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Chile Stalked by Changes, Deceleration and Uncertainty
By Claudio Apablaza
Business Development Director
Millward Brown Chile
Three years ago, Chile underwent another major change. For the first time since the return of democracy, there were protests against the country’s economic system, and demands for structural change. Students were the most visible participants, but there were also important provincial regionalist movements and mobilization on the part of ecologists and copper workers. It was called the “social movement”; civic participation motivated by specific issues beyond the traditional political parties.
The movement had extremely high levels of support amongst citizens, and
opposing political parties seized the opportunity to take up their demands and
propose a platform for a new government, which then won the elections and
was inaugurated in March of 2014. The new government’s program focuses on three
main structural reforms: tax, educational and constitutional, as a response to social
demands for greater equality.
In 2011, Chile was growing by 5.8%, thanks to an increase in the price of copper driven
by growth in China. It was this scenario that saw the growth in social movements and
citizen support of changes. But today the scene is entirely different. China stopped
growing by 10% annually and the price of copper dropped to its lowest in seven years.
Banco Central de Chile has decreased growth estimates for 2014 from 4% to 2.5%, and
parliament is discussing the largest tax reform in 50 years.
Three years ago, front pages and broadcast news
covered the different social movements. Today
it’s economic deceleration that is in the headlines.
Almost all analysts agree that this is mostly a result
of slowed growth in China, but they also
argue that uncertainty about tax reforms
is responsible for significant reductions
in investment by corporations and
consumption of durable goods by consumers.
Chile is fundamentally an importer of consumer
goods and an exporter of commodities, so the low
price of copper has raised the dollar, making imports
So, what is the scenario for consumers and brands?
A slower economy and uncertainty about the future.
While corporations decrease investments, and
brands advertise less, consumers feel less confident
about their economic future and buy fewer durable
goods. Apparently, consumers also become more
critical of the system and reduce their support of
educational and tax reforms.
What have marketers done in response to this context?
Besides adjustments in advertising spend, with a focus
on digital media, communication with consumers does
not yet show adaptive changes except in the traditional
savings campaigns by financial services companies. It
appears that Chileans continue to be very conservative in
brand communication, especially when issues are deemed
“political.” So far no brand has seized the chance to
empathize with consumers in its communication.