Karina Liendo, Senior Consultant in Intrix Boston led a Corfo mission in the Canadian Atlantic Region during the last week of September. Corfo is the Chilean Economic Development Agency. The mission was one of the activities for the Investment Attractions Program for the mussel industry in the Region de los Lagos. As a next step, a group of potential investors will visit the region in November. Intrix is positive that the Canadian mission will generate interesting joint ventures in the growing Chilean mussels industry.
Industry News
The cosmetic industry is pursuing Latinas in the growing US Hispanic market. According to a 2003 report by New York based Market Research.com, of the total value of the $8 billion market, $1.1 billion represents the ethnic market of Hispanic, African-American and Asian women.
Cosmetic companies are starting to target the Hispanic market, taking into consideration the estimate of 48.9 million Hispanic females expected to be living in the US by 2050 (185% more than the 17.1 million in 2000 according to the census data). In addition, a study published this year by Mediamark Research indicated that Latinas are 37% more willing to spend upwards of $300 on cosmetics than non-Hispanics. Both large and small cosmetics companies are starting to recognize this opportunity. L'Oreal's Maybelline is planning to increase advertisement by 75% in Hispanic TV and print. In comparison with 2003 the company has increased targeting this market by 30%.
Some signs of this new direction in the market are already seeing in TV advertisements. Avon's new spokeswoman is Salma Hayek (the Mexican actress). Revlon chose Cuban-American actress Eva Mendes, and two Latin models will represent Cover Girl by Procter & Gamble.
However, as mentioned before it is not only the giants who are targeting to the Hispanic niche market. Rosemary Garcia, a former cosmetics executive, realized there were no products matching the Latina skin and founded the company Bonita Cosmetics. As a result the company started three years ago already has estimated revenues of $4 million and a 75% profit margin. Intrix believes Latin American companies have advantages in exploring the Hispanic markets, and it is not just the cosmetic industry that is offering these tremendous opportunities.
Economy in the Region
Chile, small country growing at big steps… During the last decade Chilean non-traditional exports have grown at 6.82% annually, and total exports at 6.28%. Total exporting companies are 4,858 and target 153 countries. The first product in the list is salmon, which this year is over taking Norway, the traditional worldwide leader in exports. The main market for Chile is the US, with 15.1% of the total exports, followed by Japan with 12.2%. The consistency in the open-market policy has allowed Chile to succeed in the foreign markets. Chile has free trade agreements with US, the European Union and is negotiating with China and India.
Ranking of Chilean Export Markets
Country
Ranking
Total Exports (US $ millions)
Participation %
United States
1
2,183.1
15.1
Japan
2
1,764.7
12.2
China
3
1,281.5
8.9
South Korea
4
936.9
6.5
Holland
5
682.7
4.7
France
6
681.4
4.7
Brazil
7
640.7
4.4
Italia
8
619.4
4.3
Mexico
9
572.1
4.0
Taiwan
10
515.6
3.6
Source: Prochile
International Overview
China is the factory of the world. Growing at 10% annually and with 1,300 million inhabitants, it is hard to find something that this country cannot produce. China manufactures more than 70% of the toys in the world, 50% of the shoes (more than 1 pair per each habitant), 50% of the cameras and 30% of microwave ovens. In the automobile sector the growth is 25% annually with 3 million of units in 2003. The textile sector will even surpass the current 25% of the world market share after the quotas elimination in 2005. What it is interesting to realize is that China will also be the big market of the world. China has US $1,000 income per capita, equivalent to $4,000 of purchasing power, and 200 million of the people are medium and upper classes.
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