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Latin America’s Consumers Shopping Habits, Preferences & Market Trends

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Page 1: Latin America's Consumers

Latin America’s Consumers

Shopping Habits, Preferences & Market Trends

Page 2: Latin America's Consumers

EXECUTIVE SUMMARY

• A new consumer class of 200 million is emerging with an estimated US$5 billion in consumption

• Current percentages of Class C (middle class) is growing sharply in many of the region’s key markets

• By 2020, per capita consumption in Latin America will nearly double from 2012 levels

• Latin American shoppers favor a number of key products and their spending patterns reveal 13 major product categories that we analyze in the study

Page 3: Latin America's Consumers

Defining new targets in Latin America is key for marketers.

Source: IPC Target

For years, the safe, sensible strategy was to focus on the top 20% earning

more than US$15,000/year

However, a new middle class has emerged of 200 million—1/3 of Latam’s

total of 600 million consumers

This new class consumes an estimated

US$5 billion/ year

Page 4: Latin America's Consumers

Sources: 1United Nations, 2World Bank, 3Cetelam report O Observador Brasil 2012, 4Consultora W, 5Departamento Administrativo Nacional de Estadística, 6Asociacion Mexicana de Agencias de Investigacion de Mercados y Opinión Pública, 7Asociación Peruana de Empresas de Investigación de Mercados, 8Novomerc Chile

7%

21%

3%

31%

7%

13%

47%

53% 52%

33% 32%

28%

0%

10%

20%

30%

40%

50%

60%

Argentina Brazil Chile Colombia Mexico Peru

Classes AB

Class C

In fact, Latin America’s Middle Class (Class C) has become a significant portion of the population in several key markets.

Page 5: Latin America's Consumers

And Latin America’s consumer market will continue growing. By 2020:

Source: Americas Market Intelligence

US$10.7 billion

combined GDP

640,000,000 total consumers

Equivalent to 9% of global GDP

Double Latam’s GDP in 2010

Private consumption per capita of US$11,143 compared to US$6,360 in 2012

Page 6: Latin America's Consumers

Following the Money in Latam

After reviewing dozens of studies, we have identified many of Latin America’s favorite products. Here’s a brief review.

Page 7: Latin America's Consumers

Sources: 1Investigaciones Economicas Sectoriales, 2Instituto Brasileiro de Geografia e Estatística, 3Global Insight, 4Asociacion Nacional de Empresarios, 5Scotiabank

25% sales increase in Argentina,

20111

23% sales increase in Colombia,

20124

16.6% sales increase in

Brazil, 20112

20% sales increase in Peru, 20125

11.6% increase in appliance consumption in México

through 20153

#1 Appliances: Sales are spiking in many Latam markets.

Page 8: Latin America's Consumers

Source: América Retail

US$70 billion

Sales of beauty products in Latin America in 2011

#2 Beauty products & cosmetics: the region is posting significant growth

Page 9: Latin America's Consumers

Brazil is Latin America’s top beauty market…

Sources: 1Euromonitor, 2Pyxis Consumo

US$43 billion Total sales in 20111

18.9% Growth in sales in 20111

15% projected growth in 20122

Brazil is the

#3

beauty market in the world

Page 10: Latin America's Consumers

…but other cosmetics markets are growing strongly in Latam.

Sources: 1Maison du Luxe, 2SComité Peruano de Cosmética e Higiene, 3Cámara Cosmética de Chile, 4Cámara Nacional de la Industria de Productos Cosméticos

18% Projected Growth in Perú in 20122

5% Projected Growth in Mexico in 20124

40% Growth in Argentina in 20111

8% Growth in Chile in 20113

Page 11: Latin America's Consumers

#3 Cars: strong sales in 2011, including records in several countries.

Source: Asociación Latinoamericana de Distribuidores de Automotores

6.4 million

cars were sold in Latam in 2011

7% increase compared to 2010

Page 12: Latin America's Consumers

Record sales in 2011 occurred in several markets.

Sources: 1Asociación de Concecesionarios de Automores de la República Argentina, 2Asociación Nacional Automotriz de Chile, 3Econometría, 4Asociación de Representantes Automotrices del Perú

Perú 140,000 units,

24% higher

than 2010

Colombia 324,570 units,

27.8% higher

than in 2010

Argentina 857,983 units

sold, 29.5%

higher than 2010

Chile 334,000 units,

21% higher

than in 2010

Page 13: Latin America's Consumers

A number of brands posted record sales in Latin America in 2011.

Sources: Peugeot, Nissan, BMW, Audi, Porsche

3,000+ units, 21% increase

7,000+ units, 37% increase

33,000+ units 144,000+ units, 13% increase

326,000+ units, 10.9% increase

Page 14: Latin America's Consumers

And the trend continues in 2012 in many markets…

Sources: 1Econometría, 2Asociación de Representantes Automotrices del Perú, 3Asociación Mexicana de la Industria Automotriz, 4Cámara Automotriz de Venezuela, 5Asociación de Distribuidores de Automóviles de Panamá

Venezuela:

16% increase in

sales Jan-July 20124

México:

11.9% increase in

sales Jan-July 20123

Perú:

35% increase in sales

Jan-July 20122

Colombia:

34% increase in

sales in August 20121

Panama:

6% increase in sales

Jan-July 20125

Page 15: Latin America's Consumers

#4 Coffee Shops: by 2016, 13% of world’s total value in coffee shops will come from Latin America.1

Sources: 1Euromonitor, 2Starbucks

Currently Starbucks has

560 Stores in Latam

In 2012 Starbucks announced it will open 300 new stores in Argentina & México by 2015 and “several hundred” stores in Brazil2

Page 16: Latin America's Consumers

Starbucks is not the only coffee brand expanding in Latin America.

