Latin America, 2003
Latin America Council, 2003: Creating value in serving consumer products to Latin America’s sizeable lower income segment, or “emerging” consumer base, is a tempting opportunity – or perhaps even a necessity – for retailers in search of new customers. Although their buying power may be less significant when compared to that of upper social levels, their share in consumer product markets is very relevant. These consumers are not merely attracted to low prices; they exhibit a very specific set of product, category and store format needs that distinguish them as consumers from the middle and higher income segments. Yet, and after a decade of significant growth of the region’s “modern” retail sector, smaller scale retailers efficiently supply a significant portion of fast-moving consumer goods to these segments. Furthermore, small retailers manage to offset scale disadvantages and show a sustainable business model – even before the effects of any informality in taxes and labor contributions. Our research, intended to examine emerging consumers’ mindset and to draw new lessons from small-scale retailers, found that much of the conventional wisdom on lower-income consumers is unfounded and that there is much more to small-scale retailers’ value proposition than meets the eye.