amway mexicocity market study0608

7/30/2019 Amway MexicoCity Market Study0608

1/79

Mexico City, MexicoMARKET STUDY


2/79

Table of Contents

1.0 Project Background ...............................................................................................................................

2.0 Project Objectives ..................................................................................................................................

3.0 Mexico City, Mexico ............................................................................................................................

3.1 General Market Overview ..................................................................................................3.2 Mexico City Economic Structure.........................................................................................3.3 Population Composition ...................................................................................................

3.4 Mexico City: Delineation of Geography .............................................................................3.5 Geo-Demographic Market Segmentation ...........................................................................3.6 Socio Economic Levels......................................................................................................3.7 Mexico City Retail Inventory ...............................................................................................3.8 Mexico City Transportation System ...................................................................................

4.0 Amway Store Distribution Optimization .................................................................................................

4.1 Market Zones/Trade Area Delineation .................................................................................

4.2 Geo-Demographic Summary by Market Zones/Trade Area ................................................

5.0 Mexico City Zone Market Studies ..........................................................................................................

5.1 Mexico City Neighborhood Characteristics...........................................................................5.2 Mexico City Neighborhoods ...............................................................................................

6.0 Amway Expansion Program Summary ................................................................................................

6.1 Geo-Demographic Snap-Shot .......................................................................................... 6.2 Zone and Trade Areas ........................................................................................................7.0 Amway Site Specic Survey ..................................................................................................................

8.0 NAI Global Network .............................................................................................................................

8.1 Mexico City, Mexico Market Survey ................................................................................... 8.2 NAI Mexico City, Mexico Ofce Prole ............................................................................. 8.3 Global Contact Information ...............................................................................................

9.0 Catchment Areas .................................................................................................................................

9.1 City of Mexico Catchment Areas ..................................................................................... 9.2 Hot Spot Catchment Areas ............................................................................................... 9.3 Zones: Catchment Areas ..................................................................................................

9.4 Rank of Catchment Zones by Population............................................................................ 9.3.1 North Catchments ...............................................................................................

9.3.2 Centro Catchments ............................................................................................

9.3.3 West Catchments ................................................................................................9.3.4 East Catchments ................................................................................................

9.3.5 South Catchments ...............................................................................................9.5 TopTarget Catchments ....................................................................................................9.6 Catchment Survey ............................................................................................................9.7 Catchment Clusters ..........................................................................................................9.7 Subway Overlay ...............................................................................................................

10.0 Conclusions and Recommendations ...................................................................................................

Appendix A: Site Survey .............................................................................................................................Appendix B: Supporting Geo-Demographic Maps ......................................................................................


3/79

1.0 Project Background

n February 2008 management teams at NAI Global and Amway discussed Amways international expansion

bjectives into Latin and South America. NAI Global Market Analytics outlined the scope of services and global

market analytic capabilities. In short, NAI proposed two unique programs which could be developed for apecic city.

. Market Light

. Market Analytics

Amway is interested in a store expansion program into Mexico and challenged NAI to identify proled sites that

could evaluate to support the launch for Mexican storefronts. Amway management requested further supporthrough two NAI services in Mexico:

. Comprehensive market analysis and analytics to establish optimal trade areas.

. Site Selection for the most optimal sites in each submarket.

Amway instructed NAI to provide a Market Analytics program for Mexico City, Mexico. NAIs assignment is to:

. Complete the market assessment.

. Identify major submarkets.

. Recommend particular submarkets which meet the targeted geo-segment(s).

. Analyze and present optimal sites meeting Amways selection criteria in each submarket.

. Include individual assessments of each site for project team review.

NAI and Amway will review the format of the analysis and modify if required for the next phase of the project.

The results and conclusions are included in this document.


4/79

.0 Project Objectives

The principal objective is to determine how to analyze current opportunities for Amway in Mexico and theoptimal entry strategy into the Mexican marketplace. This is a multifaceted initiative that may consider severoperational component services across a broad platform from market investigation through site selection ancontrol of sites supporting a master market strategy.

The primary purpose was to undertake a complete market assessment of the Mexico City market anddemonstrate the capabilities of NAI in the Mexican marketplace.

NAI is not your typical provider of real estate services. Our philosophy is to bring forward to Amway amethodology from market understanding through site selection and securing the optimal store location(s). Oprocess is deliberate. NAI does not provide simple sites from which the client weighs the pros and cons befmaking an investment decision.

Our objective is to demonstrate to Amway our seamless approach to working in Mexico and to develop witthem a comprehensive expansion program for the country that is practical, efcient and risk free.

The following paper is NAIs strategy paper for entry by Amway into Mexico City, Mexico.


5/79

3.0 Mexico City, Mexico

3.1 Market Overview Mexico City, Mexico

Mexico City forms the core of the Federal Districtnd is the commercial, industrial, nancial, political

nd cultural center of the nation. Among its diversend important manufactures are chemicals, petro-

eum, food products, textiles, automobiles, ma-hinery, pharmaceuticals and consumer items. The

population has increased rapidly in a city that hadlready spread out into many residential sectionsalled colonias. Iztapalapa and Gustavo A. Maderore the largest suburbs of the Federal District;

Coyoacn is the oldest, with a palace built by Cor-s. The metropolitan area of Mexico City is currently

he largest in the world, but it suffers from severevercrowding. There are many run-down neighbor-oods without essential services and largereas inhabited by squatters. it is estimated thatlose to one third of the citys residents are without

ewage facilities. Mexico City, also called Zona Met-opolitana de la Ciudad de Mxico (ZMCM), lies inhigh altitude basin almost completely surrounded

by hills and mountains (including dormant/activeolcanoes) with an opening to the north.

Greater Mexico City incorporates some 58 adjacent municipali-es of Mexico State and 1 municipality of the state of Hidalgo. In

006, Greater Mexico City had a population of 19. million, mak-ng it the largest metropolitan area in the western hemisphere andhe second largest city in the world.

Paseo de la Reforma, the citys main thoroughfare

as been referred to as the Manhattan of Latin

America. This elegant boulevard is lined withozens of magnicent monuments including the

much-photographed Independence Monument,which has become the unofcial trademark of

Mexico City. Sharing space along Paseo de laReforma are modern high-rise ofce buildings,

mbassies, luxury hotels, colonial mansions,

arious monuments and shaded pedestrianpromenades.

The neighborhoods, or colonias, of CentroHistrico, Zona Rosa, Polanco, Roma, Condesand Lomas de Chapultepec are all fairly closeach other and also to Paseo de la Reforma.

These are the principal areas in the central part ofhe city most popular with tourists. In the south-rn part of the city are the suburbs of San Angelnd Coyoacan along with the Floating Gardens of

Xochimilco.

During 2001, Mexicos total population base exceeded 100 m

lion, of which at least two-thirds are considered to be urban bvirtue of inhabiting communities with more than 15,000 reside(see map below). 33 million Mexicans now live in cities with ov1 million inhabitants, another 1 million live in medium size citbetween 100,000 and 1 million, while a further 15 million live smaller towns and cities. Clearly, the concentration of populatcan be found in the central portion of the country, with MexicCity the focal node of population density.


6/79


3.2 Mexico City EconomicStructure

Current economic activities have not pre-ented an increase in unemployment andhe activity distribution has also changed.

Economic activities are classied as: (A)

Agriculture and cattle rearing, (B) Com-merce, (C) Communications and trans-portation, (D) Construction, (F) Mining, (G)Government, (H) Not specied, (I) Petro-eum and gas extraction, (J) Services andK) Manufacturing industry. Services andmanufacturing have become major activi-es since 1990.

nside the Metropolitan Area (Federal

District and State of Mexico), generalconomic trends are similar with around

70% percent of the population of the Fed-eral District involved in third class activity(services), 0% on secondary activities(manufacturing industry) and almost none

on the primary (extraction industry). In theState of Mexico the percentages are 50%,30% and 10%, respectively.

Mexico has a free market economy in thetrillion dollar class. It contains a mixtureof modern and outmoded industry andagriculture, increasingly dominated bythe private sector. Recent administrationshave expanded competition in seaports,railroads, telecommunications, electric-ity generation, natural gas distributionand airports. Per capita income is one-

fourth that of the U.S.; income distributionremains highly unequal. Trade with theU.S. and Canada has tripled since theimplementation of NAFTA in 1994. Mexicohas 1 free trade agreements with over 40countries including Guatemala, Honduras,El Salvador, the European Free Trade Areaand Japan, putting more than 90% oftrade under free trade agreements.

In 2007, during his rst year in ofce,

Felipe Calderon was able to garnersupport from the opposition to success-fully pass a pension and scal reform. Theadministration continues to face manyeconomic challenges including the needto upgrade infrastructure, modernize laborlaws and allow private investment in theenergy sector.

Real growth rate:3% (007 est.) Economic priorities arereducing poverty and creating jobs.

GDP - per capita (PPP):$1,500 (007 est.)

Labor force - by occupation:Agriculture: 18%Industry: 4%Services: 58% (003)

Unemployment rate:3.7% plus underemployment of perhap5% (007 est.)

