To begin, can you tell us about the business model that you use and how you are revolutionizing the retail industry with your services?
We believe that we are truly making a change in the retail sector. We are changing the traditional way of making telephone sales in Mexico, and with financial support and technology we now approve credits of between MXN5,000-8,000 in 15 minutes. A part of our business model is to extend credits and provide technology to those who have been denied it due to their financial situation, geographical location or a general lack of access to such products. Credit cards are decreasing in volume and banks are approving credits. This is our main business model and allows us to reach areas of 10,000 habitants and give these people the opportunity to purchase a smartphone. This way they can access digital platforms like Google and others, while students use them for online classes, which have been essential during the pandemic. Many companies unable to purchase laptops during the pandemic were nonetheless able to purchase smartphones, which benefited the work from home situation. This is how we helping people through the financing of smartphones.
How can you assure clients make their payments and that the company will remain profitable with such few requirements?
There are different mechanisms. We have a strong team that follows and manages the loans and we have the technology that manages different credit types such as a credit bureau. We also have access to the blacklist. With this combination of over 400 variables, we can analyze models and predict whether the telephone will be paid for or not. We complement this with technology and we have developed an operative lock system on the phones so if a phone is not being paid for it becomes blocked; this in addition to supporting the client to follow up on pending payments. This tool is helpful to mitigate risk factors. During the pandemic, it was put to the test and it went well. A smartphone is needed for everyday activities so the combination of the necessity of the technology and the accessibility we give is a key factor.
What plans does the company have to raise capital in the public market?
The idea is to issue long-short term debts. We have been working with BIVA for a year now and hope in the next semester to be able to issue debt. We are happy with the collaboration and have worked on many programs to build trust among stockholders, our clients, workers and the investment market. Currently, our funds are private through national investment banks, and we have our own capital. We are undergoing expansion and ended 2020 with 120 stores and we started 2021 with 300 stores. As of today, we have more than 400 stores and we plan to end the year with 600. Our expansion plan is to reach 2,000 stores by 2025 and this is part of our strategy in regards to the future, as is the issuance of debt in stocks and the creating of a greater presence because these projects require considerable investment. Ours is a business of high growth potential and we could even replicate the model in other parts of Latin America or beyond.
What steps is the company taking to achieve a store count of 2,000 in Mexico?
There is a whole structure supporting us into which many years of work have gone. We have many talents from different companies that staff branches in key locations. We have a lot of experience now in opening each branch and we well prepared to do so in terms of technology. Meanwhile, our Business Intelligence department with over 30 mathematicians oversees the metrics applied to each store, be they geographic or other variables. We also have an expansion department and are able to build a store of around 50 to 60sqm in 30 days. Being fast builds of low cost means that we can open a store every 18 hours.
The company is not new, having begun operations around 21 years ago. What has recently helped it to achieve such rapid growth over the past three years?
The company began as a retail firm and we were involved in the financial product. We have merged these two concepts. I should add that over the next six to eight months the objective is to enhance client experience. Our strategy is based on expansion with all of our workers and further employment. We aim to be a company that people want to work for and are happy in. Many startups in Mexico are very good, but lack the necessary technology. We can give them access to these resources.