Digital Consumption of Teens and Young Adults in Mexico

March 2016
First wave: Teens and Young Adults-Mexico
The digital consumption on the base of the pyramid

Index
Origin of the study1
Main insights3
Objectives and Methodology2

The value of understanding the base of the
pyramid
A better understanding of the segment means better business opportunities for the industries. This
because offers and consumer needs are more accurate.
From The Cocktail Analysis we want to contribute to the knowledge that brands and organizations have
about the base of the pyramid, making emphasis on the digital field and the young consumers, all this
because of the following reasons:
● We are talking about a segment with a great weight considering the total population in Mexico, in
terms of volume and purchase power.
● Compared to other profiles, and even though in the last years the brands have started to be
interested on them, the research focused on the base of the pyramid is still rare; and the public
studies are even less frequent.
● In particular, it’s relevant to have an approach that makes emphasis on the digital field. This has
become one of the main opportunities this segment has found to get close to information and
consumption that were not accessible for them before.
● The young people are the ones that have the main role on the approach of the base of the pyramid
to the digital media; they are also the ones that will experience the expansion of the possibilities of
consumption of the segment.

According to the BID (Banco Interamericano de Desarrollo), the
BoP constitutes the 75% of the total population in Mexico and
it increased 10% between the years of 2000 and 2010.1
¿Why should we study the base of the
pyramid?
*MIllones de habitantes
The size of the BoP Market was approximately of 170 Billions of
dollars only in México for 2010 and it has grown 22%
comparing it to 2000.
The future middle class, “hidden” on the base of the pyramid.
1 BID, “La base de la pirámide en México” (2015)

Why the base of the pyramid?
Título de la sección //
Currently there isn’t a research that approaches the use and
consumption of digital services and products on digital media,
however:
● According to the BID (Banco Interamericano de
Desarrollo), the BoP in Mexico constitutes the 75% of the
total population in Mexico.1
● The average expenses related to TICs of the BoP has
increased a 76% since 2000. 2
● It is possible to observe increasing levels BoP
bancarization because of the appearance of new
financial products that aim to hit this segment.
● The constant appearance of new players that help the
access to technology.
● The increasing internet access of all socioeconomic
segments due to the public and private efforts.
1. Banco Interamericano de Desarrollo. La base de la Pirámide en México. 2015
2. Nielsen. Consumo del nivel socioeconómico bajo. Nielsen Homescan. 2013

Why making emphasis in
the young?
Título de la sección //
● On a demographic level, the number of young people (15-
35) in Mexico is 38 Millions, approximately the 31% of
the total population.
● Their educative level is higher than the one of their
parents. The national average of education has increased
from 8.6 to 9.1 in the last 5 years.2
● The young people of the BoP, just like any other segment,
are the ones that feel more comfortable and are more
familiar with the digital world.
● According to the AMIPCI, 63% of the internet users
belong to the age range between 13 to 34 y/o.
● It allows us to predict trends in the short and middle
term as this segment will become the new consumer that
acts and thinks under a completely different criteria
compared to other generations because of their closeness
to the digital world.
1. INEGI.Censo de Población y vivienda.2010
2. INEGI. Encuesta Intercensal. 2015
3. AMIPCI.11° Estudio sobre los hábitos de los usuarios de Internet en México 2015

To go in depth about the role that technology and the digital field have in
a context of use and consumption of services and products.
To make emphasis on the young generations of the base of the pyramid.
To explore different market segments (e-commerce, services, tickets, food,
travel, etc.)
Objectives

Methodology
On a methodological level the research was carried out through:
● Desk Research of the state of the art about studies focused on the Base of the
Pyramid, Demographic data and consumption on this socioeconomic segment.
● Field observation through ethnography and 20 semi structured interviews in
situ on public spaces where -according to official institutions (INEGI)- we can
find concentrations of low income homes.
Squares:
● Urban concentrations:
○ Delegación Cuauhtémoc, Distrito Federal
○ Delegación de Iztapalapa, Distrito Federal
○ Ciudad Nezahualcóyotl, Estado de México
● Rural communities:
○ Deputations of hard access to internet in the states of:
Morelos, Puebla, Hidalgo and State of Mexico.
Profiles:
● Teens: Men and Women 15-19, NSE E/D/D+
● Young adults: Men and Women 20-35, NSE E/D/D+