Population below poverty line13.8% using food-based denition of

poverty; asset based poverty amountemore than 40% (006)

Household income or consumtion by percentage share:Lowest 10%: 1.%Highest 10%: 37% (006)

Real estate in Mexico City is somewhadifferent than what the average personmight expect in a city of this size. Therare many upscale neighborhoods whicoffer beautiful homes and condos, somwith gated entry. The problem is nd-

ing affordable middle class housing in desirable neighborhood. As much of threal estate activity in Mexico City is duerelocation by large corporations, muchthe local housing tends to be subsidizeor even provided by the employer.

The suburbs surrounding the downtowarea offer some relief from the fast pacof the city. There are many nice upper upper middle class developments andneighborhoods in the southern sectionthe city which offer a very comfortable

style as well as a good value for a potebuyer. Real estate prices in Mexico Citare generally higher than those in otheMexican cities and equal to, or higherthan, many of the beach resort areas oMexico.


7/79


Number of Inhabitants per Size of Locality

3.3 Population Composition

The distribution of inhabitants within urban areas is not wellbalanced in the Federal District, as most of the population isoncentrated in a small number of localities. 1.% of the totalumber of urban zones is home to 6.87% of the population; a

urther 1.8% of the urban areas have 34.91% of total inhabitants;nd the rest are localities with less than 50,000 inhabitants. It is

mportant to point out that 80.17% of Federal District localitiesave less than 100 inhabitants which represents 0.11% of total

population.

3.4 Geographic Delineation

There are some 33 submarkets which comprise the GreaterMexico City marketplace. The following map illustrates the 16

istricts and the 17 counties which ring the Federal District. Thentire State of Mexico is comprised of some ,300 colonias oreighborhoods.Each Colonia/neighborhood market has beenaptured with the following information:

A) Socio-Economic StrataB) Total Population

C) Total IncomeD) Age Distribution (4 levels)

Appendix B shows the tables of the above data for each Colonia,300 individual catchment zones).


8/79


3.5 Mexico City: Delineation of Geography

Taking a more concentrated view of the city, the map below shows the core 16 districts which will be evaluated in greater detail inmarket studies section. Within each of the 16 districts, a number of colonias or catchment zones are created in order to further re

he site selection process.

3.6 Geo-Demographic Market Segmentation

The table on the following page indicates the ve socio-econo

levels that are commonly used throughout South America toclassify the resident population. In addition, photo snap shotsalso shown to illustrate the relative housing differences betweeeach level.

Country Socio-Economic Level Categories

Argentina A, B, C1, C, C3, D, E

Brazil A, B, C, D, E

Chile A, B, C1, C, C3, D

Colombia 6 (Alto Alto), 5 (Alto), 4 (Medio Alto), 3 (MedioBajo), (Bajo Alto), 1 (Bajo)

Costa Rica Alto, Medio, Bajo

Ecuador Alto, Medio, Bajo

Guatamala Alto, Medio, Bajo

Mexico A, B, C+, C, D+, D, E

Panama Alto, Medio, Bajo

Paraguay Alto, Medio, Bajo

Peru A, B, C, D, E

Uruguay A, B, C1, C, C3, D1, D, DE

Venezuela A, B, C, D, E


9/79


Level A Level B Level C Level D Level E

Family

Description

Households headed bybusinessmen, or principalsin companies

Families at this level for 3 ormore generations

Households headed byProfessionals

Middle income Laborers Occasional laborer

Urban/ Housing

Description

Large mansions or luxuryresidents

Large houses

Higher end condos

Medium sized house/condo

Small house/condo Housing smalland poor

Living/ConsumerHabits

High end furnishingsLate model luxury car

Own a beach home

Kids in private school

Costly furnishings

New model cars

Medium cost furnishingwith variety of electricalappliances

Own two cars around 4yrs old

Few electrical appliances

One car 10 yrs old

Few furnishings buown radio and TV

Primary govt

education

Entire family will wo

Family

Income

Over 60 times min. salary$4,000 pesos

Between 30 times and 59times min. salary $10,000and $4,000 pesos

Between 10 times and 9times min. saary $3,000and $9,000 pesos

Between 10 times and 9times min. salary $1,500 and$3,000 pesos

Less than $1,500pesos

Socio-Economic Level A

n Multi-millionaires with inherited wealth.n Own rent producing properties.n Living in extreme luxury.n Residences located in exclusive residential neighborhoods.

Socio-Economic Level B

n Multi-millionaires.n Own rent producing properties.n Live in comfortable luxury.n Residences located in exclusive residential neighborhoods.

Socio-Economic Level C1

n Living like the rich, but not really so.n Earn high salary at work.n High-level executives or professionals at large rms.

n Living in as much luxury as salary allows.n Same habits as Levels A and B for mass consumption.

n Different from Levels A and B in that they will be affected if they have to quit work.

n Members of rst-class clubs and organizations. Children enrolled in rst-class schools.

n Own or rent residences in residential zones.


10/790



n Living in comfortable style.

n Earning middle salary at work.n Professionals, executives or employees of mid-sized businesses.n Enjoy some of the nice things of life.n Able to easily meet their primary needs.n Live in detached houses or modern buildings in middle-housing areas.


n Social positions depend on economic situation.n Able to enjoy some conveniences but at the cost of economic sacrice.

n Able to meet their primary needs.n Employees of small business or informal company.n Lower or middle income.

n Large family sizes.n Live in heavily populated areas.n Live in apartment buildings or small detached houses.

Socio-Economic Level D

n Almost no convenience goods.n Barely able to meet primary needs.n Low-level workers at small companies.n Generally large family sizes.n Living in heavily populated areas or informal housing.

Socio-Economic Level E

n Unable to afford any products or services.n Almost unable to meet their primary needs.n No steady work.n Generally large family sizes.n Living in makeshift housing in marginal zones

The bar chart to the left displays the socio-economic compotion of Mexico. Levels 1, 2 and 3 represent the more afuent

upper scale residents across the county while groups 4 throu7 illustrate the emerging middle class. Groups 8 through 10represent the low income population.

The stabilization of the banking sector has evolved to the stawhereby banks are now offering credit to consumers topurchase cars, lines of credit and mortgages. As a result, thesocial composition of Mexico has seen some signicant

adjustments to the socio-economic levels across all of Mex

As illustrated in the bar chart, there has been a noticeable shthe socio-economic composition of Mexico with the emergenof a very large and growing middle class.


11/79


Housing Composition

Colonias populares: The most critical housing conditions are in the newer or uncon-olidated irregular settlements, or colonias populares, resulting from unauthorized landevelopment and construction. These areas have decits in urban services, are often

igh-risk areas and those living there do so with dubious property titles. Most settle-ments have been improved to varying degrees as property is regularized, infrastructurend services are put in and houses are solidly built. Yet, the colonias never becomeompletely regular. Legalized properties become irregular again through intestate inheri-ance, dilapidation or scal problems. Irregular settlements constitute roughly half of the

rbanized area and house more than 60 percent of the population.

Inner-city rental slums rental slums (vecdades): These slums date from the late19th century and comprise houses aba

doned by the wealthy and converted intenements for the poor, providing themodel for purpose-built cheap rental hoing. After the 1940s, the production of

rented vecindades continued in the pereral irregular settlements; but here, unlithe inner city, the landlords are often sludwellers themselves. About 10 percentall housing in Mexico City is in vecindad

Ciudades perdidas: This is a broad concept referring to small-scale pockets ofshanty housing on vacant land or undeable urban locations. These are no longquantitatively important as a form of slu

Cuartos de azotea: These are servants

quarters and makeshift accommodatioon the roofs of apartments or early pubhousing. They are almost invariably wecated in central areas and provide 0.4 pcent of all of Mexico Citys housing unit

Deteriorated public housing projects: Mformally produced, subsidized owner-o

pied housing projects built for the workclasses have become highly deterioratewith overcrowding and other social prolems. As much as 15 percent of MexicoCitys population now lives in govern-ment-nanced housing projects of varia

quality.

The vast majority of the precarious settments occupants are homeowners. On

percent of the housing in the worst arerented, compared to a metropolitan aveage of 17.3 percent. In the central area

the traditional vecindades and other renaccommodations continue to lose poption and are destroyed due to aging anland-use changes. Apart from the highlsuccessful housing reconstruction progafter the 1985 earthquake, further projefor re-populating the city center have halimited impact since they are severely hpered by a lack of viable nance and la

for development.

Many public housing projects throughothe city are becoming slums. Inadequa


12/79


elf-administration of these projects has led to lack of mainte-ance, invasion, degradation of public space, structurally danger-us alterations and bad neighborhood relations. All of this is ag-

ravated by the original cheap construction, low space standardsnd the increasing impoverishment of their working-class occu-

pants, smitten by unemployment, alcohol and drug dependency,ocial violence and high crime rates.

regular settlements continue to develop in a more dispersednd differentiated manner, especially in the metropolitan munici-

palities. The city is growing disproportionately to demographicncrease, accommodating smaller families and an aging popula-on. Nevertheless, most of the city has been built now, and whatappens within existing colonias will determine the quality of

uture habitats for the majority of the poor. The original problems

of precarious construction, risks from landslides or ooding a

insufcient services are compounded by deterioration and ove

crowding. The advantages of irregular settlements are exibilit

and relatively large plots that accommodate extended familiesand second or third generations. In the last decade, nancial

sidies have been directed at formal commercial developmentsmass-produced tiny single-family houses on the extreme outsof the city.

