpern (CITC): You also can sell on your own website. You do not need to use a marketplace like Linio or others. But, again, then you don’t have the consumers coming to you, and you have to deal with a lot of this stuff yourself. But again, this is not a unique scenario in terms of price structure, other than, obviously, the commissions, then what you would have to deal with, but it’s definitely a strong option. And we’re going to find out more with Niko in a second. Montserrat, thanks so much for that insight. Montserrat Diaz (Linio): Okay. Thanks. Josh Halpern (CITC): Niko, thanks for joining us. How are you? Nikoloz Gelashvili (Swishpop): Thank you. Thank you for having me. Hi. How are you, Josh? Linio Seller Success Case – Swishpop Josh Halpern (CITC): Good. Let’s talk about, first of all, could you just talk to us a little about the origin story? Swishpop, it’s part of a larger group. Where are you in the world right now? Nikoloz Gelashvili (Swishpop): We at the company have a few different divisions. One of them is the Swishpop (https://swishpop.com/) for internationally, where we ship directly to the consumer from United States. We ship to more than 130 different countries, delivery time, less than 10 days. Swishpop is more internationally, and we are dealing with the beauty category, that includes the fragrances, skincare, haircare, cosmetic, bath and body, makeup, and then all others, especially natural and then organic products, also as well. Josh Halpern (CITC): Is, this is your website, direct-to-consumer globally, essentially? Nikoloz Gelashvili (Swishpop): This is something that’s coming soon. We are testing right now, our official website, but we are dealing with more marketplaces like the Amazon, Linio, and all other ones. Like, there are maybe, like, 650 and more. We’re dealing directly with the marketplaces. But we also want to launch our own website. We had before, but we want to just change a little bit because twhen you have your own website, you need to have all the duties and taxes calculation and everything, so we are working on that. But that’s something, it is coming soon. Josh Halpern (CITC): Great. Okay. And where are you in terms of your U.S. sales, international sales, in terms of percentage and how much online versus offline? Nikoloz Gelashvili (Swishpop): I can say 50/50 right now. Today, we ship approximate 50,000 orders directly to the consumer every single day. So those orders are going half in USA and half is going internationally, including the biggest players like China, to Japan, to Southern Asia and then to Europe and then South and North America. I can say maybe half and half. We ship the orders in same day, that we have a very unique operation here and what we’ve done, if someone placed their orders online, the item, it’s already out physically two business hours. Josh Halpern (CITC): And you’re fulfilling, from your warehouse, you label locally, and then you ship to anywhere in the world? Nikoloz Gelashvili (Swishpop): Yes. Everything we have, the automate because today’s world, we are following technology. We are almost integrated with everybody for any kind of integration, including to API, to EDI, and all other. Josh Halpern (CITC): Okay. Let’s talk about particularly COVID and how that’s impacted your business, everything from your total sales, certain product categories, but also, you know, how are you dealing with shipping? Is your staff safe, and what are they up to? Nikoloz Gelashvili (Swishpop): Yes. That’s a very bad situation we have, and I hope you guys at home are doing fine and your family and then, this is a very difficult situation, so it’s a lot of stress. First of all, we are from New York, so this is crazy here. But when we see the positive side, we see a lot of ecommerce orders going so much faster every single day. So, if you can compare today’s order exactly one year back, we have maybe 30%, 40% more orders coming in than last year at the same time. I mean, every year, we are growing, but we never saw like that grow before like today, and then I understand why because most of the people might be cannot go outside to shop so they’re trying to order online, and especially international orders are going and popping up, especially from Europe and then from South America as well. Josh Halpern (CITC): Now, obviously, you sell almost half through distributors, and some of those distributors are online and off. Have those sales dropped off while your direct-to-consumer has increased? Nikoloz Gelashvili (Swishpop): Yes. I can say that because of the brick and mortar, and then the retail stores are right now, some of them are closed and that people cannot access to, some of their warehouses cannot function right now, most of the orders we see increasing so B2C than B2B, so business-to-consumer orders are actually growing up than B2B orders, business-to-business. Josh Halpern (CITC): How have you adapted, or how have you been adapting your strategy, given some of your attention as well? Nikoloz Gelashvili (Swishpop): Actually, it was very confusing, but then once this virus came here and everything got really crazy, we find out that so many stores got closed around USA and also internationally and then when we see, we start preparing a lot for the inventory side, especially for the beauty items, we have the specific items, which once the people needs right now, especially in the bath and body area, that includes the soaps and all other categories, including the hand sanitizer items and others. So, we try to stock and support wherever we can and everyone but it was a little bit confusing the last two, three weeks, we don’t know what’s going on, but now, we have to live with it. Like, every day, we brush our teeth, we have to wear the masks now. So, it’s crazy. Josh Halpern (CITC): Yeah. And I presume your fulfillment center, you have reduced essential staff, and they’re wearing gloves or how is that working? Nikoloz Gelashvili (Swishpop): The first thing we’ve done, is that most of the people are working for home. We have to distance from each other, we have half, and maybe more, half then office staff, so we make sure that they’re not close to each other, and we have the mask, gloves, and hand sanitizers, everybody few feet, everyone. So, we’re taking