Characteristics of the interviewees
Urban concentrations Rural Communities
Young Adults
20-35 y/o
Teens
15-19 y/o
Farm workers
Industrial Workers
Basic education and
unschooled
Students
Basic education and with
possibility of higher ones
Students
Basic education and with
possibility of higher ones
Half time employees
Industrial Workers
Service
Professionals
Education
Elementary/Middle/High
School/College
We chose the following profiles:
● Young Adults: 20-35 y/o, SEL D/D+/C-
● Teens: 15-19 y/o, SEL D/D+/C-

Comprehension Framework:
Urban
Concentrations
Rural
Communities
Young Adults
20-35 y/o
Teens
15-19 y/o
Spare Time:
Entertainment and
fun
Different meanings of what spare time and digital mean depending on the age and the location:
Digital:
Pragmatic and solution
Spare time:
“The remaining time”
Spare time:
At the end of the
workday
Spare Time:
Routine and Social
Digital:
Modernity
Digital:
Need
Digital:
Everydayness

14
Perceptions
1. In urban areas, digital is seen as a door to consumption and that erases social class
2. In rural zones digital is seen as aspirational
3. Teens: Between exploration and boundaries
4. Young Adults: Digital as a tool
Habits
1. The digital experience is centered in micro moments.
2. The type of connection determines the use and consumption on the internet.
3. Payment alternatives that don’t require bancarization
4. Social Media: Uses and platforms and generational differences
Hardware
1. Smartphone: multi-category killer
2. Purchase of devices: Smart purchase above idealization of brands
3. Wifi connection: More accessible everyday
Services
1. Media consume: Personalized and multiplatform
2. E-commerce is relevant, but only as a second option
3. Exploration and digital purchase (Traveling, Ticketing, Digital Services)
Main Insights

15
In urban areas, digital is a door to
consumption that helps to erase
social class differences
“
The urban spaces allow a more common interaction between social
classes, creating shared environments of socialization. In this context the
digital world has become into one of the main spaces that allows to erase
the limits between social classes, opening possibilities of knowledge,
information, and common consumption. All this thanks to the presence of
a new actor: The Smartphone.
Purchase Power
In urban zones, the differences between BoP and other
socioeconomic classes does not rely on the knowledge about the
offer, neither the preference or ideas of consume in general but to the
differences on the possibility of purchase.
The objective between the BoP and other social
classes is the same, but the final consumption is
different and when it’s achieved is through an
extra effort (through savings or management) to
access the product and digital services.
I’ve seen some hotel and plane prices to go
somewhere with my girlfriend at the
weekend...but in the last minute we couldn't do
it.” Teens, Del. Cuauhtémoc
● In terms of communication is preferable that the BoP
messages use the same language and codes used for middle
class, since they also know the offer and share the interest.
IMPLICATIONS TO THE BRANDS

16
In Rural Zones, digital is seen
as aspirational
“
Even with an increasing expansion of the use of technology, it results
complex and not completely natural the access to technology and
internet in rural areas.
Despite the limitations and obstacles to access, people really want to
find ways to connect to Internet, since it evokes modernity and a
connection with the urban world. They hope step by step with public
and private help the technological differences between urban and rural
spaces will be eliminated.
Location
Inside a wide specter of situations, the closeness and contact with
urban spaces is what determines the knowledge and digital culture.
Turning digital in the most aspirational element
among the young rural people.
It’s difficult to connect here. TELMEX does not
come here, I don’t know what they are waiting for,
nowadays Internet is a daily stuff.”
Young adults, State of Mexico
● In terms of communications, digital can be associated with
urban contexts and synonym of modernity (need of the rural
spaces to feel “connected”)
● Programs that boost the access as an opportunity develop
attachment.
IMPLICATIONS FOR THE BRANDS

17
Teens: Between exploration
and self control
“
Even though that in reality they show an intense and natural use of
technology and digital media, the teens of urban zones tend to
describe technology through a speech learned from earlier
generations that idealize and exalt the habits and values of an
analogic past (more “natural/social”...) and that demonize in certain
way technology (generates dependency, creates isolation...)
Exploration
However, for them is completely normal to explore and know
everything that seems interesting.
Perception of limits: In their speech they manifestate a need of
self control regarding certain contents (not appropriate for their
age) and to avoid an excessive dependency (“addiction”) to
devices, chats, video games.
In the practice, they are the most active users,
they are used to change and the constant
exploration is seen as something routinary and
natural.
● Emphasize the communication connecting the offline and online life
trying not to show kids and teens addicted to the digital world and
showing some kind of balance.
● The thing they valorate the most is what is presented as something new,
different and that links their daily life to the digital world.
● A higher sensibility to new products and services than the young adults.
It depends on the way you see it: videogames
make us practice less sports but now I can play
football while a listen to some music with my
cellphone”Teens, C. Nezahualcóyotl
“
I think Internet is dangerous because we can see
things that are not for our age.”
Teens, C. Nezahualcóyotl