About two-thirds of Mexico Citys population live in colonias

populares; but by no means should all be considered to be s

dwellers. In fact, most colonias contain some degree of socia

heterogeneity. The distinguishing characteristic of hopeless slis not so much the poverty of all of their inhabitants, but, raththe absence of middle and high-income families.

3.7 Mexico City Retail Inventory

Mexico City is home to some of the largest and most modernhopping malls in Latin America. These malls feature upscalehops, chic restaurants, fast food courts, high-end departmenttores, multi-cinemas and some of the most imaginative displays

you will seeanywhere.

The mallsand sometruly unique

shoppingneighbor-hoods arespread outall over thecity.

Mercados

(marketplaces) areanother

popular shopping experience to be found all over Mexico City.The many local Mercados range in size from small, impromptu,

ea markets set up in minutes to sprawling outdoor affairs sellingurniture to elaborate buildings with 00 or 300 separate stalls.

Downtown, in the general area of the Zcalo, there are numeroushops and market places, some located in converted colonialra mansions. Some of the areas markets sell only curios andrinkets; others sell serious antiques, custom jewelry, ne gold

nd pearls. On Sundays, La Lagunilla market hosts a ea market

f interest to those who collect antiques or coins.

n the Zona Rosa district you will nd a number of small shops

nd small walk-in shopping arcades housing art galleries, jewelrytores, boutiques and silver stores. This area is home to numer-

ous, one-of-a-kincrafts and antiquestores. Flea marktend to pop up insome areas of ZoRosa on the weekends. You will alsond many sidewa

cafes and some othe citys more po

lar restaurants anclubs here.

Condesa is a fashionable, but relaxed, neighborhood south oZona Rosa that has become popular with the artistic crowd. Tmany art deco buildings and old European style townhouses a pleasant and peaceful diversion from the busier pace of theadjoining neighborhoods. This is a great area to spend a leisuafternoon strolling among the many boutiques, art galleries,bistros, and sidewalk cafes that have made this area popular locals. Parque Mexico, a well kept green area, offers a somewquiet area for relaxation.

Polanco is

an upscaleresidential commerciadistrict thais lled with

elegant shoboutiques malls, sellinhigh-end sitems, desfashions,crafts, Talavera potter


13/79


nd china. The Presidente Masaryk area of Polancos where you will nd the shops of famous design-rs such as Gucci, Christian Dior and Herms along

with some incredible restaurants and sidewalk cafeshrown in for good measure. This area is often com-

pared to the ultra trendy Rodeo Drive in Los Angeles.

The Southernsection of the cityis the favorite areaof many MexicoCity residents.

The Perisur andCoyoacan mallsare located here.Perisur is well-lo-cated in the south

f the city and is easily accessible. In Perisur, a largehain of Mexican movie theaters called Cinepolis

as created one of the most amazing and innovativentertainment areas in Latin America. They feature0 screens, including 4 VIP auditoriums and a host ofoncession stands. Perisur, one of the most importantnancial areas of the city, also has a huge variety of

dditional stores such as travel agencies, opticians,beauty salons and phone stores.

Due mainly to their elegant colonial atmosphere, theuburbs of San Angel and Coyoacnre considered by many to be thenly place to visit when vacationing inhe capital. San Angel is famous for

s Bazar Sbado (Saturday Market)eld in Plaza San Jacinto. The indoor

market features higher quality goods,but the outside portion is known forbetter prices. Coyoacan is a tradition-l colonial neighborhood with cobbledtreets lled with libraries and lots of

istory. You will nd many boutiques

nd handicraft stores where theraftsmen sell their work.

Santa FeSanta Fe is the largest mall in LatinAmerica, with 85 stores, a movie

theater, an international exhibition center, hotels andseveral restaurants. It is in the wealthy Santa Fe dis-trict, which, in recent years, has become the favored

ofce real-estate property in the city. Santa Fe Mallis the result of a very ambitious visionary project thatmakes it currently the largest shopping center in LatinAmerica. You can nd the most important depart-ment stores in the country here, such as El Palacio deHierro, Liverpool and Sears. The parking lot has spacefor over 5,000 cars.

La CiudadelaIt is home to the most important handicraft exhibi-tion in all Mexico, with more than 300 workshops andstands; theywill even shipyour purchasesinternationally.Here you cannd craftsmen

from differentethnic groups,such as Zapo-tecs, Otomis,Mazahuas,Purepechas,Mayas, Mixtecs and Huichols who make the work thatgives La Ciudadela its international fame.

Mundo ECarefully planned to allow for future expansion, MundoE is the most attractive shopping and entertainmentcenter in Mexico City. It features outstanding inter-national-cuisine restaurants and almost 150 stores,of which about a hundred are boutiques by the mostprestigious brands. You will also nd a movie theater

complex featuring the only digital screen in Mexico.


14/794


3.8 Mexico City Transportation

According to information provided by the city govern-ment, in 007, most people travelled around MexicoCity using public transportation (74.1%)

The main reason to travel is to move from home towork or school, and back again. Peak trafc occurs at

8:00am, :00pm and 6:00pm on weekdays.Mexico City, being the biggest urban populationcenter in the world, and spread over a large area, hasvery demanding transportation needs. 84% of itsinhabitants use public transport, which accountsfor 7% of the total number of vehicles on the roads.Private vehicles make up 85% of the remainder, andfreight 16%. This situation creates the following urbanproblems: heavy vehicles, pedestrian movement,

heavy road congestion, high pollution due to fuelconsumption and low efciency of public service. The

previous table breaks down the types of transporation.

Mexico City also maintains a very extensive subwasystem with 10 distinct lines that provide coveragea large portion of the inner city. The map below shthe individual subway lines and stations. The MexCity Subway System is the largest mass transporttion system in Mexico. The network is integrated b11 different lines with 175 stations of which areterminals. Of the 175 stations, 106 are undergroun

The number of passengers, trips per person, typenumber of vehicles, electric public transport, subwcharacteristics and the general transportation netwere provided by the ZMCM authority Passengers


15/79

4.0 Amway StoreDistribution Optimization

4.2 Geo-Demographic Summary

No segment is mutually exclusive to one particular mar-et area. In most instances a dominant level is evident,et pockets of other segments do co-exist. The table

below indicates the population distribution across theve major zones. The majority of the population base of

Mexico City resides across both the C and D levels. It isnteresting to note that over past several years a numberf local residents have successfully transitioned them-elves out of the E socio-economic level into the D-

nd higher levels. As illustrated on the map below, there

re few pockets of E level residents in Mexico City.

The initial step is to divide Mexico City into ve large zones. As indicated in the market overview section, each zone is comprised o

umber of smaller communities; however, in order to obtain some level of market understanding the ve geographic zones were

elineated. Each market zone offers some degree of distinction from the other; however, given the magnitude of the city, no single

one is home to a single socio-economic segment.

4.1 Market Zones/Trade Area Delineation

With the city divided into distinct zones, it is necessary to evaluate each market area on its own merit to determine if the local traderea is a suitable option for an Amway location.

Primary SEL Total Income Total Population

A/B 1,070,190,115 563,967

C+ 953,056,848 1,175,678

C- 8,483,300 1,934,83

D+ 66,09,784 3,177,809

D- 175,00,40 1,951,378

E 347,053 13,856

Total 3,683,17,50 8,817,511


16/796

4.0 Amway StoreDistribution Optimization

It is interesting to note that the socio-economic groups are delineated by rings. The

map shows that in the center of the city resides the most afuent people (A/B) with the

C+ level circling around the A/B followed by the C- and through to the D- areas which

are predominantly located on the outer ring of the city (shown in green).


17/79

5.0 Mexico City ZoneMarket Studies

5.1 Mexico City Neighborhood Characteristics

Centro - Covers the historic downtown of Mexico City.

Condesa - Artistic district notable for its Art Deco architecture.

Roma - Beaux Arts neighborhood next to Condesa, one of the oldest

n Mexico City.

Ciudad Satlite - Upper middle class suburban residential

eighborhood.

Coyoacn - Town founded by Corts, swallowed by the city in the 50s.

Del Valle - Cradle of Jos Lpez Portillo and other important people in

Mexican history.

Lomas de Chapultepec - Upscale residential neighborhood.

Colonia Npoles - Middle class.San ngel - Colonial town swallowed by the city.

Santa Fe - Financial and business district.

ardines del Pedregal - Upscale residential neighborhood.

Polanco - Shopping, business and tourist area.

Tepito - Popular ea market.

Tlatelolco - Site of the Plaza de las Tres Culturas. High-density

eighborhood.

Villa Coapa - Middle class neighborhood.

Zona Rosa - Shopping district and tourist area.


18/798

Alvaro Obregon

Alvaro Obregn is located along the west side MexicoCity and is 97 square miles, which represents 6.5%percent of the total area of the Federal District andis 6th largest in size of all the neighborhoods. Thegeographic limits of this area are: the North with theneighborhood of Miguel Noble; to the East with theneighborhoods of Benito Jurez, Coyoacn and Tlal-pan; to the South with the neighborhoods of Magda-lena and Contreras; Tlalpan and State of Mexico areto the West.

