A few islands of economic brightness have surfaced in an ocean of South American gloom, says Rick Tobin, president of Strategy Research Corporation (SRC), now part of Synovate, and a co-author of the "2003 Latin American Marketing Report". The new report presents buying power estimates for 18 countries, plus Puerto Rico, and 70 metropolitan markets across Latin America.
Latin American nations located closest to the United States appear to have fared better in general than those furthest from the U.S., according to Dr. Adolfo Chiri, SRC's chief economist, the report's other co-author.
Argentina, Uruguay, Paraguay and Venezuela (a notable exception to the "proximity" rule) led the 10% downturn in consumer buying power in Latin America, estimated to total $1.2 trillion.
While the combined economies for the region are not experiencing growth, there are some obvious winners and losers. Puerto Rico and Mexico have the highest levels of average buying power per household, among the 125 million Latin American households, the report says. Twenty-two percent of Mexicans and 21% of Costa Ricans feel they are personally better off economically than in the previous year, while 64% of Latin Americans feel that their personal economic situations are worse than the year before.
Consumer Habits and Views of the Future Vary
Optimistically, 58% of Latin Americans expect their personal economic situations to be the same or better next year.
At the same time, 54% of Latin Americans consider that their countries' economic situations will be the same or better next year, while 38% believe their country's economic situations will be worse. It's important to note that Argentina experienced a 62% decline in consumer buying power this year, while other countries, including Ecuador, experienced an 18% growth in buying power for the same period.
The report details consumer buying habits and concerns across many industry categories.
Twenty-five percent of Latin American households report doing grocery shopping daily. Sixty percent prefer grocery shopping in supermarkets, while 28% shop for groceries in traditional markets. Interestingly, shoppers are influenced most by quality, rather than price or taste when making their purchasing decisions.
Unemployment and security are among the leading problems that concern Latin Americans, while urban transportation and fixed phone services are the services with which Latin Americans are least satisfied.
In electronic services, 85% of Latin American households connected to the Internet do so by dial-up connection. Seventy-five percent of Internet users use it primarily for e-mail, while 63% report using online banking for paying bills. Latin Americans listen to the radio an average of 19 hours per week.
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