Rabbit and Their Business Model to Preserve Corner Stores
Corner stores are the backbone of the Mexican economy; they shape local communities and foster relationships between neighbors. Sadly, 70 percent of corner store shopkeepers are worried about the future of their business. This is due to the opening of large retail grocery stores that local corner stores cannot compete with. The Mexican Association of Market Intelligence and Opinion estimates that 10 corner stores close every time a commercial grocery store is opened in a neighborhood.
There are over one million corner stores throughout Mexico. The owners of these stores represent members of the community. They usually live in the community where their stores operate. More importantly, their entire livelihood depends on their corner store. With more large commercial grocery stores opening throughout Mexico, many local corner store owners are being put out of business. They do not have the resources or capacity to compete with these large commercial stores.
Besides commercial grocery stores, self service stores are also threatening the vitality of corner stores. Self service stores are stores that people can buy supplies from or charge devices, and their popularity has led many people to prefer them. La Silla Rota reported, “There are more than 17,000 small self-service stores in Mexico and many people go to these establishments to pay for services, cell phone recharges, and purchase other supplies.”
“This segment of small businesses has been threatened, and in many cases, are in clear risk of disappearance, due to the lack of support and a decrease in sales, derived from the effects of the health emergency and the growth of large retail chains.” –Pedro Fernández (General Director MULTIPAV)
The Covid-19 pandemic negatively impacted corner stores throughout Mexico. When the pandemic began, they closed down. When they reopened, they found themselves competing with the e-commerce market. Quarantine kept shoppers at home. To get necessities, shoppers who used to frequent corner stores resorted to ordering groceries and necessities online and continued to do this once corner stores reopened.
As technology spread and reemerged as vital to communication and to meet all needs through the pandemic, online grocery stores and services have grown in popularity. As a result, e-shopping has led to the closure of many corner stores who have lost segments of their customer base and experienced a drop in sales.
Small corner stores do not have the technology or variety of products to stay competitive with self service shops and commercial grocery stores. The future of their business and livelihood will depend on their ability to evolve and adapt to new ways of operating their business.
Corner stores are the backbone of many communities in Mexico, and as more corner stores close, communities are also negatively affected. Communities lose a common place where neighbors shop at and interact with one another. Also there is a convenience of shopping at the other types of stores, choosing those over corner stores is leading to a detrimental effect on communities.
“In Mexico the main means of supply comes from the “corner stores,” which support more than three million families, consolidating more than 42% of the massive consumption of the country that represents 1% of the national GDP with more than 15 billion dollars in annual purchases.” –National Alliance of Small Merchants (ANPEC)
Saving Corner Stores: The Startup Rabbit
Coming to the rescue of corner stores throughout Mexico is Rabbit. This startup business was created 23 weeks ago, but they are already servicing 205,000 corner stores throughout Mexico. Rabbit was created to aid small corner stores in the development of their businesses. They bring new products to the corner stores, and send a representative once a week to meet with owners to help them evolve their business.
The founder of Rabbit is Andrés Collazos Palacios who has over 20 years of experience in the mass consumption sector. He understands consumer trends, and what products need to be in corner stores to help them stay competitive with large commercial grocery stores. As Rabbit brings in new products to corner stores, it allows for a wider variety of products attracting new customers.
“In Mexico, where one jumps, everyone jumps! Mexicans have always distinguished ourselves by being hardworking, brave and passionate people in everything we do. These values can be found in each of the corner stores, where every day the shopkeepers get up to give their best.” –Andrés Collazos Palacios (CEO and Founder of Rabbit)
Rabbit values the importance of corner stores in community development and preserving Mexican values. They have a catalog of items that store owners can select from. This creates simplicity in creating a wide variety of products. Once the corner store selects which products they want, Rabbit sends them the products from one of their manufacturing facilities at no extra cost.
They value the role corner stores play in communities, so Rabbit works to “inspire the development and innovation of our Business Model, always thinking of the best solutions that make the leap to stores in Mexico & Latin America, placing the grocer and their community as the central axis of Rabbit.
To help corner stores stay competitive as technology grows and evolves, Rabbit uses their representatives to help with the development of store processes. By meeting with store owners they can inform them of market trends and new technology. They also work with them to implement modern practices into their business. Doing this ensures the vitality and longevity of corner stores allowing them to service their communities for many years to come.
Rabbit is a new startup business, so it is difficult to estimate their impact and success as a company so far. However, Rabbit believes “we will be the # 1 allied platform for shopkeepers in Mexico, through a broad portfolio of logistics, financial and technological solutions that modernize the way the stores with which we grew up operate.”
Although technological growth and modernization is positive for society, we sometimes forget the negative effects technology has on local communities. Rabbit recognized these negative effects and used it as inspiration for creating their business. Hopefully, Rabbit corner stores can continue to service their communities for many years to come preserving Mexican culture and local communities. To learn more about Rabbit check out their website at www.rabbitmx.com.
Michael Davis is a current undergraduate student at Tulane University studying Finance and International Relations through the Altman program in International Studies and Business. His interest in Latin America began when he took his first Spanish class in 6th grade. Since then, Michael has traveled throughout Latin America learning about entrepreneurship, policy, and globalization. He is interested in sharing the stories of young entrepreneurs who work to expand development within Latin America. He believes their stories can inspire others and reshape the narratives of Latin America. In Latina Republic, he is excited to highlight these voices in his stories to deepen his own understanding of Latin America as well as his readers. He looks forward to inspiring innovation with his stories through Latina Republic!