How can suppliers succeed in the Latin American market?

Due to the shrinking trend of orders from Europe and the United States, emerging markets in South America have become the focus of Chinese export and foreign trade companies in recent years. Mr. Javier Huerta, Deputy Manager of the Latin America Department of Hong Kong Chen Huangzhong Cai Accounting Firm, introduced the South American business conditions, as well as the purchasing habits and strategies of South American buyers to the entrepreneurs present at the Ningbo Station of the "Zhisheng Future Export Forum".

Established in 1986, Chen Huang Zhong Cai Accounting Firm provides reliable and high-quality professional business consulting services in Hong Kong and major cities in mainland China, including China business consulting, auditing, other certification, taxation, company secretarial and business process outsourcing services. Headquartered in Hong Kong, with offices in Shenzhen, Shanghai, Beijing, Guangzhou and Nanchang, it has about 200 employees.

Analysis of the five countries in Latin America

Huerta: Chile, Mexico, Colombia and Peru account for 30% of Latin America's GDP.

Let's start with Chile, the most stable country in Latin America, with a GDP growth rate of 5.2% and a steady economic growth over the past decade. Chile is the fourth largest economy in the world, with the highest degree of economic freedom among Latin American countries, and the highest degree of free trade policy and policy stability. Chile is the first Latin American country to sign a free trade agreement with China.

Next, let's talk about Mexico. Mexico is the only North American country in Latin America. Mexico is deeply influenced by the United States. Mexico has signed 12 free trade agreements with 44 countries. Mexico is one of the members of the North American Free Trade Area. There are three countries in the free trade zone, namely Mexico, Canada, and the United States. According to Goldman Sachs, Mexico is Latin America's fifth-largest economy, and it will see steady economic growth over the next ten to two decades. The relationship between China and Mexico in terms of investment and trade is getting closer and closer. In recent months, the President of China and the President of Mexico have exchanged visits, and the investment and trade between China and Mexico are constantly growing.

Colombia. Colombia is a country that has changed a lot, and in the past we didn't want to do business with Colombia, but things have changed a lot now. Colombia is the fourth largest economy in Latin America and is currently growing at an annual rate of 6%. Colombia now has a very good business environment. The government has made a lot of efforts to protect foreign investment. Colombia has signed 11 free trade agreements with 11 countries.

Brazil. Brazil is a big country in Latin America, it can be said to be the largest country, but it is also the only former Portuguese colony. It is the sixth largest economy in Latin America. Brazil's economic growth rate is also very fast every year. In the next few years we need to pay more attention to Brazil, because in 2014 the World Cup will be held in Brazil.

Peru. With an average annual economic growth rate of 5.2%, Peru is the only country in Latin America with a large Chinese community. Very important parts of Peru's economic structure: agriculture, mining, manufacturing, of course, the textile industry is the most important in manufacturing. In 2009, the Peruvian government and China signed a free trade agreement, which took effect in 2010. So far, the Peruvian government has made great efforts to attract Chinese investment. Peru has signed 14 free trade agreements, including with China.

Analysis of Latin American Market Demand Capability

Next, I will talk about the comparison of major markets in Latin America, including consumption structure and products imported from China.

The highest GDP per capita in Latin America is Chile, followed by Brazil, Mexico, etc. Just now I mentioned that Chile is very important because it has the highest GDP per capita.

In terms of purchasing power, Chile ranks first, followed by Mexico, Brazil and Peru.

In terms of household expenditure statistics, the country with the most expenditure is Brazil, followed by Mexico, Colombia, Chile and Peru. We can see that the ranking is related to the size of the country. Brazil is the largest economy in Latin America, so consumption is also the highest of.

The most consistent among these countries is the import of electronic products and mechanical equipment from China. In addition, there are differences in each country. For example, Chile prefers to import shoes, toys, and steel products from China, and Mexico prefers to import vehicles. , plastic products and furniture, Colombia likes to import Chinese auto parts, Brazil likes to import Chinese steel and toys.

Analysis of Latin America Trade Facilitation Index

Next is the index of cross-border trade facilitation, including border management transparency, market environment, etc. Singapore ranks first, Chile ranks first among Latin American countries, followed by Peru , Mexico, Brazil, Colombia ranked last. Or continue to use the index of trade convenience. How many procedures do we need to go through and how long it takes to enter the Latin American market? Chile is the most convenient, followed by Peru and Mexico. China is the fourth, more troublesome than China is Columbia River Brazil.

Consumption characteristics of Latin American countries

Look at the data from Chile, which is very useful. The products that Chileans are in great demand for are electronic products, because their income is relatively high, so they like to buy more electronic products, electronic products class of trendy gadgets. Chile has the highest penetration rate of mobile phones and networks in Latin America, and the market for such products will be very good. The average Chilean family has one or two children. The family size is relatively small. Parents are willing to spend money on their children. The brands they buy are luxurious. According to a survey by the local chamber of commerce, 78% of toys are imported from China.