this seriously because we are in transportation and in the beauty business, so we are in a social business side, so we have to make sure we are keep going and keep working. Josh Halpern (CITC): Have you been increasing your focus and spend and marketing for digital marketing direct-to-consumer versus previously? Nikoloz Gelashvili (Swishpop): Right now, I mean, we see much more the organic sales than the pushing from the marketing side from the campaigns, like, for the sponsored products. We have a separate division, actually, for the digital marketing group who has concentrate only for that area but right now, I can say we see more organic visitors and traffic then through from campaign. But we are still working from both sides. Josh Halpern (CITC): Now, let’s talk about your entry into Mexico, particularly, protocol. Obviously, this is the test site, but here you are on Linio in Mexico. First of all, what’s the process that you did with engaging with Linio? And again, this can apply, for those listening at home, to multiple marketplaces, and really, even multiple countries, but we’re going to be talking specifically around Linio and the Mexico beauty industry market entry. Nikoloz Gelashvili (Swishpop): I can say Linio is very different than any other ones and I’ll tell you one, that’s why, because to go international, the first thing you need to have is the logistics, a strong logistics solution because people right now, they can place their orders online internationally, but now, people wants the product to get faster than before. So, what Linio has done is Linio take care of all of the logistic. What we do, when you ship from USA, from here, from New York to Miami, I believe, and then from Miami, they’ll take it to the consumer, end of the consumer. So, we’re not really doing all this process of the logistic. Logistics are so hard today, internationally, to do your own. So, what Linio does is, from their side, is make this easier for United States sellers to sell their products in Mexico, to take this headache, what is logistics side. That was one of the biggest parts. And also, the Linio has a lot of good visitors, and we see the website looks so great and so good search engine works very well. We checked that. And beauty categories could be one of their biggest and faster-growing category for them, and that’s good news for us. And we are happy to work with Linio, and we see we’re growing there. Josh Halpern (CITC): Again, for those of you at home, this is a model cross-border direct through a marketplace. The idea of you keeping the same facility you have and the same fulfillment you’re doing in the U.S., but now you’re getting orders internationally through a marketplace, pre-labeled, prepaid, as we talked about earlier, with duties and taxes, you slap that label on in your warehouse in the U.S., and now you’re fulfilling almost as a domestic sale to Miami, essentially, then being taken over by Linio to be imported with these individual consumers, the import of record, if I’m correct? Nikoloz Gelashvili (Swishpop): Yes. Then this is very unique because not so many marketplaces can do that same. So, this is very, very good because it’s helping us a lot. Josh Halpern (CITC): And I want to just point out, so for those of you, so you see there’s a little airplane right there, that means that the consumer in Mexico sees that it is actually being shipped from the U.S. And that’s particularly good because some consumers really want to know that it’s authentically coming from the U.S. and they’re willing to wait for it at this point. Nikoloz Gelashvili (Swishpop): And then also, I listened to Monserrat mentioned about duties and taxes, that’s very good. When you have your products under US$50, you’re actually getting that discounted more than 15% to 16% because the customer is going to avoid to pay the duties and taxes, so you don’t need to mark up your products to pay that extra fees, which is really good and you can sell a lot of your items, which is our items are actually under US$50, US$60. Josh Halpern (CITC): I noticed that you’ve got, yeah, everything’s under about 1,100 pesos, certainly. And so, Montserrat, are you seeing, across your categories, that most of the brands are trying to stay under that amount? Montserrat Diaz (Linio): Yes. Totally. And we have multi-item orders, so that’s the really upside of having products under US$50. We’ve seen even, if we have a really good price and a really attractive product, we’ve even experienced multi-item orders of five pieces of the same SKU. So that’s the interesting part. Josh Halpern (CITC): That’s a big question for a lot of people. If I take up, if a consumer wants to bundle three different products and the total becomes more than US$50, does that still fall under the de minimum? Montserrat Diaz (Linio): No, just per SKU. Josh Halpern (CITC): Per SKU? Just so everyone knows. If you buy three of the same items, same SKU, that doesn’t count. If that’s over US$50, it hits the minimum, but if it’s three different items, it doesn’t? Montserrat Diaz (Linio): It depends on the different items that you add to the cart, the price in the threshold, basically. Josh Halpern (CITC): For example, if you take those three items on the screen, the first three, and the consumer bought all of those, and it ultimately, is more than US$50, does each one then get hit with the duties and taxes as if it’s over the minimum? Montserrat Diaz (Linio): No, because we’re seeing per SKU to you. As you can see on the chart, on the previous chart, that we have a price per SKU, so it, basically, takes up a side. Josh Halpern (CITC): And then also, how are you seeing in terms of, Niko, your delivery times to the consumer, and then also, Montserrt, what are you seeing overall? Is it longer to ship, and are people waiting? Nikoloz Gelashvili (Swishpop): Right now, we see less than 10 days delivered to the consumer, which is a very good thing because that’s the international orders. And then we don’t have any complaints at the moment, any bad feedbacks about the delivery time. There can be some remote areas, maybe, but it takes a little bit, much longer that area because Mexico is huge and big, but most of the centers are delivering on time always. Josh Halpern (CITC): I imagine people