According to the 000 Census, the population of theneighborhood was 687,00 (359,589 women and37,431 men). The population of Alvaro Obregnaccounts for 7.98% of the total population of theFederal District. The growth of the population in the

area has increased from a density of 4,874 hab/kmin 1970 to 7,083 hab/km in 000. The District isformed by 57 colonies, divisions and districts witthe following being most important: San Angel, Sa

Angel In, Tlacopac, Hermitage, Chimalistac, Floridand Pedregal of San Angel.

The minimum wage in Mexico City is 5.59 pesosday ($4.85 US). The minimum wage in the FederaDistrict (Distrito Federal D.F.), which encompassesMexico City, is considerably higher than in other pof the country, and there are also higher minimum

wages established for some industries. Salaries cabe established according to unit of time or work, alump sum, commission or any other criteria to whthe parties agree. Most employees earn between and times the minimum wage.



19/79


Population - 12 years and more - schooling - secondary and technical or commercial studies

Age Group

Without post

primary

instruction Secondary instruction and technical or commercial studies

With

instruction

average

superior Not Specified

Secondary Technical or commercial studies with primary finished

1 G rade 2 G rade 3 G rade Not specif ied 1 G rade 2 G rade 3 G rade Not specif ied

9 and under 8 ,715 4,478 4,810 7,397 42 4 2 3 0 14,633 140

0 - 29 4 ,057 358 641 6,584 1 10 8 37 3 50,777 368

0 - 39 3 ,831 235 526 5,451 0 9 39 178 11 49,292 463

0 - 49 5 ,320 265 515 4,671 1 38 147 679 43 39,228 442

0 - 59 6 ,151 212 404 3,573 0 53 202 1,124 40 23,081 397

0 and over 16 ,805 504 878 6,639 4 94 392 1,929 107 23,105 665ota l 44 ,879 6,052 7,774 34,315 48 208 790 3,950 204 200,116 2,475

The illiteracy level has decreased in the last decade,n 1970 13.3% of the population of 15 years and overid not know how to read or write; thirty years later

his percentage has fallen to 3.4%. In 000, 6 out ofvery 100 people did not have primary instruction,1 obtained a basic average education and 56 pos-essed superior educations. For the 1998-99 schoolear Alvaro Obregn had 164,357 students, 7,875eachers and 563 establishments.

n 000, 165,186 houses existed in the neighborhood;which was an increase of 4,950 more than 1980.During the period between1990-000, Alvaro Ob-egn experienced a growth rate of .1% which washe 8th largest of the Districts. The average occupant

per house in 000 was 4.1 people, while 0 years agoit was 5. people per house. This average is higherthan the Federal District which was 5.0 in 1980 and

4.0 for the 000.

Workers in the area are predominantly employedin the following sectors: Commerce, Construction,Other Services and Manufacturing.

The table below provides a comprehensive detail ofthe education background of the residents within

Alvaro Obregon. A large number of people (163,635)have only a primary level of education compared witha slightly higher number (08,85) that have a univer-sity degree.


20/790


Azapotzalco

Azcapotzalco is located in the northeast part of theFederal District, bordering the boroughs Gustavo A.Madero, Cuauhtmoc and Miguel Hidalgo, as wellas the Mexico State municipalities of Naucalpan and

Tlalnepantla. The total population is 441,008, com-

prised of 10,101 men and 30,907 women. Thispopulation accounts for 7.88% of the total populationof the Federal District. The physical size of the District

is 33.3 sq. km. The population density per sq. km13,30 people.

3% of the working population earns over 5 timethe minimum wage. Surprisingly, despite the lowethan average level of education that is prevalent incommunity, few individuals fall below the minimumwage benchmark.

Over 1/3 of the working population is employed in Manufacturing and Commerceditional employment is captured largely inHotel sector and in Educational services

1.59% of the population over the age ohas no education over the primary gradewhile 35% of the population has obtainedinstruction over secondary or technical sdards. However, the fact remains that a snicant portion of the local population ba

has achieved a modest level of educatio

Population - 12 years and more - schooling - Distribution according to instruction level

Age Group

Without post

primary


With

instruction

average

superior Not Spe


1 Grade 2 G rade 3 G rade

No t

specif ied 1 G rade 2 G rade 3 G rade Not specif ied

19 and under 12 ,580 7,824 8,140 12,976 38 8 6 11 2 18,645

20 - 29 7 ,501 1,245 2,507 19,359 3 13 45 125 5 52,983

30 - 39 11,522 939 2,041 15,519 3 34 132 432 10 42,035

40 - 49 16,083 634 1,283 8,697 4 70 317 1,034 30 23,688

50 - 59 17,669 415 762 4,689 1 66 252 1,047 15 10,519

60 and over 29 ,875 483 707 3,753 1 81 233 957 16 7,140

Total 95 ,230 11,540 15,440 64,993 50 272 985 3,606 78 155,010


21/79


Benito Jurez

The neighborhood of Benito Jurez is located in theeographic center of the City of Mexico. It borderso the north the neighborhoods of Miguel Hidalgond Cuauhtmoc; to the south Coyoacn; to theast Iztapalapa and Iztacalco, and to the west Alvaro

Obregn.

n the year 000, the neighborhood had a populationf 360,478 which represents 4.% of the populationf the Federal District. The population is

broken down into 44% men and 56%women. The rate of growth between995 and 000 was -0.8%. The pop-lation density of the neighborhood is

3,537 inhabitants per km. Altogeth-r, the neighborhood is formed by 56olonies, where the 359,330 inhabit-nts live in 115,91 houses.

Benito Juarez is classied as a very af-uent community with a large number

f the local residents making over 10mes the minimum wage.

The average number of residents perouse is 3.1. 93.9% of the total homes

built are constructed with suitable

materials. Of the homes which are constructed withsuitable materials, 7% are houses and 6% areapartment buildings. 99.% of the houses have ac-cess to running water, 99.5% to sewage and 100%have electricity.

The Benito Jurez neighborhood has a 98.9%literacy rate with its residents having an average

schooling of 1.6 years, which speaks to its highsocio-economic level.


Age Group

Without post

primary


With

instruction

average



1 G rade 2 G rade 3 G rade Not specified 1 G rade 2 G rade 3 G rade Not specified

9 and under 8,715 4,478 4,810 7,397 42 4 2 3 0 14,633 140

0 - 29 4,057 358 641 6,584 1 10 8 37 3 50,777 368

0 - 39 3,831 235 526 5,451 0 9 39 178 11 49,292 463

0 - 49 5,320 265 515 4,671 1 38 147 679 43 39,228 442

0 - 59 6,151 212 404 3,573 0 53 202 1 ,124 40 23,081 397

0 and over 16,805 504 878 6,639 4 94 392 1 ,929 107 23,105 665

o ta l 44,879 6,052 7,774 34,315 48 208 790 3,950 204 200,116 2 ,475


22/79


CoyoacnCoyoacn is located in the center of the Federal

District and borders lvaro Obregn, Benito Jurezand Iztapalapa boroughs. It ranks as the 4th most

populous District in the Federal District, with a popu-lation of 640,43 people. Women out-populate themen; 339,994 women reside in the district and300,49 are men. The district is 53.8 sq. km which isone of the smaller districts in physical size. The

combination of a large population and small size acount for the high population density of 11,858 peper sq. km.

The majority of all residents in this neighborhoodmake 1- times the minimum wage or higher. Thetable demonstrates the strong income levels that aachieved across a number of ranges, leaving fewresidents that fall below the minimum wagebenchmark.

The main focus of employment is largely the Commerce and Manufacturing sectohowever, as the table illustrates thecommunity of Coyoacn employs individacross a number of sectors, including th

Government sector, Other Services anEducational Services.

The table below provides a comprehen-sive detail of the education background the residents within Coyoacn. While thearea maintains a large population base, signicant portion of the community has

primary education (113,610), compared over 75,000 people that have a universdegree.


Age Group

Without post

primary


With

instruction

average

superior Not Spec


1 G rade 2 G rade 3 G rade Not specif ied 1 G rade 2 G rade 3 G rade Not s pec i f ied

19 and under 19 ,666 10 ,715 11 ,012 17 ,202 46 16 9 9 0 27 ,975

20 - 29 11 ,889 1 ,413 2 ,948 23 ,634 3 21 49 132 4 86 ,309

30 - 39 13 ,420 990 2 ,229 17 ,007 1 30 93 336 14 64 ,478

40 - 49 18 ,324 649 1 ,424 10 ,526 3 76 311 1 ,219 40 49 ,211

50 - 59 19 ,933 492 948 6 ,546 8 88 379 1 ,667 44 27 ,688

60 and ove r 30 ,378 558 902 6 ,091 5 114 408 1 ,764 68 19 ,709To ta l 113 ,610 14 ,817 19 ,463 81 ,006 66 345 1 ,249 5 ,127 170 275 ,370


23/79

Cuajimalpa de Morelos


Cuajimalpa is located in the center of Mexico City,

bordering with lvaro Obregn and Miguel Hidalgoboroughs.

