Jose Duarte discusses consumer trends in Latin America

Consumer trends in Latin America have been modified by the economic impact of the pandemic as the preference for natural foods, personal care products and health grows, according to a recent study. Jose Duarte, an established businessman and entrepreneur from Costa Rica, provides insight into the latest consumer trends in Latin America and what lies ahead.

As consumers show a propensity for natural foods and other products, they are also opting more for brands that give confidence and online purchases so as not to socialize or go out to stores. One of the main challenges companies now face is how to satisfy a consumer more concerned about having a sense of well-being and security of the products. At the same time, the economic contraction has changed consumer behavior, and companies are working on implementing new strategies.

In some parts, excessive consumption has been detected, given the feeling of some people for fear of a certain shortage or feeling good about acquiring products that may not be so necessary or it is not necessary to buy in excess. Asserts Duarte, “With the eventual end of confinement, there is an opportunity for brands and services related to health, natural food over that prepared industrially, physical activity and personal care, among others.”

Another trend is the change in favor of prosperity, so excessive consumption, dependence on digital socialization, the economy based on fossil fuels, egocentrism as a social and environmental problem, packaging and waste management must be stopped.

According to data from the Economic Commission for Latin America and the Caribbean, the pandemic has caused an unprecedented increase in poverty levels in the region, with 22 million new poor during 2020, reaching 33.7% of the population. The extreme poverty rate stood at 12.5%, levels that had not been observed in the last 12 and 20 years, respectively, modifying consumption trends.

Due to the reduction in household incomes, product prices have become more relevant among consumers. 78% of Latin Americans pay more attention to product prices since the pandemic began. This figure is eight points higher than the average for the world, which shows that 70% of global consumers give importance to prices.

The pandemic pushed a crisis for local producers and small entrepreneurs in the region. However, this factor did not go unnoticed by consumers, who overwhelmingly (66%) said that support for local commerce is important. This trend gained greater strength among the population, with most in favor of local consumption.

While this is a disruptive trend in several places on the planet, more and more are joining the use of second-hand products. Explains Duarte, “This preference has been growing in the region and not only has to do with the reduction of income, but as it is also closely related to the purpose of contributing to the care of the environment and responsible consumption.”

Perhaps one of the strongest effects of the pandemic was the total ban on interpersonal contact. In this scenario, digital and electronic payments were taken over the different purchase channels in the region, causing an accelerated development of financial technology. In the region, 59% of people now prefer to make their payments using contact cards or mobile applications.

The latest trend is directly related to the previous one, as the pandemic caused buyers to migrate to the new digital platforms where businesses offered their products. In this way, despite the reopening, 56% of Latin Americans affirm that they will continue shopping online even after the crisis. Brazil and Colombia, with 64% and 58%, respectively, are the two countries in the region where people use this channel the most.

About Jose Daniel Duarte

Jose Duarte is originally from Heredia, Costa Rica. He has been an entrepreneur and business owner for more than 20 years, and divides his time between his existing operations and researching new possibilities in which to invest. When he’s not dedicating time to his businesses, he spends time with his supporting wife and two children.

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