Customer needs and behaviour in Latin America
The GDP of the region is approximately US $ 9.5 trillion.
Meat and mining occupy a prominent place in the region. The industrial sector is divided into traditional and processing industries. They act in the production of raw material from the beneficiation of minerals or agricultural products, including those that produce consumer goods, such as traditional food and textile industries, although some countries have a more diversified industrial sector, ranging from the base to the latest technology - Brazil, Argentina and Mexico show these characteristics. It is worth mentioning that Brazil has such a diversified economy that it is one of the world's largest exporters of meat, iron and airplanes!
While the world economy1 will grow 3.5%, Latin America is expected to grow by 1.6% in 2017, according to ECLAC2, with Mexico growing by 2.1% and Brazil by 0.2%. Bolivia should be the country with the highest growth rate: 4%.
The region's average inflation will be around 10% in the year.
- If you are considering one country of this region to start investing, you must know that Brazil, Mexico and Argentina account for over two-thirds of the region's total output;
- Although there is a good contingent of rich people in Latin America, most are workers, who are looking for good products with good prices, sold on credit. To succeed with this audience you have to work with volume and efficiency.
- Decades of high inflation have strengthen the banking sector, which is one of the best of the world;
- Latin Americans are high users of internet, as a way of expanding their need for relationship in all its forms and possibilities;
- Franchising goes very well in this region, probably because Latin Americans avoid uncertainty (High UAI);
Internet, e-commerce and e-banking
The main categories of online purchases in Brazil are:
· 61% Clothing, Shoes & Accessories
· 57% Electronic equipment’s
· 48% Digital entertainment and education items, such as e-books, applications, digital music and movie files, etc.
Brasil7 represents about 40% of the 348 million internet users in Latin America and is the fifth largest digital market in the world.
Internet users in Brazil spent 38% more time online than the rest of Latin America. 76% of Brazilian adults have a payment card and purchases with credit cards grow twice as much as the card industry, accounting for more than 20% of credit card spending. This creates an ideal opportunity for international companies to enter this market.
Brazil is the second country with the highest usage of WhatsApp8, behind only South Africa - 76% of mobile subscribers in Brazil make regular use of WhatsApp, the most popular instant communicator in the country.
Currently, 45% of Latin American e-commerce sales originate in Brazil. The country is expected to generate $ 45 billion in sales of the region's $ 117 billion B2C business by the end of 2018.
More than 60% of the banking transactions carried out in Brazil in 2015 took place through digital platforms. Mobile banking grew 138% over the previous year.
Mobile banking transactions (mobile and tablet) already outperform operations using other customer service channels. Second, comes the internet banking. Self-service terminals accounted for 15% of transactions, followed by sales outlets in branches and bank branches (8%).
The IFA6 - International Franchise Association explain that the LA Region continues to be a wise choice for expansion for many international franchise concepts. European and Australian brands have recently discovered the benefits of doing business in Latin America and have experienced rapid growth within their respective systems. The franchise model has been well copied and adapted to local flavor making for successful launch of very interesting concepts within the region.
Short case study
For those customers who do not yet know this world, the sellers of these stores give a helping hand: between two diamonds that lay eyes would consider the same, hide microscopic details that are worth US $ 20,000 and another, $ 60,000. In addition to in-store help, Tiffany, for example, organizes lectures to enable its client to understand what they are buying: teaches the secrets of stoning and its results on the brilliance and sparkle of the diamond. His lectures take place at its headquarters in the city of São Paulo, as well as in Brasília, the capital of the country, or in Rio de Janeiro, each with 50 to 150 participants.
- Class A, from Affluent, wants to appear to be richer and more powerful than it really is. This is important in a high PDI country. Why?
- There is a very special kind of service offered to "class A" clients. This is also a heritage of high PDI culture. How can your product or service take advantage of this culture trait?
- The credit payment includes interest. How to make this financial transaction?
- You have certainly realized that you need to empower the consumer to properly appreciate and value a new product or service. How to do this in your case?