Danish Kapoor
Danish Kapoor

What is Mexico’s gray market and why is it being a problem when buying a new phone

Buying a new phone in Mexico is being an odyssey. Suddenly, hundreds of users have seen how their newly purchased devices were blocked for no apparent reason. The explanation is that these terminals had been acquired on the gray market.

We explain to you what is the gray market of Mexicohow to detect if our terminal has been purchased there or is approved and what effects it has.

How telephone approval works in Mexico

Gray market is understood as the trade of devices that is generally done from unofficial stores. Instead of being approved phones in Mexico, they are usually imported devices that have not been reviewed by official safety regulations and distribution in the country.

It does not mean that they are different mobile phones than the approved ones. The Samsung, Motorola or Xiaomi that is sold on the gray market may be exactly the same model as the approved one, but it has not been reviewed to ensure that it is fully compatible with Mexican networks or that it is in Spanish.

The Federal Consumer Protection Agency (PROFECO) is the organization in charge of regulating and selling devices in Mexico. The Official Mexican Standard (NOM) They are the rules that guarantee that a product is safe and that its suitability for the Mexican market has been verified.

NOM is also the seal that a product is approved and does not belong to the gray market. As our colleagues from TechGIndia México point out, we can find it in the device box, along with other certifications such as China Export or European Conformity. If the NOM logo appears, then we can rest assured that it is a product approved for Mexico.


Image: TechGIndia Mexico

For many years now, mobile processors have supported multiple bands. This implies that the majority of Chinese mobile phones are compatible with networks from practically the entire world. This has led to a boom in the gray market, because these imported terminals have fewer and fewer differences with the approved ones.

According to data from Samsung Mexico, there are months in which its share of smartphones sold through the gray market amounts to 20%.

The advantage is that buying on the gray market is generally cheaper. The negative part is that incompatibilities may arise, such as at the connectivity level or with a charger that is not suitable for the current.

However, it must be taken into account that not everything is about the characteristics themselves. Buying a terminal on the gray market implies that we will not have the manufacturer’s official warranty and support. If you have a problem, the brand may not be responsible as it was not purchased through official channels.

Gray market mobiles are sold through multiple stores. From Amazon to Claro, passing through Mercado Libre or Liverpool. The latter explained to TechGIndia México that “actions were taken to prevent the sale of gray equipment in its marketplace, to give buyers certainty about the products they purchase.”

And the blocking of smartphones arrived

Manufacturers are the first interested in avoiding the gray market. This way they ensure that their mobile phones comply with all regulations. The problem began in 2022, when ZTE began blocking its devices purchased on the gray market.

The users suddenly they received a notification where it was warned that “this equipment does not work correctly because it was not designed for Mexican networks.”

It was not the only manufacturer. Months later, in July 2023, Motorola also began to warn that these terminals did not comply with the NOM and began to block them. A block that was not retroactive, but applicable from smartphones purchased on the gray market after July 27.

On October 11 it was Samsung’s turn. The company began sending alerts that the “phone does not comply with regulations”, offering, like other brands, a 30% discount to purchase an official device.

On October 18, Xiaomi did the same. The message was the following:

“Attention. Your device may not be the official version in your region. This may affect functions of your device such as connection to the telephone operator’s network contracted by you. It is recommended that you contact your dealer for help.”

Gray Market
Gray Market

Image: TechGIndia Mexico

Although it was the manufacturers themselves who activated the blocking, if these terminals have been purchased through an authorized distributor, it is possible to force the seller to provide the guarantee, according to Profeco.

Profeco asks to lift the blockades

After several weeks without a clear positioning by Profeco and the Federal Telecommunications Institute (IFT), an official statement was issued on October 19.

According to regulation NOM-184-SFCI-2018: “The telecommunications Terminal Equipment necessary for the use of Telecommunications Services can be freely chosen by Consumers.” That is to say, Users’ freedom of purchase prevails.

Profeco’s request is clear: Manufacturers must immediately lift cell phone blocks. Although these devices do not have approval and may affect the quality of service, consumer rights prevail.

It didn’t take long for manufacturers to react. Motorola has reactivated the irregular devices. OPPO has also stopped its plans to block devices following Profeco’s recommendation. And Samsung.

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The most difficult thing: pending the new legislation

The statement from Profeco and the IFT ends by recognizing that “appropriate measures and actions are needed to contribute to address the regulatory, commercial and legal challenges that the “gray market” brings with it. At the moment the current Mexican regulation does not make the gray market illegal.

As its name indicates, it is located in a rather undefined area. They do not have a warranty policy according to the Federal Consumer Protection Law but they are not illegal. We will have to wait to see if Profeco takes the initiative to modify the regulation or simply lets time pass, warning of its dangers but admitting that manufacturers cannot block user terminals.

Image | Justine Camacho

Danish Kapoor