Is there a market for British luxury consumer goods in Latin America?
We have recently been approached by two very different British manufacturers of luxury consumer goods wondering if there is a market for their high-end products in Latin America.
Clearly, the answer will depend on the actual good and on the actual regional market – but also on the expectations of the business in question in terms of why a luxury brand would want to expand into South America.
Some reasons include:
- Latin America is going through an economic boom that has resulted in an increased purchasing power for many – and therefore the wish to differentiate themselves through consumer choice
- Latin America is the most unequal continent in terms of distribution of wealth – although vast amounts of the population lives in poverty, there is a small yet extremely discerning and powerful set of consumers that can and is willing to pay British prices
- it is very timely for British consumer brands to push themselves as authentically or quintesentially British (think Royal Wedding, Olympics and more) – British brands should capitalise on this and on the affinity that most Latin Americans have for Britain (yes, even the Argentineans!)
- the devaluation of the £ makes it more competitive even for luxury goods to penetrate other markets
- the domestic recession in Britain is an incentive to seek other (growing) markets
- global presence – for some British companies, the move to Latin America is not just about the profit they can make in the region but about establishing a global presence and being seen as truly international
That is why so many British luxury brands are present in Latin America, such as Thomas Pink, Hackett London and Burberry, to name a few. Patio Bullrich, for example, a luxury shopping centre in Buenos Aires, has luxury stores including Carolina Herrera, Cacharel, Christian Lacroix, Ermenegildo Zegna, Hugo Boss, Kenzo, Lacoste, Maxmara, Salvatorre Ferragamo and more. Bang and Olufsen are present in many Latin American countries including Colombia, Uruguay, Brazil, Chile and Argentina. Punta del Este (think St Tropez in Uruguay – and even more exclusive!) – boasts stores such as Tommy Hilfiger, Louis Vuitton and Ralph Lauren.
Many wealthy Latin Americans will import luxury goods themselves or buy them on trips to Europe and the US – so a carefully thought-out regional presence has the potential to address this existing demand. The purchasing power is there (strong even if small in absolute terms – just like you would expect for a luxury product or service) – and so is the willingness to embrace British luxury brands. Why not take the next step?
If you would like to discuss expanding into Latin America – whether selling from the UK or having a presence in the continent – please contact Gabriela at firstname.lastname@example.org
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