Did you know 96 percent of consumers live outside the United States?
That’s a big reason to think about global expansion. But where do you even start?
Our advice: Latin America.
Why Latin America
Strong trade ties and infrastructure combined with economic stability and a rich talent pool make this area particularly attractive to retailers.
When it comes to online purchase power, Latin America had 267 million digital buyers in 2019. This generated $70 billion in online retail sales.
In addition, Latin America is expected to generate approximately $116 billion in sales by 2023, reaching more than 339 million digital buyers.
Convinced? Here are six must-do’s for a successful retail expansion strategy in the Latin American market.
1) Market with Social Media.
With the pandemic changing consumer habits and pushing people online, more consumers in Latin America are using social media to inform themselves about their purchases.
In fact, 40 percent of people in Mexico make purchasing decisions based on influencers.
And in Brazil, department store Riachuelo saw sales increase by 124 percent after incorporating influencers into their marketing strategy and increasing their online presence.
With a strong social media strategy, you’ll get your products in front of more consumers, increasing your opportunity for sales.
2) Hire a Language Expert.
People are more willing to connect with businesses who provide content in their preferred language. In other words, translated content drives sales.
With only 5 percent of Brazil’s population claiming to have proficiency in English, it’s important that your website and other sales tools are localized.
Make sure you translate into the specific languages for the market your expanding into. For example, Spanish in Spain is very different from Spanish in Colombia, and Portuguese in Portugal is very different from Portuguese in Brazil.
There are a lot of linguistic differences between the languages that will put consumers off from buying your products, but you’re not expected to know them all; hiring an expert, like TransPerfect, can help you mitigate the process.
3) Educate Yourself on Cultural Specifics.
Don’t assume that everywhere in the world follows traditional western holidays. For example, Brazil celebrates Valentine’s Day on June 12.
Plus, there are also holidays that you probably haven’t heard of. For example, Mexico celebrates Buen Fin, which is a national shopping holiday in November. And last year, it reached MXN$118 billion in sales.
By educating yourself about Latin American holidays, you’re not only respecting the culture, but you’re making sure your sales and messages are relevant. A cultural consultant can help you understand specific slang and cultural differences so you’re properly communicating with your audience.
4) Use a Cross-Border Payment Solution.
Each country in Latin America has a different way of processing payments, and the consumers in those countries have preferred methods of paying for products that vary.
Only 19 percent of Latin Americans have a credit card, and 6 percent of those cards have the ability to process international payments. This means having an international payment option is crucial to successfully expand into this region.
In addition, it’s incredibly important that you know the ins and outs of the different payment processes to avoid fraud and grow a loyal customer base.
5) Price Strategically.
Since the US dollar is stronger than Latin American currencies, it’s essential that you figure out an appropriate price for your products based on the country you’re looking to launch into.
Research the market you’re interested in and compare your offering to local vendors.
Installment options are highly popular in Latin America and definitely something worth considering.
6) Provide Stellar Customer Service.
Customer service issues can damage your reputation if you don’t handle complaints and enquiries quickly.
In fact, Brazil and Mexico have set up review websites for consumers to give feedback about shipping or services. Most of these reviews are negative, and since a lot of consumers use these platforms to inform their purchases, this could make or break a new business coming into the market.
By investing in quality personnel to provide excellent customer service, you’ll build a customer base that will keep coming back for more.
In October, we partnered with EBANX, the leading payment solution that connects global companies to markets in Latin America, to discuss the tips mentioned in this article. You can watch the webinar recording here.
And if you’re interested in expanding into Latin America, our team of experts can help you kickstart your strategy. Email us at email@example.com to find out more.