Mexico. There are different regions in Mexico. The residents in the northern region have higher incomes and higher purchasing power. The reason is also very clear. The regions closer to the United States have higher incomes. Purchasing power in southern Mexico is relatively low. If you want to do business, you should keep this in mind. The central and northern regions have higher income and should be the main target of the market.

Family income in Mexico, low-income families account for 59%, and our target group with higher incomes accounts for 33%. The current situation in Mexico is changing very fast, because low-income groups are also slowly increasing to high-income groups. The red area The proportion is constantly expanding.

Next look at the population ratio. Mexico's population is very young, with 80% of Mexicans under the age of 45. In the next ten or twenty years, the Mexican market will be optimistic, because the income of these young people will continue to increase.

We know that the US team has a very strong influence in Mexico, and many brands that are popular in the United States are very popular in Mexico, so we need to remember that we must pay attention to the wind direction in the United States and the impact on Mexico. Also keep in mind that Mexican consumers are very price sensitive.

Brazil is a big country, so we divided it into seven columns, A1 and A2 are the wealthy class, B and C are the middle class, we need to know that there is a very stable scale of high-income people in Brazil. E is the poor class.

50% of the middle class spend around $9,000 a year. A very interesting phenomenon, many luxury brands can be seen in Brazil, and the Sao Paulo store in Brazil is the most profitable store in the world. Sao Paulo is not the capital of Brazil, it is one of the most important cities in Brazil, Difuni has four stores in Sao Paulo.

Brazil has a very large credit consumption industry. Brazilians like to spend money and borrow money from banks. 33% of Brazilians have credit cards. Brazil's economy is stable and the unemployment rate is well controlled by the government. Brazilians prefer to spend money, even more than they earn.

Colombia. Colombia also has a very young population and is willing to spend money. The capital of Colombia has a lot of luxury luxury brands. Colombia's big cities have a lot of shopping centers, Colombia is very fond of spending money on luxury goods, they know what's popular in the United States and Canada. Colombians love to travel so much that they spend more money on travel than other Latin American countries.

Peru. The proportion of Peru's population, of which whites account for 15% and 37% of mixed races, Peru has the largest Chinese population, of which Japanese account for 3%, which has a great impact on the country.

We can also know that there are Chinese areas in Peru, and there is a brand in Peru called "Mr. Wang". The diet and other habits of the Chinese have had a certain impact on Peruvian society. In Peru, we can also see a lot of rural people pouring into Peru's big cities. They are looking for good jobs. These changes are very fast. These people also get good opportunities and their incomes are also increasing. In the middle of the year, the spending of these people will also rise.

Latin America Market Strategy

First, to do business with Latin America, we need local people to help you. Because of the language barrier, other countries in Latin America speak Spanish, and Brazil speaks Portuguese.

Second, learn how to get along with Latinos. It is very important to establish friendship in the process of getting along. Friendship is very important to Latinos. He hopes to establish long-term friendship. After the friendship is established, business will be easy to do.

Third, Latinos are generally late for meeting you or attending meetings. It's not that they don't value you or don't want to do business with you, it's that they're used to being late for everything.

Also, you don't rush the Latin American to make a decision, it will cause a lot of questions, you know that the Latin American will ask you a lot of questions all the time, and sometimes he will say "OK, thank you", which is very common Expression does not mean that you are interested in your product and will buy your product.

In addition, you need to do your research well. Many people think that Latin America speaks the same language, but it is actually different. The choice of products varies from country to country. The same product may sell well in Brazil. It may not sell in Peru, so you must do your research and make a smart decision if you want to enter Latin American countries.

Finally, I would like to remind you that in Latin American countries, it is very common for customers to ask you for a sample, or how to use a sample, Latin American people want to know more information, you don't have to worry Because they all do.

What information do I need if I want to do business with Latinos? This exhibition was an exhibition I attended last year, and it was very useful. This exhibition was held in Sao Paulo, Brazil, where Portuguese is spoken. There were many customers from all over Latin America. At this exhibition, you can meet many customers and look for to many business opportunities. One is the Miami show, where there is a large Latin American community with a lot of business information.

Doing business with people in Latin America requires meeting the right people and customers. To do business in Chile, you need to contact the Chilean Chamber of Commerce. The Chamber of Commerce will give you a lot of advice to help you do business in Chile; the same is true in Mexico, you can contact The Mexican Foreign Chamber of Commerce will provide you with a lot of useful information; Colombia also has a chamber of commerce, I also went to Colombia a few months ago, and Colombia also imports a lot of products from China. If we cooperate with these institutions, we will definitely get a lot of useful information information.

Thank you very much, I would like to say that Latin America is a very different region in the world and speaks a different language than ours, but I am very sure that developing trade with Latin America is the future direction, and trade between China and Latin America will definitely be There has been great development. I also want to say that we must have Latin American values. The people of Latin American countries attach great importance to friendship and family. I am a Mexican myself and understand these very well. Finally, I hope you can enter the Latin American market. Hope your business will be successful.