The population of the neighborhood is 151, whichmakes it one of the smaller districts of Mexico City.

accounts for only .7% of the total population. Thephysical size of the district is 80.9 sq. km. resulting in

population density of 1,867 people perq. km.

The Cuajimalpa community is largelyomprised of middle class to lower middle

lass individuals. The vast majority ofpeople make approximately 1- timesminimum wage. A large percentage of thepopulation exceeds the minimum incometandards by as much as 10 times. Ithould be noted that very few people

make below the minimum wage.

The main focus of employment in Cuaji-malpa is largely concentrated in a clas-ication measured as Other Services.

Commerce, Manufacturing and Construction alsoserve as a large source of employment in the area.

The table below provides a comprehensive detail of

the educational background of the residents withinCuajimalpa. While the area maintains one of the lowerlevel population bases, the level of education is almostevenly split between those that have just a primary/grade school education (36,490) and those that havea post secondary education (40,764).


Age Group

Without

post

primary


With

instruction

average



1 G ra de 2 G ra de 3 G ra de Not speci f i ed 1 G rad e 2 G rad e 3 G rade Not speci f i ed

9 and unde r 6 ,59 8 3 ,025 2 ,993 4 ,941 11 4 3 4 0 5 ,490 13 7

0 - 29 5 ,11 3 541 1 ,041 8 ,766 1 6 12 24 0 13 ,852 28 4

0 - 39 6 ,32 1 331 779 5 ,688 0 4 20 63 3 12 ,040 22 6

0 - 49 6 ,75 1 141 328 2 ,314 0 10 18 99 3 5 ,820 12 4

0 - 59 5 ,27 1 61 124 760 0 4 14 63 3 2 ,331 64

0 and ove r 6 ,43 6 35 71 467 0 2 14 32 0 1 ,231 88

o ta l 36 ,490 4 ,134 5 ,336 22 ,936 12 30 81 285 9 40 ,764 92 3


24/794


CuauhtmocCuauhtmoc is the second most concentrated area

in terms of population in District Federal with 15,880people per sq. km.

The District of Cuauhtmoc covers only 3.4 sq. km.and has a population of over 500,000. This resultsin a population density of 15,880 people per sq. km.It is the second densest district in Mexico City. Thepopulation of Cuauhtmoc accounts for 9.% of thetotal population of the city.

As illustrated in the above table a large portion of thepopulation in Cuauhtmoc is 19 years of age andyounger.

The Cuauhtmoc community is classied as a bei

largely comprised of individuals that make signica

higher income levels than a minimum wage benchmark. It should be noted that few people make bethe minimum wage.

The main employment of Cuauhtmoc is in theCommerce sector, where some 57,000 people areemployed. As noted in the table, outside of beingemployed in the Commerce sector, jobs are moreevenly distributed across a number of sectors.

The table below provides a com-

prehensive detail of the educationabackground of the residents withinCuauhtmoc. A signicant portion o

the community has a university deg(196,000) compared with over 101,people that have a primary educatio

A large percentage of the populatiobase has also acquired a secondarand/or a technical education.


Age Group

Without post

primary


With

instruction

average

superior Not Spec


1 G rade 2 G rade 3 G rade Not speci f ied 1 G rade 2 G rade 3 G rade Not speci f ied

19 and under 15,275 8,851 9,224 14,266 75 13 6 8 3 20,324

20 - 29 9,145 1,528 2,779 1 9,928 3 27 42 99 7 59,305

30 - 39 12,190 1,022 2,133 15,841 6 49 126 406 22 49,351

40 - 49 16,207 779 1,535 10,281 1 99 358 1,038 55 34,510

50 - 59 16,348 515 927 5,766 6 92 372 1,188 42 17,705

60 and over 32,656 756 1,113 6,620 2 145 398 1,512 71 15,545 T ota l 101,821 13,451 17,711 72,702 93 425 1,302 4,251 200 196,740


25/79


Gustavo A. Madero

Gustavo A. Madero is located in the north of theederal District, bordering Venustiano Carranza, Cu-uhtmoc and Azcapotzalco boroughs as well as the

Mexico State Ecatepec de Morelos, Nezahualcoyotlnd Tultitln. The neighborhood is home to the worldamous Basilica of Guadalupe.

n 000, the population was 1,33,9 but byhe year 005 the population had decreased to,193,161. The population density in 005 was4,45 people per sq. km. which was aecrease from 000 when it was 14,511

people per sq. km. Gustavo A. Maderos the 5th largest neighborhood in sizeovering 86.6 sq. km.

A large percentage of Gustavo Maderoesidents make just above the minimum

wage (making only 1- times that ofhe minimum wage). However, very few

people make below the minimum wage.

The local employment base is dominatedby Manufacturing and Commerce withmited concentration of employmentcross all other sectors.

The table below provides a comprehensive detail ofthe educational background of the residents within

Gustavo A. Madero.A signicant portion of the com-munity has a university degree (383,000) comparedwith 9,513 who have a primary education A sig-nicant percentage of the population base acquired

a secondary and/or a technical education (approxi-mately 74,000).


Age Group

Without post

primary


With

instruction

average



1 G rade 2 G rade 3 G rade Not speci f i ed 1 G rade 2 G rade 3 G rade

N ot

speci f i ed

9 and unde r 40 ,115 23 ,437 24 ,117 38 ,534 49 29 15 12 3 50 ,43 2 574

0 - 29 29 ,843 4 ,297 8 ,112 63 ,229 14 45 80 169 3 134 ,2 97 1 ,237

0 - 39 41 ,041 3 ,058 6 ,385 47 ,589 7 84 266 767 8 100 ,4 59 990

0 - 49 50 ,163 1 ,634 3 ,500 23 ,810 7 161 618 2 ,163 30 55 ,73 4 649

0 - 59 49 ,282 1 ,048 1 ,943 11 ,700 3 156 694 2 ,322 40 25 ,89 0 494

0 and ove r 82 ,069 1 ,144 1 ,744 9 ,142 3 166 524 1 ,943 45 16 ,56 0 880

o ta l 292 ,513 34 ,618 45 ,801 194 ,004 83 641 2 ,197 7 ,376 129 383 ,3 72 4 ,824


26/796


Iztacalco

Iztacalco was once simply the commercial center ofan agricultural (corn, beans, oats, and alfalfa) andlivestock-raising region, but, with the growth of thefederal capital, it has become part of Mexico City.

The industries in the area include canneries, chemical

plants and factories producing cardboard, mattresses,furniture and hats. It is also known for its market. Izta-calco is easily accessible by highway, railroad and air.Pop. (1990 prelim.) 448,357.

The Iztacalco community is largely comprised ofindividuals that make signicantly higher income

levels than a minimum wage benchmark. It shoube noted that few people make below the minimuwage.

A large percentage of the community makes apprmately 1- times that of the minimum wage.A largportion of the residents make between 3 -5 times minimum wage.

Iztacalco is largely concentrated in Manufacturing Commerce. As the table clearly demonstrates thetwo sectors dominate the labor pools in the area w

a limited number of jobs available across all otherverticals.

The table below provides a comprehensive detail the educational background of the residents withinIztacalco. While the area maintains a comparativesmaller population base a large number of theirresidents have only been able to achieve a very balevel of education (92,910). Of note, a signicant

percentage of the population base has a secondaand/or a technical education (approximately 88,00Over 135,000 people have acquired a university leeducation.

Population - 12 years and more - schooling - secondary and technical or commercial studie

Age Group

Without post

primary


With

instruction

average

superior Not Spec


1 G rade 2 G rad e 3 G rade Not specif ied 1 G rad e 2 G rade 3 G rade Not s pec i f ied

19 and under 12 339 7 450 7 670 12 292 20 8 5 4 1 16 627

20 - 29 8 ,172 1,308 2,559 19,278 1 21 27 74 4 46,918

30 - 39 11,530 880 2,065 15,133 4 14 73 284 9 36,735

40 - 49 15,364 603 1,217 8,337 0 48 1 96 672 12 20,893

50 - 59 16,576 382 708 4,184 1 64 2 11 634 21 8,373

60 and over 28 ,929 361 625 3,124 0 44 1 57 528 23 5,803

T ota l 92 ,910 10,984 14,844 62,348 26 199 6 69 2,196 70 135,3 49


27/79


ztapalapa

ztapalapa is located in eastern Mexico City. It cov-rs an area of 117 square kilometers. On the northborders the borough Iztacalco; on the west Benitouarez and Coyoacn; on the south Tlhuac and

Xochimilco; and on the east, the towns of Nezahual-yotl, La Paz and Valle de Chalco Solidaridad, inhe state of Mxico. At the time of the 005 census,ztapalapa had a population of 1,80,888, making ithe most populous borough of the Mexican capital,nd one of the most populous in the country. In 000,he population was 1,771,673. The neighborhood isne of the larger neighborhoods in the Federal Districtt 115.0 sq. km. The population density per sq.m. in 005 was 15,86.

During the 1970s the average house contained

more than 6 members. Due to an increase inousing starts that number has now fallen to 3r 4 members per house.

