Are we "abroad" yet?

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Consumer trends in Latin America

Latin America is an exciting market. More consumers have disposable income and access to technology than ever before, creating an environment rich in opportunities for innovation and growth.

I spoke to Abel Delgado from US Media Consulting to hear what consumer trends are shaping this landscape.

Abel Delgado, US Media Consulting

Abel Delgado, US Media Consulting

…brands will have to work harder in certain areas, such as with content marketing, native advertising and sharper social media strategies, as well as be prepared to take advantage of Big Data and maximize new approaches such as programmatic buying of online ads.

 

1. What products are increasingly in demand in Latin America?

In the research we have reviewed, mobile devices have to be one of the products that Latin American consumers seem to be most excited about.

– In Mexico, according to IDC smartphone sales totaled 12.9 million units in 2012, then 20.4 million units in 2013 and are projected to reach 37 million in 2014.
– Tablet sales in Mexico were 4.3 million units in 2013 and are expected to reach 6.2 million in 2014.
– In Brazil more than 35 million smartphones were sold in 2013, a 123% growth versus 2012, while tablet sales in Brazil grew by 157% in 2013.
– In Peru, smartphone sales totaled 2.6 million in 2013 and are expected to reach 4.9 million in 2014.
– In 2013 Argentines bought more than 900,000 tablets, compared to 400,000 in 2012.

Beyond mobile devices we have cars, cosmetics, luxury goods and more:

Cars:

– Car sales went up by 8% in Peru in 2013 and are expected to go up another 12% in 2014
– Mexico’s car market grew by 7.7% in 2013
– New car sales increased by 12% in Chile
– Argentina’s new car registries went up by 13.5% in 2013

Cosmetics: In 2014, cosmetic sales may go up by as much as 20% in Brazil, 5% in Chile, 10% in Ecuador and 10-15% in Mexico.

Hotels: The Latin American hotel industry will increase its room supply by 65% over the next 10 years.

Luxury goods: In 2013, the luxury goods market went up by 15% in Argentina, by 12% in Brazil and by 14% in Chile. In Mexico, the luxury goods market grew by 29% between 2008 and 2013 and is projected to grow another 34% by 2018.

We’re also seeing growth in the pets market, TVs and toys. In Latin Link we’ve reported before about the growth of the Latin American middle class and this seems to be playing a factor in the growing demand for all of these products.

2.  How are consumers changing their shopping habits with new technologies? Have they changed the way they research and make purchases?

We have seen research that indicates that 45% of Brazilian consumers research appliances online before buying them offline. Similar percentages are reported for cars (45%) and real estate (44%). Data from Oh! Panel in 2011 indicated that 9 out of 10 Colombians researched cars online before buying them. A 2013 study from Ipsos found that 80% of Brazilian Internet users, 72% of Mexican Internet users and 68% of Argentine Internet users found out about new products via the Internet. The second medium for learning about new products was TV. While the universe of this research was Internet users, it’s interesting to see how the online world makes such an impact, especially when you consider that Internet use in Latin American markets is not as high as that in more mature markets.

3.  What is an exciting trend you are inspired about?

Photo credit: Gustavo Gomes

Photo credit: Gustavo Gomes

The rise of the middle class in Latin America is the trend that most heartens and inspires me. Beyond the obvious rise in the consumer base and purchasing power, it’s great to finally see millions of Latin Americans enjoy a better standard of living.

Another trend that inspires me is the enormous potential with Internet growth in Latin America. A more informed population with a massive information/communications resource at its fingertips will offer many more benefits than downsides. Of course, this means that brands will have to work harder in certain areas, such as with content marketing, native advertising and sharper social media strategies, as well as be prepared to take advantage of Big Data and maximize new approaches such as programmatic buying of online ads.

4.    What are the forms of payment that have been popular in the past or that are becoming more popular?

Credit cards are seeing increasing use in a variety of Latin American markets:

– 80% of Argentines and 76% of Brazilians use either credit or debit cards
– The average employed worker in Chile has 4.4 credit cards
– According to AMIPCI, 6 of every 10 people who shop online in Mexico do so with a credit card

This in turn is spiking e-commerce in Latin America. It makes sense, since online often can offer more product variety and better prices even when you add shipping costs. There is also something called a boleto bancário in use in Brazil and a similar payment form in Mexico. With these, you shop online and print a receipt for the product you order. Once you take this to your bank and the bank pays the e-commerce site, the order is processed. It’s a way of getting around online security concerns and an alternative for consumers who still don’t have a credit card.

5. Please share examples of companies that are expanding in Latin America and doing a great job engaging with consumers in the region.

 Netflix seems to be really making strides and is winning major amounts of customers through strong online marketing and content.
 Samsung seems to be gaining significant market share compared to other tech brands.
 In Brazil, Audi expects to grow its sales by 50% in 2014. It’s not ready to displace Fiat in terms of market share, but it certainly is making strides in Brazil.
Mary Kay is also growing hugely (by 75% in 2013) in Brazil, which is the #4 market in the world for this brand

 

Abel Delgado is the Marketing Manager for US Media Consulting, a media services firm specialized in helping agencies increase their efficiency and revenues through media planning, buying, innovation procurement and technology solutions. As part of his work for US Media Consulting Abel edits Latin Link, a blog focused on media, marketing and consumer trends in Latin America.

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This entry was posted on July 2, 2014 by in Consumer trends and tagged , , .

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