Business your connection to The Boston Globe

Retailers take down borders for immigrant shoppers

LOS ANGELES -- Odilon Hernández recently bought a television for his parents in Puebla, Mexico. But he didn't intend to ship it, or even load it in his car, for his next trip across the border.

Instead, he took advantage of one of the growing number of US retailers that sell products to immigrants here then deliver the items to relatives back home.

For Mother's Day, Hernandez bought a refrigerator and stove at the same La Curaçao store where he shopped for the television. Both kitchen appliances were delivered to his parents' house from well-stocked warehouses in Mexico.

''This service is great," said Hernández, who has worked as a janitor since moving with his wife to Los Angeles five years ago.

Immigrants have long sent money to relatives back home through wire-transfer services. But as the remittance market explodes -- Latin American and Caribbean immigrants in the US sent an estimated $40 billion home in 2005 -- stores and financial institutions are rushing to create new services to capitalize even more. The result is a plethora of options for immigrants looking to spend money on goods and services.

Immigrants can now send everything from flowers to dining room sets. Many stores give them credit, even if they are in the United States illegally. They can even finance a house in their native country and make payments here.

Companies such as Los Angeles-based La Curaçao determine credit eligibility for illegal immigrants based on how long they have been in the United States.

They also use statements from relatives or employers about their financial situation, copies of bills paid consistently, and other data.

''We are basically financing people who often don't have a Social Security number or legal residence," said Mauricio Fux, La Curacao vice president for corporate development. ''With billions of dollars going home to Mexico, we always ask ourselves, 'What can we do that is different?' to capture some of it."

Fux said competition to sell products has increased so much that La Curaçao now guarantees delivery to almost any location in countries where the chain operates. That sometimes means using donkeys, small boats, or other unconventional methods to make deliveries, he said.

Many of the firms involved are American-owned, and the purchases are akin to US citizens using a catalog or the Internet to order products abroad.

Dozens of US and Mexico-based companies -- from chain-store retailers to mom-and-pop operations -- offer their products and services through distribution deals with companies in Latin America. Relatives on the receiving end don't have to deal with customs or import taxes.

The heaviest demand for the retail products comes from Mexico, Guatemala, Nicaragua, and El Salvador.

There are no statistics on immigrant spending on goods and services sent to home countries. But it could be as much as $10 billion a year on top of cash remittance, said Donald Terry, fund manager for the Inter-American Development Bank.

The scale is so large that the bank has identified money for goods and services, along with traditional remittances, as tools for development in Latin America, especially to build houses.

''People move north by the millions, and the money moves south by the billions," Terry said. ''The key is harnessing the money for productive activity" like property investments.

Construmex, a US-based unit of Mexican cement giant Cemex, helps Mexican immigrants find materials and contract with firms back home to have homes built. Construmex also provides financing to buy existing houses.

The program began five years ago in Los Angeles and has since expanded to major cities around the country. It's become popular with Mexican immigrants because it guarantees the money they earn goes toward something concrete.

''Many people come here thinking they'll save money to build a house," said Luís Enrique Martínez, Construmex's US general manager.

''But often," he added, ''money sent home isn't used for that, and they return with nothing."

Today (free)
Yesterday (free)
Past 30 days
Last 12 months
 Advanced search / Historic Archives