Top Consumer Hotspots in Latin America

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While Latin America is far from where it was during the boom years, it’s also not as bad off as it was in 2014-15…or even 2016 for that matter.

We’re starting to see some encouraging signs of growth, and we’ve looked at that in terms of 11 hot growth markets back in February and a few more we’ve identified recently.

But that growth was regional and projected across the next few years. Below, we drill down to 2017 to look at broader economic growth in specific Latin American markets and then share some areas where there’s been greater consumer spending.

These 2017 LatAm consumer insights could help marketers, business intelligence professionals, executives, investors and others get a better sense of which areas are leading the economic recovery in Latin America.

ARGENTINA

Overall, Argentina had 1.1% growth in GDP for Q1 2017 compared to Q4 2016, with a slight GDP growth of .3% compared to Q1 2016. While by no means spectacular, the figures suggest that the recession may be over in Argentina, a view shared by Nicolás Dujovne, Argentina’s Minister of Finance. In addition, the IMF recently increased its projection of 2017 GDP growth for Argentina from 2.2% to 2.4%, followed by projected 2.25% growth in 2018.

Consumer Spending Growth Areas in Argentina

#1: Electronics

Sales of electronics in Argentina went up by 14.2% between January and May 2017, according to research from GfK. This is compared to the same period during 2016, which was a very tough year for electronics sales. One product category that particularly spiked was laptops, with a 50% sales growth, which may be attributable to the elimination of the 35% tax on the importation of finished computers.

#2: Motorcycles

Between January and May 2017 motorcycle sales grew by 49.4% in Argentina, according to Asociación de Concesionarios de Automotores de la República Argentina and Cámara de Fabricantes de Motovehículos (CAFAM). Currently Argentines are buying around 50,000 motorcycles per month, though the trade associations expect motorcycles sales in Argentina to reach 700,000 units in 2017. Zanella, Honda, Motomel, Corrven and Gilera are the top 5 motorcycle brands in Argentina from a sales standpoint.

#3: New Cars

According to Asociación de Concesionarios de Automotores de la República Argentina (ACARA), new car sales totaled 451.178 units between January and June 2017, compared to 338,373 units during the same period in 2016. This means that new car sales were up more than 33% in Argentina during the first half of 2017. The top-selling car models in Argentina so far during 2017 include the Volkswagen Gol, the Renault Nuevo Sandero and the Chevrolet Onix. In addition, sales of luxury cars went up by 80% during the first half of 2017.


BRAZIL

After 20 straight quarters of drops in GDP, Brazil’s GDP grew by 1% during the first quarter of 2017, according to Instituto Brasileiro de Geografia e Estatística. Brazil’s agricultural sector had its largest growth in more than 20 years, with a 13.4% increase compared to the previous quarter. This was the highest growth in a quarter for this sector since Q4 of 1996. Industry also rose, increasing by 0.9% after drops in the past couple of quarters. It’s also noteworthy that Brazil’s mining and quarrying industry expanded by 1.7%. There’s also been a 53.1% increase in Brazilian exports during the first half of 2017.

Consumer Spending Growth Areas in Brazil

#1: Cars

New car sales went up by 4.4% during the first half of 2017 in Brazil, according to statistics published by the Federação Nacional da Distribuição de Veículos Automotores. More than 993,000 vehicles were sold in Brazil during the first half of 2017, compared to 951,203 units sold during the first half of 2016. An article in AutoInforme claims that this is the first car sales increase in Brazil during a semester since 2013.
The Associação Nacional das Fabricantes de Veículos Automotores (Anfavea) projects that overall, 2017 new car sales in Brazil will go up by 4.5% to 5%.


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In addition, more than 5.25 million used cars were sold in Brazil during the first half of 2017, a 23.7% increase compared to the first half of 2016, according to Federação Nacional dos Concessionários de veículos Automotores)
In terms of individual car brand sales increases in this period in Brazil, Jeep’s sales were up 53%, Nissan’s were up 38%, Ford’s were up 15%, Toyota’s Brazil sales were up 2.7%, Renault’s sales were up by 5% and Honda’s were up by 3.6%. However, the leaders in car market share in Brazil are still GM (#1), Fiat (#2), Volkswagen (#3), Ford (#4) and Hyundai (#5).

#2: Smartphones

While no results are yet available for the first half of 2017, IDC did recently report that mobile phone sales in Brazil rose by 25.4% during Q1 2017—a total of 12.4 million units were sold. Of these 12.4 million units, 11.4 million were smartphones while the rest were feature phones. As such, smartphone sales in Brazil during Q1 2017 grew by 22.6% compared to Q1 2016. IDC projects that overall cell phone sales in Brazil will go up by 7.2% to reach a total of 51.2 million units and that in all of 2017, 47 million smartphones will be sold in Brazil. This will bring Brazil back to the same total of mobile phone unit sales it had in 2015. The 47 million smartphones projected to be sold in Brazil in 2017 is a significant increase from the 43.5 million sold in 2016.

#3: Insurance

The insurance sector in Brazil grew by 13.9% during Q12017, according to figures reported by Confederação Nacional das Seguradoras.

#4: Travel Spend

Brazilian travelers spent nearly 35% more on international travel during the first half of 2017, according to the Banco Central. They spent a total of US$8.8 billion, compared to US$6.5 billion during the first half of 2016.

