As the uncertainty of President Trump’s global tariffs continue, more brands are considering near-shoring parts of their manufacturing and distribution to Mexico.
“Mexico is a great place to look [for manufacturers now],” said Elle Shelley Black, CEO and co-founder of Made Technologies, a California-based manufacturing, inventory management and financing platform that makes products for brands that sell through Sephora, Ulta Beauty, Credo Beauty and Whole Foods. “Typically in Mexico, the manufacturing technologies are about 10 years behind [China], but that’s still good enough for everything happening [in beauty] today.”
Mexico was the 22nd largest exporter of beauty, cosmetics and skin care in 2023, according to global trade data base Tendata. The country exported around $450 million worth of products, just ahead of Sweden, Taiwan and Turkey.
France, South Korea and the U.S. topped the list with $12 billion, $7.2 billion and $6.2 billion, respectively, while mainland China ranked 6th with $3.8 billion in beauty exports that year.
“[China pricing is] comparable [to Mexico], especially because you get cost savings in the timing and pricing of shipping,” Black said. “Plus, if you’re a brand that believes consumers will pay more for sustainable products, [it’s a strength] because you don’t have to put things on the water [to ship them across an ocean].”
Black told Glossy that Mexican manufacturers have comparable access to raw materials, components and packaging, as well. However, some experts wonder if brands are just trading one tariff for another.
Compared to China’s current 145% tariff, Mexico’s 25% tariff imposed in February seems minimal, but it’s still a massive jump from the free trade agreement President Trump implemented in 2020 with 0% tariffs on Mexico and Canada. It’s unclear where these tariffs will ultimately land and how long that will last.
“I have a feeling that a lot of [U.S.] brands are talking about Mexico right now because it’s close and currently has a positive, yet frayed, relationship with the US,” said Nick Benson, founder of beauty manufacturing platform Atelier. “The big questions I would be asking are, ‘Do we have a favorable deal right now? How long is that going to last? And is that reliable?”
Despite the uncertainty, on May 2, Unilever announced it would invest $1.5 billion in Mexico to increase its production capabilities in the next three years. This includes a $407 million investment in a beauty and personal care facility in the Northern state of Nuevo Leon that will create around 1,200 jobs. The facility will primarily make products for brands like Dove, Nexxus and Sedal for export to the United States and Canada, according to Mexico News Daily.
Unilever sells beauty, wellness, home and food products into 190 countries and generated nearly $81 billion in 2024.
The formal announcement was made earlier this month during a press conference held by Mexican President Claudia Sheinbaum. The growth of the manufacturing sector is part of her “Plan Mexico” campaign to grow the economy. So far this year, Walmart, Netflix and Lego have announced investments of $6 billion, $1 billion and $508 million, respectively, in business infrastructure in Mexico, including manufacturing and distribution.
Many of the industry’s top conglomerates have stakes in the region. L’Oréal opened its largest hair color factory in Mexico in 2020, a $100 million investment, while P&G expanded its manufacturing footprint the same year with an expansion of its health and wellbeing factories that produce over-the-counter drugs and supplements.
At least one of Unilever’s new facilities will be on the outskirts of Monterrey, a manufacturing hub anchored by private research university Technological Institute of Monterrey.
“The Monterrey region [in Northern Mexico] is a really developed beauty manufacturing region, but [right now], most Mexican beauty manufacturers are producing products for [domestic sale in] Mexico,” said Benson.
According to market research company Mordor Intelligence, Mexico’s beauty and personal care market size is valued at around $12.03 billion this year. It’s expected to reach $16.13 billion by 2030, thanks to a compound annual growth rate of 6.05%.
Today, many Mexican manufacturers are aiming to reach U.S. brands hoping to near-shore during this time of global change.
“We can be very competitive in price [to China] with a very high standard of quality,” Andres Campos Chevallier, CEO of Mexican conglomerate BeFra, told Glossy. “We already have our whole supply chain very well polished and a lot of leverage with ingredient suppliers.”
BeFra is the parent company to Jafra, a vertically integrated beauty and personal care manufacturer that operates through independent sellers in the Mexico and U.S. markets. The company has been around since the 1950s. In 2003, Avon tried to purchase Jafra before the deal fell apart, according to B2B publication Happi.
BeFra acquired Jafra in 2022. After two years of planning, the company plans to announce its new contract manufacturing arm this quarter. Currently, Jafra makes 95% of its products in several facilities it owns in the central Mexican city of Querétaro.
Chevallier told Glossy that Jafra is currently Mexico’s top fragrance manufacturer and it’s hoping to bring on international fragrance, body care and skin-care brands now. Most of its Jafra-branded perfumes sell for $40-$60.
“One of the big challenges in Mexico is manufacturers are not willing to invest in new products if there is a risk, which is something they do very well in China,” said Chevallier.
He told Glossy that Mexican manufacturers often avoid the financial risk of new product development without the backing of a brand. To grow, the Mexican market needs more distributors to connect brands with factories, he said, which was a common practice that helped China’s sector to grow.
“In China they say, ‘I’ll take a risk [to develop something] and maybe I’ll have some losses, but in the midterm and long term, it’ll be good for my business,’” Chevallier said. He hopes BeFre’s new infrastructure will be a foil to this trend: Chevallier told Glossy that he’s consistently investing in its in-house R&D team and hopes to not only manufacture for international brands soon, but also develop new products to scale.
According to the Wall Street Journal, Chinese manufacturers poured $12.3 billion into Mexico manufacturing infrastructure from 2018-2024. Their bet is on a renewed North American free, or low-tariff, trading block, but it is unclear where this will land amid a quickly changing landscape of the Trump administration.
Experts like Jason Wong warn that brands could simply be trading one tariff for another. “Going through Mexico was a loophole that doesn’t work as well anymore because [now] there’s a tariff rate on Mexico and Canada,” said Wong, a former beauty exec, founder of Doe Lashes, and current co-founder of end-to-end sourcing and logistics firm Saucy.
Wong told Glossy that timelines from Mexico tend to be longer, compared to those from China, although companies will find relief in labor and shipping costs. He warned brands against obfuscating through border crossings, which he’s seen grow in popularity. “[Some brands] will ship [goods] to Mexico and they’ll truck it over to San Diego, then ship it through the San Diego warehouses,” he said. “But if you get audited, you have to pay a penalty on that.”
For the brands that do invest in Mexico, there are both regional and cultural considerations. Navigating Mexican cartels is one issue, Benson told Glossy. Timelines are another, Black said.
“China knows how to return an ROQ. They know how to do the sampling process. They work six days a week and they’re going to get [the order done on time],” Black said. “Don’t expect that same efficiency when going to Mexico — it’s closer to an American style, where they work five days a week and things take a little bit longer.”