18
Young Adults: Digital centered
on a functional level
“
Network is seen as a catalogue of available
contents, where they find what they are looking
for or they need (without characterizing by the
explorative attitude proper of the teens).
.
The urban young adults make emphasis on the advantage of
availability and immediacy of access to contents and tools of their
interest and their functionality, seeing digital with an utilitarian
perspective. As they already have their interests and habits rooted,
the young adults usually evaluate positively the possibilities that
digital offers them to find, consume and know contents already
adapted to their interests.
Availability
For the young adults the possibility of finding the contents of
their interest is their main motivation to use digital media.
Nowadays you can find whatever you want without
leaving home: books, movies...in the old days you
had to leave home look for it and then pay it.”
Young Adults, Del. Cuauhtémoc
● The opportunity is, depending on the role of each brand, on:
○ New players: encourage exploration
○ Players off: capitalizes the relationship already built.
“
The change has been radical. Nowadays you can
do and find whatever you want on Internet”
IMPLICATION FOR THE BRANDS

19
The digital experience is
centered on micro-moments
“
The digital experience of leisure and consume on the BoP is
determined by moments and micro-moments of use (mostly
supported by the use of the Smartphone). Those spaces free of
labor or academic occupations that allow them to get close to
digital consume (sending a SMS, taking a photograph, check the
hour, read a message on social media…) Any real life situation can
start a micro-moment.
Turning those moments in the best contact point
for the digital audiences.
The moments
The spare time between activities are the moments of the
most intense activity on digital media.
● The challenge for the brands is to identify those moments where
their product/ service seems to give answer to the needs during
different contexts.
● The succession of micro-moments emphasizes the importance
of being able to start processes in one device and continue them
in other.
I always connect when I'm at the subway or in
my spare time at job”
Young Adults, C. Nezahualcóyotl

20
The type of connection
determines the use and
consumption on the internet
“
The management of micro-moments is also affected for the
availability of connection: Both, young adults and teens structure
their consume according to the possibility to connect through
Wifi or not.
A conscious search of saving
Dividing the forms, use and consume of content according to
their kind of connections. Limited to communication issues
when using a mobile data connection (whatsapp, e-mail,
messenger…), while the more data demanding activities are
postponed to the moment when there is an available Wifi
connection.
A conscious planification of the micro-
moments according to the place and type
of connection → Ex. Wait to have wifi
connection to make planned downloads
● With this in mind, is common that at the moment of hiring a phone
contract they already pay more interest on the mobile data plan
rather than the rests of services (Calls, SMS’), having preference
for the “plans” that include more MB’s and more discounts through
activations.
● The subjective perception of “low data consumption” will affect
the perspective and will help the likeness of the proposals made to
the consumers.
With this new promotion of unlimited social
media I always have mobile data on as it’s
free”
Teens, Del. Iztapalapa
What people is now looking for are
mobile data plans, this is the only
thing they check now”
Phone vendor, Del. Iztapalapa
“

21
The “ROPO effect” (Research Online Purchase Offline) is extended and
the purchase step is not very frequent. Not having a debit or credit card
is not a real obstacle for the segment, as they know other alternatives
that allow them to overcome the risk and the insecurity feeling.
Payment alternatives that
don’t require bancarization
The Credit Card is not a problem. You can go to
7eleven and you can find credit for the PlayStore.”
Teens, C. Nezahualcoyotl
● Enlarge the spectrum of prepaid options and guarantee the
possibility of refund, use of activations that increase the trustability
and interaction with the vendor as classified advertisements
websites have done it.
● This, in order to overcome the two main obstacles for the digital
payment: Fear and risk for fraud and no bancarization
“
Exploration and query
of used products and
upon delivery payment.
Alternatives that allow
digital payments
without the necessity
of a credit card
(prepaid cards)
It’s safer in MercadoLibre as you
get your product the moment you
pay for it”
Young Adult, Del. Cuauhtémoc
“

