Gabriela is the director of Sunny Sky Solutions, a consultancy born in Yorkshire and now based in Uruguay, that supports UK companies across the region with services like distributor recruitment, lead generation and market research. Gabriela is an economist, the author of The SME Guide to Latin America (now on its second edition) and a huge fan of jelly babies and jaffa cakes alike. You can find out more about her at www.sunnyskysolutions.co.uk
You can also read her 10 tips for exporting to Latin America.
Latin America is a region of 600 million people and 20 countries. As you can imagine, a region that stretches across two hemispheres, with countries in North, Central and South America, and covering five different time zones, is never going to be homogenous. But how can you work out these differences? What do you really need to know about the region’s splits when exporting?
First of all, when exporting to Latin America, think about geography. As mentioned above, there are Latin American countries in:
- North America (Mexico)
- Central America and the Caribbean
- South America
I’d also encourage you to look at Mexico and Brazil as two separate “regions” because of their sheer size, population and complexity.
So, if you grab a map, by now you should have some clearer divisions:
- Central America (countries like Nicaragua or Costa Rica, for example)
- Caribbean (Cuba and Dominican Republic, for example)
- South America
South America is pretty huge, too (Brazil on its own is the size of the whole of Europe!), so let’s see if we can break it down a bit more.
If you are thinking about exporting to Latin America, you will quickly find that nowadays there is clear division between East and West, Atlantic and Pacific, respectively. Countries along the Pacific coast (especially Peru, Chile and Colombia) are in general more open to trade, less protectionist, so with lower import duties and fewer import restrictions than countries East of the continent, towards the Atlantic, like Brazil, Argentina, Uruguay or Paraguay.
That leads you also to a more political division between the Pacific Alliance (Mexico, Chile, Colombia, Peru) and the Mercosur (Brazil, Uruguay, Argentina, Paraguay and currently suspended Venezuela).
Another way of dividing South America, even the whole of Latin America, is by country size/population (relative size, remember that even small countries in South America are huge compared to European countries):
- Big countries: Brazil, Mexico, Argentina (sometimes Colombia is included here, too)
- Medium size markets: countries like Peru and Chile
- Smaller markets: Uruguay, Paraguay, sometimes Ecuador and Bolivia, too (Bolivia and Paraguay are much bigger than Uruguay, for example, but have less developed economies with considerably less purchasing power)
Talking about purchasing power, I often suggest looking at these countries in terms of development statistics like this, particularly if you are working in consumer goods. But depending on your industry or sector, you might want to group them and rank them according to market potential (for example, if you sell agritech products for temperate climates, you need to go for countries like Uruguay, Argentina and Chile, if you sell products for tropical agriculture, you need to think of other countries, the same happens in mining and other specific industries).
A final, but not minor, way of looking at Latin America is with regards to language: remember that Brazilians speak Portuguese and the rest Spanish (with some French-speaking exceptions).
What’s important is to identify the differences and regard each market as individual. Because, as we always say, Latin America is a region, not a country.