#5: Books

Book sales in Brazil grew in volume by 5.47% during the first half of 2017, along with a 6.59% increase in revenues, according to a report bu the Sindicato Nacional dos Editores de Livros.


CHILE

While Chile’s projected GDP for 2017 is a modest 1.5%, its foreign trade has grown by more than 6% during the first half of 2017. In Q2 the Chilean economy expanded 0.7% compared to Q1, while personal consumption spending rose by 2.6% on a year-on-year basis.


Consumer Spending Growth Areas in Chile

#1: Cars

According to the Asociación Nacional Automotriz de Chile, new car sales grew by 16.1% during the first half of 2017, with more than 162,000 units sold.

#2: Homes

In the Greater Santiago area, housing sales grew by 31% during the first half of 2017, according to the Cámara Chilena de la Construcción. The bulk of sales were with apartments, with 6,449 of them sold compared to the 7,975 total housing units sold in that time period.

#3: E-commerce

Chile’s e-commerce market registered a 30% growth in sales for the first half of 2017, compared to the same period during 2016. More than 776,000 products were sold online in Chile during the first half of 2017, a 45% increase compared to the first half of 2016. The Camara de Santiago projects that 2017 e-commerce sales in Chile will total US$3.7 billion, though our own estimates at AMI indicate that they could be slightly higher: US$4 billion.

#4: Cosmetics

Sales of beauty products rose by 4.9% for January-May 2017 compared to January-May 2016, according to the Cámara de la Industria Cosmética. In Chile, overall cosmetics sales are more than $2.8 billion in retail value and has posted good growth despite being plagued by counterfeit or contraband products.

#5: Luxury

According to the Asociación de Marcas de Lujo, sales of luxury products in Chile will grow by 5% in 2017. In 2016, sales of luxury products in Chile totaled US$600 million, which in turn represented 10% growth compared to 2015. Growth in 2017 is expected to be larger in Chile with specific segments of the luxury market, such as clothing (23%) luxury travel (14%), wines (14%) and watches and jewelry (10%).

MEXICO

Mexico’s GDP grew by 2.8% in Q1 2017 compared to Q1 2016, according to the Instituto Nacional de Estadística y Geografía (Inegi). This is the biggest growth since Q3 in 2015. In July 2017, the Instituto Mexicano del Seguro Social that Mexico set a record in June 2017 by creating a total of 86,233 jobs. Mexico set another record by creating 517,434 jobs in the first half of 2017.

Consumer Spending Growth Areas in Mexico

#1 Cars

New car sales went up by 2.9% in Mexico during the first half of 2017, according to the Asociación Mexicana de la Industria Automotriz (AMIA). In addition, Mexico actually outproduced Brazil in terms of cars during the first half of 2017, with 1.88 million versus the 1.2 million produced in Brazil. As such, Mexico produced 12.6% more cars in the first half of 2017 than it did during the same period in 2016. So far, the country is on track to break its 2016 production record and manufacture nearly 3.7 million cars.

#2: Luxury

According to Euromonitor, Mexico’s luxury market grew by 6% in 2016 with a value of US$4 billion in terms of goods. According to projections from Luxury Lab, Mexico’s luxury market will grow another 6% in 2017.


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#3: Smartphones

While sales have dropped for desktops, printers and tablets, IDC projects that smartphone sales in Mexico will increase by 5% in 2017. Additional research from Counterpoint indicates that the Mexican smartphone market registered growth of nearly 25% in the first quarter of 2017, with the LTE-capable smartphone segment growing by more than 50% annually.

#4: Videogames

According to HP, the videogames market in Mexico grew by 12.3% during the first quarter of 2017, with a total of 59.1 million of Mexican gamers. HP also forecasts that the Mexican videogame market will grow by 8.4% in 2017.

#5: Video Streaming

According to the Competitive Intelligence Unit (CIU), the streaming video on demand market grew by 25.6% in Mexico in the first half of 2017 compared to the first half of 2016. There are currently 7.4 million streaming video subscriptions in Mexico, compared to just 600,000 in 2012. CIU indicates that Netflix is the subscription video on demand leader in Mexico, with 63.6% of subscriptions, followed by Claro Video with 24.9% of subscriptions, Blim with 6.9%, HBO Go with 2.3% and Fox Premium with .9%.

PERU

According to Peru’s National Bank, Peru’s GDP will grow by 3.5% in the second half of 2017 and by 4.2% for 2017 overall. As further evidence of an economic upswing, Peruvian exports grew by 27.8% during the first half of 2017—compared to the same period of 2016. Moreover, as of May 2017, Peru’s exports market had experience 11 straight months of growth, according to the Ministerio de Comercio Exterior y Turismo.

Consumer Spending Growth Areas in Peru

#1: Cars

Car sales went up by 4.7% in Peru during the first half of 2017, according to the Asociación Automotriz del Perú, with the biggest growth happening with the light vehicles segment (5.5%). Scotiabank projects that car sales will grow another 4.8% during rest of 2017.

#2: E-commerce

While brick-and-mortar retail only grew by 0.5% in sales, online sales in Peru grew by 40% during the first half of 2017, according to Gfk. Earlier, analysts had projected 15% annual growth in online sales through 2020 for Peru.

Need to Know More?

Contact Americas Market Intelligence for market intelligence on LatAm, whether it involves a market assessment, consumer insights for Latin America, competitive intelligence, investment liability, risk assessment, best practices and more.
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