22
While Facebook keeps a high relevance in all the segments, the
differences in terms of uses are clear when referring to age ranges.
While the young adults keep a use that focus on the socialization and
contact between their social circles, the teens prefer to use it as a
channel to share contents from other sources (Videos, Images, News...).
Social Media: Usage and
platforms according to age
I use facebook just to see some funny stuff that my
friends shared, but I prefer to use WhatsApp to chat
and keep contact with them.
Teens, Del. Iztapalapa“
For teens, Facebook is seen as a place to
share and they prefer to look for other
alternatives to communicate:
Alternatives:
-WhatsApp-
-Instagram
-Snapchat
-Periscope
● The presence of brands on social media platforms have to consider
this phenomena considering the hypes of the moment and the
spaces that lose relevance.
● When talking to younger generations, brands should think about the
several kinds of uses that this profile gives to social media before
starting any communication strategy.

The multifunctionality and omnipresence of the Smartphones have made
this device to represent the main role on the digital consumption. It’s the
window to the digital world. In the base of the pyramid it’s common to be
considered the only one that is necessary and essential present at home.
Smartphone:
Multi-category killer
Defines the Micro-moments of digital
use and consume
Subscription to new and specific
digital services
The type of connection place limits to
each experience.
Acquired for different drivers
according to the age
Allows an integral audiovisual
consumption of contents and
formats.
Allows new possibilities of E-
commerce and payment
methods

24
Smartphone:
Multi-category killer
“
Inside the ecosystem of devices, the Smartphone is the main one,
from a functional perspective (full of possibilities) to a emotional
level (full of meanings). It has become the main device that
stretches the relation of this segment to the digital consumption.
Desktop computers, Tablets and Smart TV’s are useful but not
essential.
Practicality and economy
The unique device that covers all the needs of a
common use of the daily life.
Acquiring other devices depending the needs/
possibilities. (Ej. Education, work, ‘whim’)
We have wifi at home, but we don’t have a
computer, for the things we use it for, the
Smartphone is more than enough”
Adultos jóvenes, Iztapalapa
● The model for the relation with the consumer has to be
conceptualized having always in mind the modalities of
interaction with Smartphones.
● The Smartphone creates multiple possibilities of contact with the
audience/ consumer.
● Adapted contents and mobile version in terms of the screen size
and the time required to the consumer.

25
Device purchase: Smart
purchase before a brand
idealization.
The purchase of a smartphone is an important investment inside the
Base of the pyramid, it determines, in a big way, the quality of life if
we consider the role that has on the daily life of the segment. Having
this in mind, it becomes in a purchase guided according to rational
aspects and far from what we called “brandism”.
Willing to pay
They usually develop a detailed selection process, getting
informed about the characteristics and the cost-benefit ratio
before being seduced by desire or trends.
Strategies: They look for their own formulas to be able
to get the device of their interest.
Teens: Preference for second hand devices. This allows
them to aim for more expensive devices, with flexible
payments in a familiar relationship (friends, family..)
Young Adults: They appreciated the security and
confidence that brings the purchase of a new product in
an official and recognized store → warranty,
orientation,
● This point of view leads to preferences for brands towards
consolidated manufacturers (LG, Samsung, Sony, etc.), as its
positioning in the market plus the value of the Android system, are
associated with ideas of “freedom”', “openness” and compatibility.
● In his selection smart choice process is important:
○ Make emphasis about the technical information and
intrinsic characteristics of the product.
○ The potential of acceptance of new brand
○ The relevance of the second hand markets.

26
WiFi Connection: More
Accessible Everyday
“
Both, in rural and urban zones, nowadays it is getting easier to connect to
wireless networks in public spaces (parks, libraries, malls…) allowing the
usage extension of Smartphones and the micro-moments of free
connection.
Public and private initiatives
Coming from any player, connecting through WiFi out of home is
easier everyday in rural and urban spaces.
It’s what determines the moments of
connection and the usage/consumption
of what is done through them.
● The connectivity is a main factor that configures the usage of
technology in public spaces, becoming an important traffic
attractor
● It brings new possibilities for the brands:
○ Advertising
○ Consumer knowledge
○ Sponsorships
We come here all afternoons since is the
only place of the town where we can
connect.”
Teens, State of Mexico

