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Brands Buck the Trend As Peru Experiences a Slower Year
By Claudio Ortiz
Millward Brown Perú
For the last couple of years, Peru has shown not-so encouraging results compared to the first decade of this new millennium. After 10 years of economic brilliance, it seemed Peru had resisted the 2008–2009 crisis, but now it appears it was just late in arriving. The country stopped growing at around 7% and, in 2014, an estimated growth of merely 4% is expected.
China’s slowdown and the subsequent
fall in mining exports, among others,
appear to be the original source of a
downturn that seems to be strengthening
and consolidating during 2014. This
is followed by a negative trend in the
expectations and a halt in the domestic
consumption, which can be clearly seen in
Bad years? It depends, I guess, on the
benchmark. If, for instance, we compare
our current situation against 2008, when
this country had a growth of almost
10%, the diagnosis is negative; if we
compare ourselves with our neighbors, the
assessment will depend on the country we
choose. It’s the same if we compare Peru
with the rest of the world. The truth is that
the vertiginous growth period seems to
have passed, although Peru is still growing
faster than the global average.
However, if we look at the process in a bit
more depth we’ll see that what has stopped
growing –or has rather decreased – are
those products we call commodities. Yes,
precisely those that don’t have a brand.
So what is happening with the brands?
Apparently, they continue to be
healthy. The iPhone 5 was followed
by the iPhone 5C and 5S, but now
there is the problem of having to
compare them with the Samsung S4
and the S5, and with Sony, Motorola,
LG and so on... And it appears that
the telephone companies don’t have
enough stock to meet demand. As
for cars, well, there seem to be more
luxury cars around now and we are
already seeing dealers of luxury
brands in the provinces.
Low-cost sodas and powder juices
seem to have contracted, probably
because of the bottled waters and
juices of supported brands. Malls
keep opening and expanding, and the
global fever for bicycles – with their
eco-friendly and luxurious side –
seems to be reaching Peru.
You can keep counting and it seems
that there is no slowdown for those
brands that knew how to build
equity. Even the Brand Equity market
Perhaps the macroeconomic
indicators depict a less than
encouraging scenario, but this is
clearly not correlated to people’s
desires. It’s true that those who work
in some of the affected industries
could find their purchasing power
impacted, but it is also true that some
brands are still building value and
strengthening in the global market.
The local brands that are growing are
those that are trying to carve out a
niche for themselves abroad.
The secret to growth seems to be
the work put into building the brand
since the best brands seem to be
ever healthy and with a potential
to keep on growing. Is it – perhaps
– that only some companies are
realizing that, more than products,
people are asking for brands?