The Latin American Brands in a De-globalization Context
Recent facts have raised in the world the fear of a de-globalization process.
Managing Director, Latin America
ROBERTO DE NAPOLI
Director, Latin America
Kantar Vermeer, South America
Firstly, with the Brexit (British Exit), when the British citizens voted in June 2016 to exit the European Union, eroding the British pound to its lowest level in decades. And now the election of Trump, with his promise of protectionist trade policy in the presidential election campaign.
The tendency is that the countries start to think more locally in terms of trade. In this scenario, local brands will play a very important role, increasingly seeking to meet local needs. For global brands the challenge is even bigger, because they need to have different positioning for each local market, in order to meet these local needs. One good example of this movement is Unilever, a global company that has adapted successful global brand concepts to suit local markets.
In terms of Political context, almost all socialist governments are facing problems and this can represent a very good opportunity for LatAm brands. For example, Cuba is trying to open relationships with US but also with other Latin American countries. Venezuela is facing some economic issues, and probably can represent good perspectives for brands in the middle term. Brazil, which went through the impeachment of Dilma Doussef - a president with a clear Socialist positioning, is following this trend.
In this context, the Top 50 Most Valuable Latin American Brands Rankings increases in importance and relevance, showing that the region has important local icon brands that have successfully explored emotional attributes, aligned with local needs. Skol (Brazilian Beer), Telcel (Mexican Communication Provider), Bradesco (Brazilian Bank), Aguila (Colombian Beer) and Falabella (Chilean Retail) are examples of successful brand strategies focused in this purpose.
However, the Latin American region is going through a crisis period.
The region continues showing a steady decrease in GDP rates. In 2015 GDP dropped 0.5%, the second worst performance in the last 13 years, having been surpassed only in 2009, when GDP declined -1.8% in the world’s financial crisis.
Since 2010 the region hasn’t have GDP growth, mainly due to political instability and external economic factors, such as evolution of oil prices and the US and China's economies deceleration.
Despite several economic and political problems in Brazil and Venezuela, whose GDPs dropped in 3.9% and 5.7% in 2015 respectively, the other countries in the region showed positive GDPs rates: Peru 3.3%, Colombia 3.0%, Mexico 2.5%, Argentina 2.4% and Chile 2.1%.
As Brazil is the largest country in the Latin America, representing almost 33% of the GDP in US dollars, its weak performance had the largest impact in the GDP of the region.