We have recently been approached by UK companies in the dental industry wanting to do business in Latin America, so the purpose of this post is to scope this industry very briefly to get these companies inspired to look at opportunities further within the region.
Let’s look at some stats first…
“The Latin America Dental consumables market is valued at $1.48 USD billion for the year 2015 and is poised to reach $1.73 USD billion by the end of 2020 at a CAGR of 3.14%.” (source)
“The Latin American Orthodontic Supplies market was worth approximately USD 245.0 Million in 2015 and it is expected to grow at 5.5% CAGR until 2020, reaching USD 320.2 Million in value.” (source)
Why this grow, then?
A study from 2015 highlights that “the main reasons propelling this growth are: an increase in the number of patients with malocclusions, a relatively cheaper cost of treatments in Latin America, a high number of orthodontic associations, a decrease in trade barriers regarding medical devices, and an increase in disposable incomes. Other important factors are: the growth in medical tourism, increasing adoption of orthodontic treatment, and improving socioeconomic status”
Let’s look briefly at some countries…
(you’ll find more information on individual countries more generic situation through this blog)
In my opinion, some of the most attractive markets in the region are Colombia and Chile, which combine a growing dental industry with ease of market entry and free trade agreements. Brazil remains interesting because of its sheer volume, but barriers to entry can be high and the same applies, at a lower scale, with Argentina. I would encourage you to look at smaller markets with high purchasing power and very little local competition, like Uruguay and Costa Rica, too.
“The market in Brazil is predominately composed of local dental companies offering value-priced products, with a great deal of tariffs and expenses that prevent international competitors from penetrating the market. International corporations are even more restricted in Argentina, where the economic conditions are especially troublesome. Due to poor income standards, the bulk of the population in Argentina does not have the financial means for an expensive dental procedure.” (source)
“Chile’s dental devices market is currently estimated to be worth USD 0.045 billion for the year 2014 and is expected to grow at a CAGR of 6.63% for the duration 2016-2021.” (source)
From the US government export service:
“Colombia was the 25th largest market for U.S. medical equipment exports in 2016, with annual exports valued at USD 318 million. The Colombian medical device market relies on imports, which make up about 86.5 percent of the market. Since the implementation of the U.S.-Colombia Trade Promotion Agreement (TPA) with the United States in 2012, 96 percent of U.S. medical equipment exports to Colombia receive duty free treatment.
A slowing economy and devaluation of the Colombian Peso over the past several years has had a negative effect on imports of medical devices and will constrain market growth during 2017.” (source)
A recent article from national business paper El Dinero highlighted that dental clinics have experienced an exponential growth as they work independently from the country’s health system, earning around GBP 25m per year in revenues (2015). The article mentions Jasban, Sonríe and Dentisalud as the largest chains. Dentisalud, we learn, employs 600 people. Apparently, Colombian chains are looking at Peru and Mexico for expansion, while Spanish chains are also arriving in Colombia.
Where should you start?
If you are looking into Latin America, I recommend my ebook to cover the basics (we have given the British Dental Industry Association a complimentary copy) as well as our blog – you might also enjoy my top 10 tips for doing business in Latin America published by Open to Export.
If you’re coming over to Latin America I’d recommend that in order to maximise your RoI, you do some serious market research first (to gain knowledge but to also ask the right questions, and to show people you meet here that you really mean business) and that you maybe start looking at potential distributors before you come over, because you might want to meet them face to face here (rather that get the contact on your visit and never hear back from them, Latin Americans aren’t always good with emails!).
How can we help?
We are used to working with manufacturers of very niche products in niche sectors. We offer support understanding Latin America and finding the right contacts to do business in the region. We can help UK companies rank national markets and definite market entry strategies, and we also do bespoke market research reports (that can include, for example, interviews with dentists, dental associations, importers, etc), as well as recruit distributors for our clients in different countries. We also organise market visits and trade missions. The potential is there, the “how” matters and it’s important for British companies in this sector to be well-informed, well-prepared and well-connected, in order to compete effectively within this challenging but promising region.