From Pampers to Panasonic, Latin America Consumers Switch to Budget Bands Rob Walker - Financial Times
go to original September 25, 2014

Latin America’s consumers have gorged on big-name global brands for more than a decade. Spurred on by rising prosperity, easier access to credit, and the emergence of glitzy shopping malls, the good times have rolled.

And they have continued to roll even as economies have cooled. Spending in shops across the region topped $1tn last year – up 11 per cent on the year before, according to Euromonitor, the research company. The squeeze on spending power, especially in Brazil and Mexico, barely registered.

“No one wants to give up their smartphones and favourite fashion brands,” says Gustavo Koniszczer, the Latin American manager of FutureBrand, a consultancy. “For the middle classes, it’s all about aspiration and inclusion.”

This is the key, perhaps, to the resilience of sectors such as perfume, electronics, fashion and luxury goods. Brazil for example, has just become the biggest market in the world for Johnnie Walker Scotch whisky, despite the hefty $40 price tag for a bottle.

Brands are badges of social mobility in Latin America, and no one wants to be moving in the wrong direction.

But something has to give. According to the latest consumer survey from LatAm Confidential, an FT research service, more Latin Americans opted for cheaper brands than traded up over the past 12 months. This shift was most pronounced in consumer staples such as shampoo, deodorant and toothpaste – and strongest in Mexico and Argentina.

Read the rest at FT.com

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