The Iztapalapa community is comprised ofndividuals with income levels that are 1-3 timesbove the minimum wage benchmark. Few

people make below the minimum wage.

ztapalapa is largely concentrated in Manufac-uring and Commerce. As the table clearly dem-

onstrates, these two sectors dominate the employlabor pools in the community with a limited number of

jobs available across all other verticals.

The bottom table provides a comprehensive detail ofthe educational background of the residents withinIztapalapa. The area maintains a massive popula-tion base with some 448,000 local residents having aprimary/grade school education with an equally highnumber of residents (45,000) having a universityeducation. Moreover a signicant percentage of the

population base has a secondary and/or a technicaleducation (approximately 40,000).


Age Group

Without post

primary


With

instruction

average



1 G rade 2 G rade 3 G rade Not specif ied 1 Grade 2 G rade 3 G rade

No t

specif ied

9 and under 71,783 36,283 36,663 61,012 234 32 13 17 3 67,743 1,415

0 - 29 57,177 7,244 13,540 104,295 15 47 86 186 11 170,932 2,909

0 - 39 74,342 4,577 9,558 72,047 19 83 271 701 32 121,109 2,143

0 - 49 88,124 2,457 4,917 34,062 5 145 606 1,743 74 60,389 1,424

0 - 59 73,167 1,264 2,223 13,341 3 119 506 1,619 64 21,779 1,058

0 and over 83,576 854 1,239 6,999 7 83 285 1,042 34 10,528 1,494

otal 448,169 52,679 68,140 291,756 283 509 1,767 5,308 218 452,480 10,443


28/798


Madalena Contreras

The name of the neighborhood refers to the 17thcentury St. Maria Magdalena Chapel.

In 000 the population was ,050 people of which106,469 were men (48%) and 115,581 were women(5%). In 000 96.5% of the population knew how toread and to write and had attended some schoolinglevels.

The Madalena Contreras neighborhood is largelycomprised of individuals that make approximatelytimes that of the minimum wage. In addition, a lar

portion of the residents make between 3 -5 higherincome levels than a minimum wage benchmark. people make below the minimum wage.

The employment in Madalena Contreras is more ely distributed across a number of industry verticals

The two large verticals for employment are Command Other Services followed closely by Construc

and Manufacturing.

The table below provides a comprehsive detail of the educational backgroof the residents within Madalena Con

ras. The education levels are very evedivided across the three core levels: mary/grade, high school/trade and psecondary education (university).


Age Group

Without

post

primary


With

instruction

average

superior Not Spec


1 G ra de 2 G ra de 3 G ra de Not speci f ied 1 G rad e 2 G ra de 3 G ra d e Not speci f ied

1 9 a n d u n d e r 9 ,2 37 4 ,3 2 3 4 ,3 4 5 6 ,9 4 4 1 9 3 3 1 1 7 ,6 2 2

2 0 - 2 9 7 ,3 44 9 43 1 ,9 3 4 1 2 ,1 29 2 3 1 0 3 3 1 2 1 ,5 7 9

3 0 - 3 9 9 ,0 78 6 00 1 ,3 1 1 8 ,3 0 5 2 15 3 2 8 5 1 1 5 ,5 8 9

4 0 - 4 9 1 0,2 85 3 12 5 56 3 ,5 3 4 1 18 5 4 21 6 2 9 ,1 5 2

5 0 - 5 9 8 ,7 73 1 25 2 63 1 ,4 9 3 1 14 4 7 21 1 3 4 ,5 3 1

6 0 a n d o ver 1 1,0 34 1 03 1 81 1 ,1 4 1 0 13 5 7 20 9 1 0 3 ,1 9 4T o ta l 5 5,7 51 6 ,4 0 6 8 ,5 9 0 3 3 ,5 46 2 5 66 2 0 3 75 5 1 8 6 1 ,6 6 7


29/79


Miguel Hidalgo

The neighborhood of Miguel Hidalgo covers a verymall geographic area of just less than 47 sq. km.

The population in 000 was 35,640 comprising of

9,508 women and 160,13 men. The populationensity was 7,853 people per sq. km.

The Miguel Hidalgo neighborhood is largely comprisedf individuals that make approximately 1- times thatf the minimum wage. In addition, a large portion ofhe residents make between -5 times higher income

evels than a minimum wagebenchmark. Few peoplemake below the minimum

wage.

The main areas of employ-ment by the residents areCommerce and Other

Services, followed by

Manufacturing. Other sec-ors which provide limitedmployment are Construc-on, Professional Services,

Educational Services and

Real Estate Services.

The bottom table provides a comprehensive detail of

the educational background of the residents withinMiguel Hidalgo. Approximately 145,000 residentshave post secondary education. 68,188 people havea primary/grade school level of education. A largenumber of the local population has a high school ortechnical education.


Age Group

Without post

primary


With

instruction

average



1 G rade 2 G rade 3 Grade Not specif ied 1 G rade 2 G rade 3 G rade Not specif ied

9 and under 10,306 5,389 5,741 9,376 46 12 6 3 1 14,707 206

0 - 29 7,301 770 1,598 12,737 0 17 24 65 5 42,657 583

0 - 39 8,290 634 1,388 10,088 0 24 78 255 6 35,027 550

0 - 49 10,356 410 885 5,992 2 41 179 630 11 24,177 428

0 - 59 10,859 292 512 3,388 0 42 185 741 22 14,431 327

0 and over 21,076 424 604 4,320 4 64 223 948 32 14,423 588

ota l 68,188 7,919 10,728 45,901 52 200 695 2,642 77 145,422 2,682


30/790


Milpa Alta

Milpa Alta covers an area of 8 sq. km. It presents aheavily mountainous relief. Its lowest point, San An-tonio Tecomitl, has an altitude of ,50 meters above

sea level, ten meters above the median altitude forMexico City. Surrounding the Teuhtli volcano is a stripof slightly sloped land that gradually becomes highermoving west. This region, known as the Milpa AltaValley, inhabits most of the boroughs population.

Milpa Alta is the southern most of the neighorhoodsof the Federal District. It borders Tlalpan, Xochimilcoand Tlhuac boroughs, as well as with the State ofMorelos and Mexico State.

The population of Milpa Alta has increased from

96,744 in 000 to 115,895 by 005. Milpa Alta hathe lowest population density in the Federal Distric005, the population density was 408 people per km. up from 341 in 000.

Across Milpa Alta the majority of the local residenthave income levels that are 1- times above the mmum benchmark. There are fewer people positionin the higher income brackets while there has beeincrease in the number of people that make less th

the minimum wage

Unlike most neighborhoods

Milpa Alta employment baseis spread across a number overticals including CommercManufacturing, Constructionand Agriculture.

The table below provides acomprehensive detail of theeducational background of tresidents within Milpa Alta. Alarge percent of the residenthave very limited levels ofeducation.


Age Group

Without post

primary


With

instruction

average

superior Not Spec


1 G ra de 2 G rad e 3 G rad e Not speci f ied 1 G ra de 2 G rad e 3 G ra de Not speci f ied

1 9 a n d u n d e r 4 ,5 18 2,2 39 2,12 8 3 ,47 4 7 4 0 1 0 3,32 7

2 0 - 29 3 ,8 71 4 32 73 8 5 ,92 8 1 1 1 10 0 7,02 8

3 0 - 39 4 ,7 57 2 54 56 9 4 ,52 7 0 2 7 17 1 4,92 9

4 0 - 49 4 ,7 83 1 37 25 9 1 ,79 0 1 2 1 1 21 0 2,30 4

5 0 - 59 3 ,7 16 47 11 2 69 2 0 1 5 15 0 75 8

6 0 an d o ver 5 ,0 98 35 5 6 26 1 1 3 4 11 0 36 6T o ta l 2 6 ,7 43 3,1 44 3,86 2 16 ,67 2 1 0 13 2 8 75 1 1 8,71 2


31/79


Tlhuac

Tlhuac is located on the east edge of the district ands largely rural in character. The main town, San PedroTlhuac, is situated alongside a lake, and is the site of

16th century church.

The population table illustrates the comparativelyoung age of the locals that reside in Tlahuac.

The Tlahuac community is largely comprised of indi-iduals that make approximately 1-mes minimum wage. A large per-entage of the population exceedshe minimum income benchmark;

making anywhere from -10 times

hat of the minimum wage. Very fewpeople make below the minimumwage.

The main focus of employment in Tlahuac is in Com-merce and Manufacturing related jobs. As noted

in the table, a number of additional sectors supportlimited levels of employment.

The bottom table provides a comprehensive detail ofthe educational background of the residents within

Tlahuac. A large portion of the residents have verylimited levels of education.