are more patient than they ever were at this point. Montserrat Diaz (Linio): One upside on Linio part is that we are monitoring every single day, any updates regarding customs, or even delays. If we are experiencing any delays, we have an area in Linio that is of our customer service, and they contact the customer, and they explain, like, “Your order is being shipped, just we’re presenting a little bit of delays.” We’re keeping the customer, every time, super updated. Josh Halpern (CITC): And are you finding people are somewhat patient at this point, the general consumer sentiment? Montserrat Diaz (Linio): Yes. Everyone’s being very understanding because of the whole situation, we’re basically all in this together. So basically, we haven’t been presenting any problems on that. Josh Halpern (CITC): Great. Thank you. Niko, have you been adjusting your prices for Mexico? And this may or may not be related to COVID-19, but do you adjust your prices for a given market? Nikoloz Gelashvili (Swishpop): Yes. We try to don’t do that, but if the logistic prices are increasing, for example, we got some logistic couriers send off the email, they’ll have to add some charges a little bit more because of the situation today, there is not too many flights, and then we have to add a little bit, but we’re trying to don’t do that. So, we try to the customer get the same price before the virus came. But we are trying to make the balance for that, but if the logistic is going up, we have to also to adjust. But again, we are working so closely, whatever situation it is today, and we’re trying to understand, and we’re trying to help today, our customers, that we do the best customer service to best prices of the product. Josh Halpern (CITC): Okay. Thank you, Niko. And again, I see here an example of a checkout yet you didn’t do anything, and I presumed, Niko, your team, sent the product information, maybe even in English, although you have Spanish speakers on your team, and then Linio has an account manager or has people who can help through with that. Nikoloz Gelashvili (Swishpop): That’s one of the, another brilliant thing about Linio. They have that service and we just really don’t need to do anything, only give them the SKUs and product information, and they’ll take care from there, including the logistic on top, so that’s a really good service. Josh Halpern (CITC): Okay. We talked a little bit about the challenges with logistics, your experience so far, and the international experience thus far with Mexico. What’s your next step, or what are you thinking of doing? I understand, also, in certain marketplaces, I think Linio is one of them, too, you can do a shop within a shop, which is basically your own branded store on Linio, you can also have your own website and all that fulfillment and logistics managed by Linio. Are you thinking of doing that? Are you looking at pushing your new global site as well? Nikoloz Gelashvili (Swishpop): Our next step, I think in Mexico, it will be to give more assortment and more selection. The more selection you have to the people, that’s one of the biggest keys to a successful ecommerce business today, especially in cross-border. The items they don’t have in Mexico, especially the brands, which is are launching a lot on natural products, organic products and then they come from United States, and then those brands are looking to get to the Mexico, we are the bridge who’s presenting those brands to the Mexico market. So, our next step, it will be to give more selection to the Mexican people and then give them very nice and cool brands, and, which ones they are already accessed before. Josh Halpern (CITC): Alejandro, Montserrat, are you seeing per what Niko is saying, I mean, if you want to give more selection? For companies that we do have, that only have one to five SKUs, they’re probably not going to be growing that. Is it better for them to do all this engagement with Linio for a direct-to-consumer, or is it also useful for them to try and find a distributor in-country that has multiple brands already and then may have a wider variety on their store on your platform? Alejandro McKelligan (Linio): I mean, the way I see it is, even if you have one product or 5,000 products, the possibility that Linio gives you is that you can have access to more than 2 million different customers and you’re going to be able to be shown in the product listings with many other products. It’s not that just because you have five products, we are not going to be able to have exposure of you. We can give back as much exposure as you want to those five products, or for people that has 500 products, we can be able to manage which exposure they give to different products. Josh Halpern (CITC): Okay. Thank you. So, look, everybody, if anybody has questions, of course, we’re slowly wrapping up here. But I do want to say thank you to everybody, Montserrat, Niko, Alejandro, the teams that were behind all of this prep, our team at California International Trade Center (www.cainternationaltrade.org.) You can get in touch with these guys both on their own LinkedIn site. We’ve also created a special site for Linio and their team on CA Export Connect (www.caexportconnect.org). I encourage you to engage with any of the marketplaces, frankly, and Linio is definitely one of them. Leverage their knowledge, especially in the beauty category. Montserrat and her team have been great with a bunch of companies that we send their way. They have an onboarding process to get you selling direct to consumer, which I think is really useful, especially drop shipping so you’re not changing, and it’s a great way to incrementally go to Mexico, incrementally test the market, and again, with COVID-19 coming up, the arguable silver lining is that you are home, it’s a new market, and people are buying. It’s the one area that the world, that’s increasing in sales. So, I definitely encourage that. Again, I’m Josh Halpern, the host of the “COVID Conversations from the Field” series. This has been Mexico beauty market entry. Thanks for joining. If you have any further questions, definitely follow up with myself or with the team, but actually, just go straight to the website, www.CAinternationaltrade.org. Thanks for joining us, and thanks, everybody.