It is my professional belief that most consumer goods brands should invest in Latin America.

This should be a no brainer, specially talking about consumer goods. But here we go.

First, brands should invest in Latin America because it is a huge, untapped market, craving for great products.

Because most countries are open to business, being proud of receiving foreing investment either from USA, China, Europe or whoelse. Specially the bigger economies.

Brazil and Mexico are among the 20 biggest world economies. Argentina and Colombia are not that far, showing a high GDP per capita.
Because Latam has a diverse and relatively peacefull population. Outside football, the region is peaceful in terms of ethnic and religious conflicts.

Because although it is huge region spanning dozens of countries, most people speak either spanish or portuguese. It can´t get any easier than that.

Because we are deep into the 21st century and it is dead easy to hire local service providers for almost anything. Latin America has it all. Warehouses, shipping companies, tech providers, marketplaces, retailers, banking system, payment methods, sales and marketing specialists.

BUT, there is always “but”.

Investment in Latin America is not for beginners

Just because although Latin America culture is generally similar to Europe, the region has its own pecularities.

Because most markets fall within “developing countries” label.

That means sometimes infra structure is a challenge. Some places had really bad air service, other have no decent paved roads.

That also means there is a lot of political instability whenever a country changes its government. Some places are more stable, such as Chile, Uruguay, Panama and Costa Rica. Other countries are a mess, like Bolivia, Nicaragua, Venezuela. Most fall between these extremes.

Also there is economic volatillity. Latin americans countries are used to seeing their currencies going up or down for the slightest reasons. Annual fluctuations bigger than 20% are not uncommon. The best strategy to avoid volatillity diversifing investment. So instead of selling just in Mexico, migh as well sell in Colombia ad Brazil as well to mitigate risks.

Also there is corruption. Not so much as the good old banana republic times. Nowadays, the most common corruption is done by industries lobbying to protect their markets with weird anti dumping and other trade barriers.

And there is crime. Latin America is home to 15 of the 20 cities with biggest homicide rate. Only Mexico has 11 in the top 20! Cargo theft is a recurrent problem in latin america, so transporting goods with no insurance is never an option.

And there is labor shortages. It is becoming harder each day to hire local professionals, specially in logistics and tech. So finding a good local partner is usually the best option!

Having said that, it is important to notice that the region has been developing well and smart business should be keeping an eye there, specially when the 2 world largest consumer markets are fighting a bitter trade war.

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