Age Group

Without post

primary


With

instruction

average



1 G ra de 2 G rad e 3 G ra d e Not speci f ied 1 G ra de 2 G rad e 3 G rad e Not speci f ied

9 a n d u n d e r 46 ,63 6 1 1 ,5 9 4 6 ,1 76 6 ,4 3 0 1 0,5 35 6 1 1 1 3 6 1 1 1 ,5 2 5

0 - 2 9 59 ,40 1 8 ,2 3 2 1 ,1 08 2 ,2 5 5 1 8,5 42 3 1 3 17 36 1 2 8 ,5 8 3

0 - 3 9 51 ,26 4 1 1 ,4 2 7 7 65 1 ,7 5 5 1 4,2 17 3 1 5 55 99 3 2 2 ,4 4 0

0 - 4 9 30 ,89 0 1 3 ,7 5 8 4 20 8 9 6 6,1 32 3 2 0 75 1 83 4 9 ,1 3 2

0 - 5 9 16 ,79 8 1 1 ,3 8 2 1 72 3 1 8 2,1 03 1 1 9 59 1 26 2 2 ,4 4 8

0 a n d o ve r 15 ,60 2 1 3 ,3 2 2 92 1 6 4 7 67 0 8 22 59 2 9 4 0o ta l 2 20 ,59 1 6 9 ,7 1 5 8 ,7 33 1 1 ,8 1 8 5 2,2 96 7 1 8 6 2 31 5 09 1 3 7 5 ,0 6 8


32/79


Tlalpan

Tlalpan is located in the southeastern part of theFederal District, bordering Contreras, lvaro Obregn,Coyoacn, Xochimilco and Milpa Alta boroughs aswell as the State of Morelos.

Tlalpan, is the largest county of Mexico City andlocated to the south of the City. It is composed ofboth rural and urban areas making it different fromother sectors of the City. 16.49% of its 304 sq. km.,

is urban with a population of 618,000 in 004 andestimated 70,000 in 005. The population growtrate during the last 4 years has been approximate1% a year; however the rural towns which accoun14% of the population are growing at a rate of alm5%.

The Tlalpan community is largely comprised ofindividuals that make approximately 1- times theminimum wage. A large percentage of the populatexceeds the minimum income benchmark; makinganywhere from -10 times that of the minimum w

Very few people make bethe minimum wage.

While employment capacacross the Tlalpan com-

munity suggest Commerrelated jobs are a key secthe table demonstrates adiversied employment b

which cross over a numbof sectors.

The table below providescomprehensive detail of teducational background the residents within Tlalp

A large portion of the resdents have very limited le

of education.


Age Group

Without

post

primary


With

instruction

average

superior Not Spec


1 G rad e 2 G ra de 3 G rad e Not speci f ied 1 G ra d e 2 G rad e 3 G rad e Not speci f ied

1 9 a n d u n d e r 8 8 ,3 88 23 ,57 7 1 1,0 80 11 ,47 2 1 8,0 64 3 2 1 7 11 5 0

2 0 - 2 9 11 6 ,9 24 17 ,24 2 2,0 32 3 ,85 2 2 6,7 68 1 2 6 24 1 2 5 1

3 0 - 3 9 9 1 ,6 80 20 ,00 4 1,2 71 2 ,68 3 1 8,4 69 6 2 9 91 2 7 4 3

4 0 - 4 9 6 9 ,0 90 22 ,58 8 6 86 1 ,47 6 9,2 14 4 4 9 1 86 7 0 2 16

5 0 - 5 9 4 2 ,9 11 18 ,38 5 3 82 66 2 4,3 27 2 4 2 1 81 8 8 5 13

6 0 a nd ove r 3 9 ,0 19 23 ,45 0 3 36 48 2 3,1 50 2 5 8 1 64 7 3 5 21T o ta l 44 8 ,0 12 1 25 ,24 6 1 5,7 87 20 ,62 7 7 9,9 92 4 7 22 1 6 57 2 ,7 2 6 54 1


33/79


Venustiano Carranza

The neighborhood of Venustiano Carranza is locatedn the center of the Federal District and is 3.34 hect-res in size, which represents .4% of the territory of

he Federal District. Of the 114,514 housesurveyed in 2005, 392 had earth oors,

6,448 had cement oors, 66,0452 had tile

r other material oors and 1,632 were not

pecied.

The Venustiano Carranza neighborhood isargely comprised of individuals that makepproximately 1- times that of the mini-

mum wage. In addition, a large portion ofhe residents make an income of between 35 times minimum wage. Few people make

below the minimum wage.

While employment capacities across theVenustiano Carranza community suggestCommerce related jobs are a key sector,he table demonstrates a well diversied

mployment base which cross over a num-ber of sectors.

The table below provides a comprehensive

detail of the educational background of the residentswithin Venustiano Carranza. Approximately 15,000residents have post secondary education. In total

10,000 people have a primary/grade school level ofeducation. In addition, a signicant number of localresidents maintain a high school or technicaleducation.


Age Group

Without

post

primary


With

instruction

average



1 G rade 2 G rade 3 G rade Not specified 1 G rade 2 G rade 3 G rade

No t

specified

9 and under 13 ,620 8,507 8,835 14 ,317 45 8 3 7 0 18,723 302

0 - 29 8 ,365 1,348 2,694 21 ,057 2 24 41 123 9 50,336 742

0 - 39 12 ,473 1,074 2,384 17 ,486 2 50 122 375 13 40,224 632

0 - 49 16 ,797 707 1,366 9 ,810 1 58 302 915 19 24,646 518

0 - 59 17 ,564 440 819 4 ,918 3 73 297 880 23 10,483 382

0 and over 33 ,575 609 838 4 ,572 1 65 260 958 25 7,890 589

otal 102 ,394 12,685 16,936 72 ,160 54 278 1,025 3,258 89 152,302 3,165


34/794


Xochimilco

The Xochimilco neighborhood is one of the Northern areas ofCoyoacn, Tlalpan and Iztapalapa. It borders Tlhuac to theast; Tlalpan to the west ; and Milpa Alta to the southeast. It is a5. sq. km. in size, making it the third largest area of the Cityf Mexico.

The population of Xochimilco has paralleled the growth of theCity of Mexico throughout the second half of the century. Thepopulation in 005 was 404,458 with 199,81 men and 04,646

women.The Xo-chimilcoareaincludesdiversezonesthatdene

the prole

of theirterrito-rial exten-

ion. The historical center is the heart of the neighborhood. Herehe main commercial, cultural and religious activities are concen-

rated. Today, Xochimilco nds itself in a period

f denition and assimilation between its rich

raditions and the urban challenges that comewith being a part of an urban area like MexicoCity.

The Xochi-milco neigh-

borhoodis largelycomprisedof individualsthat makeapproxi-mately 1-times that ofthe minimumwage. Inaddition, alarge portion of the residents make between 3 -5 times higherincome levels than a minimum wage benchmark. Few people

make below the minimum wage.

There are special buildings in the area like the Convent of SanBernardino, a superb 16th Century building. Characterized byits simplicity and monumentality, the building has a large atriumwhich is a main feature in traditional religious architecture ofMexico in the time of the viceroyship. Other chapels in the areare el Rosario, San Cristobal and Santa Mara. In the cen

of Xochimilco one can nd the Morelos Park and the local ma

ket. Near there one will nd the famous plant and ower Mark

It is a colorful place where peasants of the area sell hundreds exotic owers and it is visited a lot by the inhab

ants of the city to acquire vegetation to adorntheir gardens.

While employment capacities across the com-munity of Xochimilco suggest Commerce relat

jobs are a key sector, the table demonstrates well diversied employment base which cross

over a number of sectors.

The table below provides a comprehensive deof the educational background of the residentwithin Xochimilco. Approximately 106,000 resdents have a post secondary education. In tot

85,000 people have a primary/grade school lof education. In addition, a signicant numberlocal residents (80,000) maintain a high schootechnical education.


Age Group

Without post

primary


With

instruction

average

superior Not Sp


1 G ra d e 2 G ra de 3 G ra d e Not spec i f i ed 1 G ra de 2 G ra d e 3 G ra d e Not spec i f i ed

1 9 a n d u n d e r 1 5,66 3 7 ,7 3 4 7,69 0 1 2 ,0 5 8 2 3 1 0 9 5 1 1 4 ,5 7 6

2 0 - 29 1 1,76 0 1 ,4 7 9 2,73 7 1 8 ,4 8 7 3 1 9 2 2 3 5 3 3 6 ,6 9 3

3 0 - 39 1 4,03 2 9 6 1 2,02 4 1 3 ,3 7 2 1 1 1 3 2 9 6 7 2 7 ,9 4 2

4 0 - 49 1 5,03 2 5 1 3 1,10 2 6 ,7 8 2 3 2 9 6 9 2 7 1 9 1 6 ,5 8 7

5 0 - 59 1 2,34 3 2 7 1 55 2 3 ,1 0 4 1 2 2 8 5 2 9 3 8 7 ,5 5 2

6 0 a nd o ve r 1 6,65 4 1 7 9 35 2 1 ,5 4 3 3 1 7 4 0 1 6 7 9 3 ,5 9 1T o ta l 8 5,48 4 1 1 ,1 3 7 1 4,45 7 5 5 ,3 4 6 3 4 1 0 8 2 5 7 8 6 7 3 7 1 0 6 ,9 4 1


35/79

6.0 Amway ExpansionProgram Summary

Mexico City was delineated into ve distinct market areas. Key demographics and market segmentation

nalysis were used to determine the market potential of each zone.

Summarized below are the market zones, dominant market segments and potential choice zone(s) for Amway.