27
Audiovisual consumption:
Personalized and multiplatform
“
On both segments is possible to observe a
consolidated model to consume contents:
Personalized and multi platform. Online content
that is perceived from the one of the TV, and that
even assessed positively the advertising content
considering it as more addressed and aimed for the
target.
The audiovisual consumption is another of the aspects that is
differentiated between adults and teens, consequence of the
incorporation of the second ones to new practices of consume that look
for a here and now dynamic, every day becoming more and more
detached to the TV schedules. While the first ones have lived the moment
of transition of the TV broadcast (linked to the TV schedules)
Young Adults: They highly appreciate the availability of contents,
possible because of the digital access (On demand access to the
desired contents)
Teens: Even though they also appreciated the availability of contents,
they live in a constant exploration and discovery of new contents.
At home the TV is only watched by my mother
and my granny, I really prefer to watch my
programs in Youtube”
● The perspective that has to adopt the industry is to accept that
also in the BoP the trends of consume aim to the fragmentations
of audiences.
● From now on, it’s important to think on multi platform interfaces
that allow the personal consume and that can be adapted to any
kind of device.

28
E-commerce is relevant, but
only as a second option
“
Their needs of consumption are already covered through traditional
channels and they don’t see any additional value or clear drivers
behind the e-commerce. They don’t see it as a need. The online
purchase for this target is an option related to the subscription of
services and the acquisition of products difficult to find in their
close context.
Concrete searches
The online purchase is determined by the availability
(when they can’t find any product on the traditional stores)
and not as a call to action after the exploration.
E-commerce reduced to service subscription
(that can only be obtained through online
methods), where they actually see the
applicability.
Teens: Even when they are not banked they know
other accessible payment methods.
● Implement new mixed models (online-offline) that allow the BoP
to board the e-commerce train and break down barriers
● Alternatives payment methods with physical attachment that
allows to break down the fear barriers to e-commerce.They already sell PlayStore credit at 7eleven,
you can do everything with this and nothing
more”
I have only bought some boots, but
just because I really liked them and
I couldn’t find them anywhere else.”
Adultos jóvenes, Del. Cuauhtémoc
“

29
Digital services: The required
category
“
Although is a completely digital product, this is the closest, best
assessed and most consumed category within the BoP, since these
services are the ones that break the media paradigm and open an
enormous options in terms of content with a price that match their
possibilities.
Payment methods
The prepaid cards that take out the barrier of the
bancarization are considered to be the best option
to acquire these services.
Other well perceived characteristic about this services is the clear
improvement in the quality of the content compared to the free one
found in other digital media.
Netflix and Spotify are worth it as are pretty cheap,
they give you a lot of stuff, and you can buy them
without a credit card.”
Teens, C. Nezahualcoyotl
● Develop models of consume with 100% digital relationship
that are accessible to unbanked population.

30
Traveling: Exploring it but not
buying it
“
The travel sector can be considered as the most aspirational of all as
it awakens a lot of interest that incites the exploration, but in this
segment it’s difficult to generate a purchase as the prices are above
their possibilities.
Informative
The main activity related to this category is informative and
explanatory, to know the possibilities, prices and if they can
someday be affordable for them.
Teens: More interest because of their explorer
genetics. They know and explore even when it’s not
affordable for them.
Young Adults: They know the offer but they don’t
have a lot of interest → They don’t usually explore
as their leisure time is more attached to habits and
customs. ● Always within a limited range of expenses, the universe of Travel
is present within the aspirations of young adults of the BoP.
● Holiday offers with limited expenses, supported with sales, can
boost the purchase process of the category.Sometimes I browse some websites to see if I find
some offer but I haven’t found anything, is not as easy
as it seems and when I have vacations I almost always
visit my mother's town”
Young Adults, Del. Cuauhtémoc

31
Ticketing: “Too much risk for
so little benefit”
“
They keep moving under an analogical mindset when buying tickets
(shows, movies, concerts). And so on the Ticketing category is not
perceived as an option that adds value to the service, because of all
the possible risks and complications that implies doing it online.
What if it doesn’t arrive?
On a general level there is a fear of not receiving or
losing the ticket, keeping the preference of a
physical purchase.
Early booking services and the access to information
about the availability of the required service are the
added values appreciated by the segment.
● Communication strategies through promotions or other added
benefits, could make consumers closer to this category to take
the risk and see the real benefit.
I guess it’s useful and easy, but I simply
don’t use it.”

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Enero 2016

Digital Consumption of Teens and Young Adults in Mexico

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