On February 25, 2022, the forecast for Latin America was hit by a black swan event (a succession of an event of great socio-economic impact, unpredictable or unexpected for society): Russia’s large-scale invasion of Ukraine. Why might a war on the other side of the world materially impact Latin America? The world is virtually unanimous in condemning the Russian attack on a sovereign nation and has launched a powerful economic counterattack, designed to punish the Russian elite, isolate it logistically and cripple the world’s 11th largest economy.
Furthermore, although COVID may be in the past for Latin America, the economic and political setbacks represent considerable obstacles to the region’s recovery. In almost every election in 2021, an indecisive and fed-up mood among Latin American voters led to the replacement or demotion of ruling parties. The disproportionate cost of living for the working poor and middle classes has further divided societies and limits the rebound in mass consumer spending.
In this article we decipher the context of the region for the benefit of the economy, political and social stability.
The digital economy
It went from being a luxury to a necessity for everyone. The ability to sell online and deliver efficiently to customers has become a must for many businesses. We accelerate digital transformation and innovate to stay afloat in the market, creating new opportunities and business models that generate more employment and exponential economic growth.
75% of urban adults use mobile phones and have access to the internet, which is why we must focus on technological solutions based on user experience for industries with the greatest digital demand: banking, transportation, shopping, telecommunications, games, and travels.
Logistics of essential supplies
The increase in demand for all kinds of basic products has put the transportation industry to the test and has raised shipping costs exponentially. The maritime sector, which has long suffered from low profits, achieved a more profitable year in 2021.
In Latin America, the rapid growth of e-commerce, which is estimated to have grown close to 40% in 2020 alone, has turned logistics into a profitable industry, with never-before-seen profits and flashy marketing.
Political Interference
Although the most centralist legislative powers can prevent the approval of laws, taxes or constitutional reforms harmful to the country, the new ideologically biased presidencies still have the power to modify regulations and stifle investment in the process, as has been so clearly demonstrated by Lopez Obrador in Mexico.
The Latino struggle against authority has brought an ideologically anti-establishment executive leadership to power in Peru and Chile. However, the continuing list of sectors vulnerable to regulations and interference from the new lineup of politicians, whose lack of experience in government and ideals fostered by academia, makes them sources of risk for the entire region.
Without a doubt, Latin America is a region in constant evolution and very attractive for foreign entrepreneurs and brands. It is necessary to cover needs that could change the lives of Latino consumers, who await with great expectation what the largest market in the world has to offer them. There are great benefits that could be obtained, both by companies and users, in their introduction to the Latin American market.
How can we help you successfully introduce products or services to the Latin American market?
At Pulse, we create various work systems that allow us to get to know the region in its entirety, which is why we are the best alternative to promote your campaigns in Latin America. These are the new services that will help you achieve your goals:
