Cuba: A Time Such as Now…

Sep 10, 15 Cuba: A Time Such as Now…

Posted by in Latin America

By George L. San Jose   President & COO of The San Jose Network Ltd.     When I think of the U.S.-Cuban relationship I imagine two childhood best friends who once had a quarrel. They were neighbors, loved each other dearly, their lives where intertwined in the most intricate ways, and one could not imagine life without the other. They were always in each other’s homes and played in the same backyard. Then one day [about fifty-five years ago] they quarreled, pride got in the way, and they stopped talking with one another. They confiscated each other’s toys and each went to play in their own backyards with deep wounds in their hearts. Anyone who has children understands how these quarrels happen. And in the same way this very much happened to the United States and Cuba, although few of us are old enough to remember their happier times as “besties”. Let me state that I certainly would never want to simplify the layers of complexity of U.S.-Cuban relations as events in this troubled history resulted in thousands of innocent lives lost with much pain and suffering on both sides. It is, however, important that we, as business leaders, understand the depth of the past relationship only to draw from it the learning for what is to come. A historical step has been taken for a new relationship to emerge between these two great countries. Like Israel and Judah, East Germany and West Germany, reconciliation and full integration of its people as one family, and again as best friends, is irreversible and unstoppable—this time living in two houses. All that remains is to have in place a legal system of commerce between our two countries and in concurrence a commerce revolution within the Cuban government to set a transparent legal framework for commerce to emerge. This will be necessary not only for its own people but for the hundreds of small foreign businesses that want to invest in Cuba and are currently not able to do...

read more

Cuba and the U.S.: A Tale of Two Countries

Jul 21, 15 Cuba and the U.S.: A Tale of Two Countries

Posted by in Latin America

By George L. San Jose, president and chief operating officer of The San Jose Network. For the first time in over 50 years, the United States and Cuba are formally reestablishing diplomatic ties, leaving implications for American businesses seeking to expand their markets. The Cuban embassy in Washington, D.C. opened its doors on July 20, but what does that mean for companies looking to reach those 11 million consumers? The growing relationship between the U.S. and Cuba signals significant pending opportunities for American businesses. Beginning with the acceptance of American credit cards, cellular service, and now with embassies opening in both countries and the introduction of new travel regulations, we see only the first steps preempting the inevitable: the trade embargo will soon be lifted. The historical move could create 6,000 American jobs and add between $1.2 and $4.8 billion annually to the U.S. economy. As with any new opportunity, market knowledge, speed to market, and infrastructural/distribution understanding will decide success or failure in the pursuit of market share growth. Brands that start planning now will get the first chance to reach 11 million consumers. Before now, Cuba has never been targeted. In December, President Obama and Cuban President Raul Castro announced that they were working together to lift the trade restrictions. Over the past eight months, The San Jose Network has utilized external and internal resources to explore the potential of the Cuban market, encouraged by the preliminary findings and developmental changes occurring weekly. There is no doubt that Cuba poses a great opportunity across many industries, sectors and categories. Yet, we have to proceed with caution and move in parallel fashion with the legalization in commerce between our two countries. Even with the economic embargo still in place, the U.S. and Cuba have found their way around some trade restrictions. In fact, after the U.S. exported food to Cuba after a 2001 hurricane, the U.S. continued to export some food supplies to the island, and now the U.S. is Cuba’s second-largest food supplier. In 2008, annual food sales...

read more

Latin America: The China of 2020 and the Next Destination for International Retailers

Jul 29, 14 Latin America: The China of 2020 and the Next Destination for International Retailers

Posted by in Latin America

By George L. San Jose, President and Chief Creative Officer of The San Jose Group What is it about China that grabs the attention of international retailers? Is it the rapid economic growth? Or the incomprehensible size of the population? Maybe it’s because 20 years ago you could roll a basketball through Shanghai and not touch a thing; now skyscrapers are sprouting out of ground like it’s going through puberty. No matter how you look at it, China is on the economic pedestal of the planet…for now. In a constantly changing world, there’s another international market for retailers that’s on the rise, and it’s about to get the attention it fully deserves. Direct your attention to Latin America–the market that’s about to give China a run for its money. Literally. The success of international retailers in Latin America shouldn’t come as a surprise. The Global Retail Development Index ranked Brazil, Chile and Uruguay with the top three scores worldwide in 2013. Latin American counties happen to hold seven of the top 22 positions as well. Plain and simple, Latin America is proving an area that couldn’t be a more lucrative for marketers to invest in. It may have been flying under the radar, but with fast expansion and surprisingly low risk, Latin America should already be drawing your attention. So how did Latin America become such an attractive market? You can attribute much of the success to the rising middle class, which has grown to over 51% in 2011 from 41% in 2001 with no signs of stopping. The majority middle class has fueled a rise in per capita income and strength in the working force. As of 2010, the Latin American working class expanded to 280 million. Even better, the improved work force also includes a rise in female participation from 32% in 1990 to 53% in 2008. With Latin American women having increased financial independence and decision-making ability, consumer buying is growing. Retailers know a strong middle class means strong buying power,...

read more

Latin America: The China of 2020 and the Booming Healthcare Industry

Jun 06, 14 Latin America: The China of 2020 and the Booming Healthcare Industry

Posted by in Latin America

Employee healthcare requirements could impact American companies’ decisions to expand their business to the global market. Latin America is moving fast towards a healthcare system that resembles our own and will surely facilitate management of this critical aspect for U.S. companies that recognize the ample business opportunity to invest in Latin America. Throughout the last few decades, healthcare systems in Latin America have experienced activity and popularity surges among both international and domestic citizens. Affordable and accessible public-private healthcare initiatives and partnerships define a healthcare system model that efficiently serves a major market and is set to transcend all others in the near future. Latin American countries already exhibit relatively high rates of public participation in their respective healthcare systems. As an example, the institution of a particular family health plan in Brazil recently contributed to the expansion of healthcare participation to nearly 70% of the population. Similarly, recent reports show that Colombia and Chile both posted increased health care participation rates: 73% and 80% respectively, compared to the U.S.’s healthcare participation of roughly 83%. These high rates of both public and private health insurance participation are trends that will only increase with the rising Latin American middle class and with economic progress in the region. Latin America’s population growth accompanies increasing access to health professionals and facilities in many Latin American countries. In Brazil, Chile and Mexico, the number of medical schools and health facilities has grown quickly in the region over the last century. The ratio of doctors in Uruguay (3.65) and in Argentina (3.01) rose just above the ratio of doctors in OECD countries, such as Canada (2.14) and the United States (2.45) according to data from the WHO . Thus, the breath of medical resources as well as the reduced cost of health care services available in many Latin American countries presents points of investment for American companies everywhere. Clearly, this critical aspect of employee healthcare can be effectively managed within many Latin American countries and that the structure of...

read more

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...

read more

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...

read more