Zones and Trade Areas

Market Zone Score Card

To determine the optimal location for a new Amway store, a market zone score card was deployed. The Marketone score card lters geo-demographic variables with other market traits in order to identify which marketones are deemed more desirable and likely would present successful opportunities for the longer-term suc-

ess of Amway in the marketplace. There is no one single variable that could determine the ideal market andite selection.

Primary SEL Total Income Total PopulationA/B 1,070,190,115 563,967

C+ 953,056,848 1,175,678

C- 8,483,300 1,934,83

D+ 66,09,784 3,177,809

D- 175,00,40 1,951,378

E 347,053 13,856

Total 3,683,17,50 8,817,511


36/796


Creating a score card for each market zone leads to the prioritization of those communities into two distinct buckets:. Optimal

. Not Optimal

Market Zone Sequencing

Across all ve market zones, the above score card reveals that

ach zone within the Greater Mexico City marketplace possessesome of the desirable traits. When you take into account thentire picture and not just one or two measures in isolation, the

market zones would be delineated into two groups:

Optimal Zones

A) CentroB) NorthC) West

Not Optimal Zones

A) EastB) South

The map below indicates (with Amway logo), those zones/arewhich contain the highest concentration of C residents. The mclearly demonstrates that the East zone is largely D+ and D-.

The Centro zone (city core) is where the concentration of A/Bresidents are located. In addition, the Centro zone contains a

very high concentration of C residents which spills into the WSouth and North zones.

The West Zone shows a blending of all socio-economic grouwith the more afuent areas bordering the Centro zone. The

further out in the west zone toward the outer ring, the socio enomic levels drop off to the D+ and D- classications.

The North Zone contains one concentration of C residents, wthe majority of the zone is dominated by D+ residents.

The South zone does contain some C level communities whicare concentrated on the periphery of the Centro zone, howev

by large proportion the South Zone is characterized by D+ anD- residents.

Market Zone Target Segment Market Size(population - proximities)

Community Growth(residential, retail)

Tranportation Retail Centers

Centro A/B and C 2,002,226 Mature residential/upscale Full Subway access/bus/taxi Upscale retailMercado

North C and D+ 2,398,471 Growth on fringe beyond outer ring Subway access/bus MercadoRetail centers

South D+ and D-Some C

1,118,357 Growth on fringe beyond outer ring Subway access/bus Large retail focal nodesMercado

East D+ and D- 1,795,049 Growth on fringe of city Subway access/bus Mercado

West C with pockets of A/B

(fringe of Centro) and D+and D- toward outer ring

1,503,408 Limited growth Subway access/bus Mercado

Large Retail Shopping Cent


37/79



38/798

7.0 Amway Site Specic

Survey

ITE NAME:

ADDRESS:

MAP:

PHOTO(s):

nstructions: For each potential location, the broker is required to complete this survey.


39/79


Survey

Footprint Location Visibility Site Accessibility Adequate Parking

Free-standing Highway -way Yes

Strip Plaza Main Intersection 1-way No

Enclosed Mall Secondary Roads All Bad N/A

City Centre Limited to No StreetVisibility

LOCATION

Site Size

Footprint: Land Parcel:

SITE DESCRIPTION

Build Type

New Build Redevelopment

Public Transit Safe Community Desirable Retail

Strong Average Low Financial Difculty

Owner Financial Strength

Land Purchase BTS for Lease BTS to Own Building for Lease

Options Available

Retail Strip Retail Power Center Traditional Downtown

Industrial Ofce Residential

Current Zoning

MARKET ENVIRONMENT

LEASE DETAILS

Term Rental Rate Renewal Options Other


40/790

COMMENTS:


Survey


41/79

8.0NAI Global Network

8.1 Mexico City, Mexico Market Summary

Country PopulationArea (sq km)GDP (in US$)GDP Growth (%)GDP Per Capita (in US$)nation (%)

nterest Rate (Federal Funds Rate) (%)Unemployment (%)CurrencyExchange Rate (US$ and date)Exchange Rate (Euro and date)Market NameMarket City Population

108,700,891 (Dec 007 est.)1,97,550 sq km$939.3 billion (008 est.)6% (008 est.)$8,838 (008 est.)4.% (008)

3.7% (008 est.)Mexican peso (MXN)1.00 MXN = 0.097 USD (3/17/08)1.00 MXN = 0.0588 EUR (3/17/08)Mexico City17,844,89 (000 census)

About the Market

Mexico City, the capital of Mexico, islocated in the federal zone (D.F.), in Soucentral Mexico. With 3 million inhabitaMexico City is often seen as the rst sto

for foreign investors in the country. Withgrowing economy and investment gradrating, Mexico is increasingly viewed asstable environment for foreign investors

The worlds largest city hosts major

employers from various global sectors.

National rms include Grupo Modelo,Grupo Carso, Telmex, and Pemex. Autmotive rms with the largest employme

levels include GM, Ford, and DaimlerChrysler, while the nancial sector is ho

to Citibank and BBV Bancomer. CocaCola, Pepsi, Honeywell and 3M alsomaintain a large presence in the region


42/79


8.2 NAI Mexico City, Mexico Ofce Prole

NAI Mexico (Mexico City)Blvd. Agua Caliente No. 10611Centro Corporativo Centura, Suite 706TijuanaBaja California40Mexicowww.naimexico.com

Contact: Gary Swedback, NAI Business DirectorPhone: + (5) 664 971 0333 / + 1 619 690 309Email: [email protected]

Markets Serviced: Mexico City

About Us:

NAI Mexico is the largest full service commercial real estate rm in Mexico.

n Available facility/land inventory: Every city in Mexico (including projects not ofcially on the market)

n Needs assessment/strategic objectives: Plan with client management teamn Phase I Study: Multi-market or single city detail comparison re: labor/utilities/incentives/logistics/ operating

costs/real estaten Comparative lease analyses: Existing facility vs. build to suit constructionn Land purchase and utilities: Due diligence conrmationn Lease vs. purchase analysis: Total Cost of Occupancy comparisonn Contract negotiations: Negotiations with landlords/ownersn Web-based project management: 4/7 accountability tools for projects

Staff (#): 15

Key Clients:Alcatel SAFTAllergan PharmaceuticalBacou - DallozBose CorporationCampbell SoupCarrier CorporationConteyorDaimler Chrysler

Delta Electronics

Eaton CorporationEl Paso EnergyGilletteGraingerHughes Network SystemsJohnson ControlsInvensys - Teccor

Kyung-in Electronics

MedtronicMecaluxNewell RubbermaidOtis ElevatorPanasonicSamsungSanyo

Thomas & Betts

UPS - Global LoYork

Developer Clien

PrologisVerde RealtyGE Capital


43/79


8.3 Global Contact Info

For more information, contact:

David Berger

Managing Director

Latin America and the Caribbean

NAI Global

221 Brickell Avenue,

Suite 1100

Miami FL 33131

Phone +1 305 374 4017Mobile +1 786 556 7785

Email [email protected]


44/794

9.0Catchment Areas

9.1 City of Mexico Catchment Areas

Across Mexico City the ve major zones were delineated into much smaller levels of geography in order to i

tify those ideal communities which target the C socio- economic residents. On a more micro review of the cthere are some ,360 catchment markets that have been assigned a dominance of: A/B, C+, C-, D+, D- anlevels of socio-economic strata. The majority of the residents in Mexico City are concentrated in the amalgaated grouping of D with 1,154 local markets, followed by the amalgamated group of C with 977 markets. Tfollowing table breaks down by major zone the number of communities/catchment areas by socio-economlevel.


45/79

9.0Catchment Areas

9.2 Hot Spot Catchment Areas

To further rene the catchment area search a hot spot map was developed over the entire city which high-ghts only those C level catchment zones.


46/796

9.0Catchment Areas

9.3 Rank of Catchment Zones by Population

The following table provides the Top 0 C Catchment markets across the city from an original population baof some 977 C Catchment areas in the city. The top communities are ranked by largest population to smalle

It is interesting to note that across the Top 0 Catchment Markets 9 C Level Catchments are found in theCentro Zone, 4 in the West, 3 in the South, in both the East and North.


47/79

9.0Catchment Areas

9.4 Zones: Catchment Areas

9.4.1 North Catchments


48/798

9.0Catchment Areas

9.4.1 North Catchments


49/79

9.0Catchment Areas

9.4.2 Centro Catchments


50/790

9.0Catchment Areas

9.4.2 Centro Catchments


51/79

9.0Catchment Areas

9.4.3 West Catchments


52/79

9.0Catchment Areas

9.4.3 West Catchments


53/79

9.0Catchment Areas

9.4.4 East Catchments


54/794

9.0Catchment Areas

9.4.4 East Catchments


55/79

9.0Catchment Areas

9.4.5 South Catchments


56/796

9.0Catchment Areas

9.4.5 South Catchments


57/79

9.0Catchment Areas

9.5 Top Target Catchments

9.6 Catchment Summary

Zone # C Catchment

Markets

Total Population Comment

North 4 ,398,471 Contains a large number of C Catchment Markets and the high-est population of any zone, however, the geography is more widespread and as such the Cmarkets lack any single cluster.

South 9 1,118,357 This zone contains the lowest population capacity of any zone anthe second fewest C level catc

amway mexicocity market study0608

Documents