Is Latin America the new China?
Which region will provide growth for your business in 2011?
Paul Gunning, the Chief Executive Officer at Tribal DDB, recently told me, “Latin America is another China” because it has “millions of consumers with rising purchasing power.” A number of recent articles support that claim:
This article from Forbes – Forget China, Look To Latin America – highlights that, “with inflation a concern in the Far East, commodity and consumer-driven economies like Brazil and Chile may be 2011’s biggest winners.” It goes on to say that, “A research report from Bank of America-Merrill Lynch suggests that accelerating capital inflows, stronger domestic demand and minor risk of inflation mean Latin America could move to the fore in 2011.”
The Latinobarómetro Poll from The Economist shows the resilience of the region during the economic crisis and how it has shown a robust recovery and a sunnier mood. In summary, “support for democracy in Latin America continues to edge up, as does backing for private enterprise. Crime has become a bigger worry than unemployment. And Brazil is seen as more influential than the United States across much of the region.”
And this article form Inc Magazine – How to Support Global Online Sales – shows that Latin America’s e-commerce industry will grow the most quickly relative to other regions around the world: 204% forecasted growth compared to 98% growth in the U.S. and Canada.
In the marketing and advertising world, Latin America also shows great promise ahead. Joe Crump of Razorfish outlines the growth opportunities in digital media in Latin America’s top three markets (Brazil, Mexico, and Argentina) in this presentation on SlideShare.
He discusses seven key trends for reaching the “new digital middle class” in Latin America, also known as “Clase C.”
1) The new digital class has unique digital habits
2) The new digital middle class is comprised of six key segments (digit-native, e-nthusiasts, climbers, e-advantagers, hard workers, strugglers)
3) The new digital middle class spends their money
4) The Internet is school for the new digital middle class
5) The new digital middle class uses digital for three main activities (discovery, growth, and transformation)
6) The new digital middle class is using mobile in fundamentally different ways.
7) Women are the CTO, CFO, and early adopters of the new digital middle class household
Thank you to Elena Scott for forwarding the presentation on to me.
And here’s the summary of the study from the press release:
Late last year, Razorfish announced the publication of Stampede, a study that sheds light on a powerful consumer block that many companies are just now starting to notice: the Latin American lower middle class know as ‘Classe C.’ This growing population group which Razorfish dubbed “The Digital Middle Class,” because of their heavy reliance on digital technologies, is fueling the explosive growth of Latin America. Although this consumer group represents about 100 millions resident In Brazil alone, they are still vastly misunderstood by many companies. Stampede helps marketers better understand these consumers and clears up widespread misconceptions, such as:
• Contrary to popular belief, Classe C puts digital at the center of their lives. For them, digital provides opportunities to equalize the social and economic playing field in highly class-stratified societies. Some smart marketers like Samsung have already caught on to their sophisticated tastes in digital and are aggressively promoting mobile devices to them while less enlightened marketers assume wrongly that Classe C is a television culture.
• Marketing to women is the key to succeeding with the new digital middle class, which is going to surprise many who assume a patriarchal Latin American society. Women are the main purchasers of new digital middle class homes and the chief decision makers. Whether you are a mobile phone provider or a financial services provider, finding ways to appeal to women is essential to building a relationship with the new digital middle class.
It is clear that this consumer group is going to be influencing marketers from around the world for the foreseeable future. And we believe our study is going to be an important landmark for the many global marketers.