Latin America: The China of 2020 and its Growing Labor Force

Latin America is a notoriously progressive region. By 2020, it will represent 10% of the global population and a total market of 670 million consumers. However, what most don’t realize is that Latin America is home to a young population. Approximately 280 million young adults between the ages of 15 to 35, many of whom are part of the working population, reside in Latin America. Over the next decade, analysts project significant growth in the Latin American labor force. In 2010, the working population between the ages of 25 to 59 amounted to 255 million. By 2020, this population is expected to rise to 296 million while the United States labor force will only increase to an approximate 105 million from 103 million in 2010. Latin America’s growing young labor force possesses sizeable disposable income, raising consumer demand and spending. The growth has favorable implications on the region’s economy. The size of the young working population translates to a larger share of consumption by these groups. Similarly, the entrance of 100 million women (who are young), into the workforce by the end of 2012, signifies the financial independence and increased decision-making power over household consumption by the young generation. Latin America’s young population is not only growing in terms of size, but also in terms of annual total gross incomes. In Brazil, people between the ages of 30 and 39 accounted for 18.4% of the population with an annual gross income that is equivalent to over $150,001. Clearly, the young demographics expect to see further increases in their average gross income over the next ten years and a corresponding increase in leisure and consumption. Similarly, in Colombia, those in the 15 to 37 age bracket will see their gross income expand over the next decade along with an increased purchasing power. The emergence of a new generation of high-income, young adults will mean more spending in categories such as household items and family-related goods. Business interested in investing in the young, consumer-friendly Latin American...

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Latin America: The China of 2020 and its Growing Middle Class

May 13, 14 Latin America: The China of 2020 and its Growing Middle Class

Posted by in Latin America

Allow me to elaborate on the last post. According to a United Nations estimate, Latin America’s 21 countries will have about 670 million people by 2020, with some of its countries representing a .83% compounded annual population growth rate. As a point of reference, the figure would nearly double the North American population at that time, estimated to be 352 million people representing a .58% growth rate. China, on the other hand, would likely report a population compound growth rate of .55% (down from 1.31% in the ’90s), yet maintain a population size that will be more than twice that of either Latin America or North America. A finer analysis of the markets suggests that the largest segment of consumers in both markets–the middle class–would shift the attention from population size to buying power. While the Chinese middle class (estimated to be 630 million in the 2020s) currently has an annual disposable income of $4,000 per household, Latin American consumers eclipse this at $5,700. The region’s demographic, labor and spending characteristics (among others) allow me to predict that by 2020 Latin American consumers would resemble U.S. consumers during the middle class explosion of the 1960s. Like the enormous growth many of the most-respected American brands experienced at that time by tapping into the increasing needs of the surging classes, those who recognize the Latin American opportunity early may thrive in the coming decade and obtain greater return on investment than they would investing in other opportunities. A word of caution, leave your conquering helmets behind; there is a way to do business in Latin America, and it is different than ours. If you learn the intricacies, it works just as well as in the U.S. Stay tuned the next installment of our China 2020 series. Sources: Nygaard, D. World Population Projections, 2020. IFPRI.  Minority Language Policy and Practice in China: The Need for Multicultural Education. International Journal of Multicultural Education, 2009. CNN Money.  RTT News. Euromonitor International (Countries and Consumers) from national statistics. China...

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Latin America: The China of 2020, Sizing Up the Opportunity

Size does not really matter …well, sometimes. In terms of sheer size, China, with its 1.4 billion residents who speak 120 officially recognized languages, stands as the most populous country on Earth by far. However, they are not consumers of most of the products and services we buy and sell here in the U.S. Thus, for companies looking for the next market to expand to, Latin America shines as the new frontier of opportunity for market growth and expansion. Aside from the obvious logistical advantage due to its proximity, these 21 independent countries have more in common with themselves than the single country of China.  For starters, the infrastructure is already in place for getting products and most services to nearly all Latin American markets, consumers are easy to reach, communication materials need only be in Spanish and Portuguese and the numbers are there to substantiate the effort. The Latin American consumer base has grown to 170 million customers that purchase products and services as we do here in the U.S. Of utmost importance, this number is growing by double digits every year. Yes! 170 million strong and growing. At the current pace, there will be a total of 260 million consumers like us by 2020, out of a total population of about 670 million. So when we look for the future labor or consumer markets to come, our own back yard has the best upside potential yet. I do admit it could be challenging for the typical American company to try to set up a beach front in Latin America, but here again, if you know what you’re doing, it always tends to be easier; if you do not, it is always going to be harder.  Latin America stands to yield a much better opportunity for North American companies looking for a quick and very cost-efficient way to grow their sales, protect their global market share from European and Asian products that have already made great inroads and possibly even achieve brand leadership...

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