Source: Dunkin Donuts press release, July 2012

Dunkin Donuts will open more than 125 stores in the next 10 years in Latin America in Chile, Colombia and Peru

Currently, it has

300+ Stores in Latam

Page 17: Latin America's Consumers

#5 Computers are posting strong sales in Latin America.

Source: Pyxis Consumo

In 2012 Latin Americans will buy

40 million computers

5% increase

compared to 2011

Page 18: Latin America's Consumers

Tablets are becoming very popular in larger markets…

Sources: 1Carrier y Asociados, 2IDC

69% sales increase first half 20121

2.6 million tablets sold in 20122

1.5 million tablets sold in 20122

Argentina

Brazil

Mexico

Page 19: Latin America's Consumers

…and also in smaller markets.

Sources: 1Dominio Consultores, 2Gremial de Empresas de Informaticas, 3GfK Chile

334% sales increase first half of 20122

52% sales increase first half of 20123

1,124% sales increase: Sep 2010 to Sep 20111 Chile

Peru

Guatemala

Page 20: Latin America's Consumers

Source: Euromonitor International

5.2% of México’s population can

afford luxury goods

#6 Luxury: Latam is an emerging market.

Latam’s luxury market is

growing by 15% a year

Luxury sales in Brazil are set to hit

$12 billion in 2012

25% growth compared to 2011

Page 21: Latin America's Consumers

#7 Pet Care: Latin Americans are spending more than ever.

44% increase

over the past 5 years

Source: Euromonitor International

US$11 billion Current sales of pet

products in Latin America

Page 22: Latin America's Consumers

Top pet care markets in Latam include Brasil, Mexico and Argentina.

Sources: 1Pyxis Consumo, 2Euromonitor

645,000,000 Argentina pet care sales, 20102

US$2,900,000,000 Brazil pet care sales, 20111

US$1,000,000,000 Mexico pet care sales, 20102

Plus, the pet care market has grown by 20% in Chile over the past 5 years and by 25% in Perú in 20112

Page 23: Latin America's Consumers

30% 24% 20% 14% 11%

10%

Sources: 1Vision Mobile, 23D Chile, 3Google Our Mobile Planet, 4IDC, 5Futuro Labs

Top Countries By Smartphone Penetration, 2012

Argentina3

Chile2

Mexico3

Brazil3

Peru4

Costa Rica5

#8 Smartphones: in Latin America, 17% overall penetration in 2012.1

Page 24: Latin America's Consumers

By 2017, 145 million smartphones will be sold in Latin America—4 times more than in 2011.1

Sources: 1Pyramid Research, 2Carrier y Asociados, 3IDC, 4The Competitive Intelligence Unit

Sales increase in Argentina in 20122

Sales increase in Brazil in 20123

Sales increase in México in 20124

106%

73%

26%

Page 25: Latin America's Consumers

Sources: 1Deutsche Bank, 2Abeceb.com, 3Emerging Pharmaceutical Markets in Latin America Dec. 2011 report

Brazil’s pharm market ranks #7 in the world

8.9% projected growth for Colombia’s pharm market 2012-20163

6% projected growth for Mexico’s pharm market 2012-20141

26% growth for Argentina’s pharm market, 20112

#9 Pharmaceuticals: The Latam market is at US$60 billion per year1, with strong growth in specific markets.

Page 26: Latin America's Consumers

Source: Euromonitor International

• Households in Latin America spend 4% of their income on soft drinks, the highest

amount in the world

• By 2016, soft drink consumption in

Latam will equal that of Western Europe

• Mexico is the world’s biggest

consumer of soft drinks with a per capita

consumption 40% higher than that of

the U.S.

#10 Soft drinks: This category is also growing powerfully in the region.

Page 27: Latin America's Consumers

Source: Euromonitor International

In 2011, Latam posted US1.7 billion in sales of sun care products, 18% of overall sales in the world

#11 Sun Care Products: By 2016, Latin America will be #2 in the world in sales.

Page 28: Latin America's Consumers

Sources: 1TDMonthly, 2Associação Brasileira dos Fabricantes de Brinquedos, 3Instituto IBOPE Inteligencia, 4Asociación Mexicana del Juguete

Top sales categories include dolls, building sets and

infant/preschool products1

Latam accounted for 14.4% of Mattel’s worldwide sales

and for 7.8% of Hasbro’s1

Brazil’s toy market grew by 9% in 2011 to reach US$2.8 billion2 &

grew another 14% in 20123

México’s toy market reached US$2.1 billion in sales in 20114

#12 Toys: Latin America is the world’s fastest-growing toy market: 6-8% annual growth.

Page 29: Latin America's Consumers

Source: United States Department of Commerce

1.78 million Latin Americans visited the United States in 2012: 18% more than in 2011

By 2016, 2.5 million Brazilians will visit the United States

#13 Travel: Latin Americans took 15% more trips in 2011.

Page 30: Latin America's Consumers

Source: Visit Florida

4 of the top 10 countries who sent the most visitors to Florida in 2011 were Latin American:

1.5 million 375,500 387,000 306,500

#14 Florida is the top U.S. destination for Latin Americans.

Page 31: Latin America's Consumers

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