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

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

Practically every time I discuss the future of global business opportunities, specifically when it comes to new emerging international markets, China always finds its way into the conversation. It does not matter whether the conversation is with a potential client looking for new growth or a fellow international veteran currently exploring how to do business in China or on the brink of initiating his/her expansion in the region. In any case, they feel that they have missed out on the benefits that a market of this size can yield in terms of global revenue and market share growth. All politics and bureaucracy aside, there seems to be three main categories that U.S. companies fall into: (1) Those who got an early start, did it right and are now enjoying the fruit of their pioneering spirit; (2) Those that missed the earlier opportunities or did it “their way” and are still struggling to figure it out; (3) And those that are just now looking into the Chinese market. Simply put, everyone is talking about it. The Chinese economy has eclipsed the U.S. and European markets consistently over the past ten years. So of course it is a very hot international topic…but that was then. Consider this: the Chinese economy is currently stagnant, the U.S. has flat lined and Europe is in total disarray. There is a new yet not-so-new player in the arena, and if you are looking for the next emerging market opportunity, the next middle class boom (as we had in the U.S. in the ‘60s), this series of articles in my upcoming posts will explain why I believe the emerging double digit growth economies and middle class populations of Latin America will be the China of 2020. Stay tuned for our Latin America: The China of 2020...

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Time to Strike the Latin American Insurance Boom

Nov 13, 12 Time to Strike the Latin American Insurance Boom

Posted by in Insurance, Latin America

Insurance stands amid the numerous thriving industries in Latin America—and not just that kidnap ransom kind, but every kind of insurance. Liberty Mutual began Latin American insurance efforts in 1995, and Latin American countries have an opportunity for more competitors. 1  The Latin American insurance market can be broken down into two basics categories: life and non-life insurance.  Non-life insurance, which covers almost all aspects of the insurance policies holders’ lives—i.e. automobile, health, personal accident, etc. – is on the rise in Latin America. According to the Center for Puerto Rican Studies at CUNY, non-life insurance is growing fast due to an increase in registered vehicles and workers compensation in various Latin American countries.2 Lack of knowledge of the Latin American market and questioning how long the boom will last presents an unnecessary deterrent for insurance companies who may investigate venturing into the Latin American market. In reality, the increase in non-life insurance in recent years highlights Latin America is changing, arguable for the better, and now is the time for Insurance companies to consider building business in these countries. Florian Kummer said in an interview with BestDay audio, “lines like liability [open up] as societies mature and as societies become much more middle class than before.”3 Latin American companies and their populations are, as Kummer says, “maturing” in a manner that requires more insurance policies. Frost and Sullivan report “the future consumer marker of Latin America is projected to be 665 million people with a combined GDP of $6.8 trillion in 2020.”4 In other words, the insurance market will continue to grow in Latin America as more and more middle class members arise and purchase cars, homes, and other goods which must be insured. Frost and Sullivan also assert “[the middle class] will account for around 43% of the region’s total population by 2020; consequently, the expenditure from this segment is also expected to increase by 51% in 2020.”4 Therefore, Latin America has developed a huge, and lasting, need for insurance companies. “Like...

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Hispanics: Social Media Socialites

Remember your old MySpace friend, Tom? Well, even he’s ditched MySpace for bigger and better social networks. In a digital world full of social networks, only one stands as the social network of choice worldwide: Facebook. Eighty-one percent of American adults age 18 and up have Facebook accounts, and over half of them check/update their account daily.1 Twitter, the second most popular social network, is used by 62% of adults. Social networking influences several aspects of our lives including consumer behavior, so marketers must understand and utilize these trends to engage consumers and maximize market profitability. What makes Facebook a “Must”? Size matters—after all, the ability to connect with anybody relevant is the point of the “network.” The more users, the larger the network potential. Unlimited word count—while average Joes, to critics and even celebrities applaud Twitter’s micro blogging platform, sometimes it takes more than 140 characters to spit out everything you need to say; and since splitting up/continuing tweets can be a risky and annoying endeavor, people turn to Facebook, where concise is out and keeping their extraneous details is in. Photo share—yes, other social networks allow photo sharing, but none of them are as elaborate and popular as Facebook. Apps such as Pinterest and Instagram—games and other applications attract wide ranges of people to Facebook. These apps conviently share your pins, photos or even game scores on your timeline. Keeping in touch—while almost all social networks bring people together, none is more personal than Facebook. And when people want to stay updated with information from friends and family around the world, Facebook serves as a great way to connect. While Facebook dominates the social network preference, Hispanics rule total social network usage. Aside from Facebook, of which Hispanics are just one percentage point below the general market average, Hispanics over index on usage of every other social networking platform.1 This fact illustrates Hispanics are ahead of the game in terms of social networks. Additionally, they are open to testing out new networks....

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The Revolution of Social Media

By Nicole Hernandez, social media specialist, at The San Jose Group “We don’t have a choice on whether we DO social media, the question is how well we DO it.” – Erik Qualman According to Edison Research, last year, 68% of Americans using social networks said that none of those networks had influence on their buying decisions. This year, only 36% said that there was no influence. In just one year, the influence that social networks have had on consumers has changed drastically and it is evident that social media should serve as an essential platform for marketers – in fact, 93% of marketers use social media for business. People will always talk about your brand so it’s important to take note and listen to what they are saying. Just think, since 90% of consumers trust peer recommendations, it is vital for marketers to become a part of that influence. Being aware of which social platforms consumers are using to discuss your brand is a key factor in determining where you should be listening and engaging in dialogue. Take two minutes to watch the phenomenal video about social media below; we assure you won’t regret it. Now, if you’re still not using social media for marketing purposes, what are you waiting for? Become part of the revolution today. Sources: Socialnomics:...

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Painful Advertising Mistakes – #6

We continue our blog on Painful Advertising Mistakes when launching a campaign to a multicultural market. Rule: Realize transculturation is an obstacle worldwide and must be considered in your marketing campaigns. Breast Milk Baby These cultural nuances are not simply a one way street, and cultural misunderstandings in marketing are pretty much universal. We do see cases of Spanish ads gone wrong when transculturating from Spanish to English, i.e. from Spain to the United States. Last year Berjuan, a Spanish Toy Company, released their marketing campaign “Bebé Glotón” or “Breast Milk Baby,” a breast feeding baby doll for little girls. Although the toy proved popular in Europe, American consumers were, to put it lightly, less enthused. While the doll is on toy store shelves in the United States today, a lot of parents and critics feel this toy is not suited for young children. “Cultural misunderstandings in marketing can be universal when companies ignore the culture of their consumer market no matter the language.  Companies must be aware of who their target audience is and the social norms of that audience,” according to George L. San Jose, president and chief creative officer of The San Jose Group. Moral of the Story: Advertisers need to be aware of the target market and the social norms of that audience’s society and/or acceptable practices.  This will ensure if a product/ad is going to resonate with that audience and be culturally relevant, i.e. in the USA breast feeding is not considered a subject to talk about with children,...

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