I still remember when, about seven years ago, the MD of a British nursery goods company told me at a trade show in London that he wouldn’t target Latin America because “they don’t have money there – after all, don’t they all live in favelas?”
Where do I start?
Let’s give you some figures, from a 2017 Nielsen report (and that wasn’t the best year for Latin America, imagine what these figures were like 5-10 years ago, when the region was booming…):
There are 68m people with a medium-high to high income in the region
21% of them maintain their lifestyles, despite the crises
52% of them are willing to pay premium prices for innovative products (world average is 44%)
These are the consumers, Nielsen emphasises, that pay for quality, safety standards, performance, organic/natural ingredients, environmentally-friendly and socially-responsible products. I couldn’t agree more with them: treating all Latin American consumers the same just won’t cut it. Understanding what your market really is can make you stand out of your competitors (and remember you are competing with the whole world here). As I always say, your market might be a neighbourhood of Santiago or Sao Paulo, so there’s no point of thinking at regional or even national level.
I sometimes share these few comments with clients, colleagues and friends in the UK and they are shocked:
– Did you know that many Latin Americans go on shopping trips to the US or Europe, some of them even regularly? And I’m not just talking about millionaires (or billionaires, we have plenty of them here)
– Did you know that it is common for middle-class families to have some sort of support at home, say, from a nanny and/or maid? Some even live-in…
– Did you know that the latest gadget, perfume or watch can cost, due to taxes, nearly double in Brazil than in, say, the US, and people will still buy them?
– If you fly over cities like Sao Paulo, have you checked out how many homes have private helipads? And if you fly over Santiago, have you counted the number of homes with swimming pools in certain neighbourhoods?
And always remember that while some people can afford luxury in our region, many more aspire to it. Can you also target that market?
There’s certainly plenty of opportunities in Latin America. You just need to look beyond the headlines and be ready to invest in understanding who you are selling to and how.