Latin America marketplace

Brazil Tech

Latin America (LATAM) current statistics and growth potential makes it an important component for any IT vendor with a WW footprint ambition.

  • GDP of US$ 6+ trillion
  • Population 668 M
  • IT market of ~$ 340 Billion
  • Home of G200 companies such as  ITAU-Unibanco (46,000 ATM), LATAM Airlines (319 aircrafts), América Móvil ( 360 million access lines)
  • High usage of internet and mobile apps: Brazil (#2), Mexico (#6), and Argentina (#8) are among the highest ranked markets worldwide for total hours per week spent on the internet. WhatsApp that has been installed in 90% of iPhones; Brazil and Mexico hold positions #4 and #7 of App downloads worldwide
  • US$200B of Foreign Direct Investment (FDI) or in the range of 10-15% WW
  • The demographic dividend will continue to benefit the LATAM markets. People between 15-60 of age will keep climbing
  • Mexico (15) & Brazil (11) will become the 4th and 5th largest economy by middle of the century
  • Brazil and Argentina business cycle, the 1st and 3rd largest economies, do not correlate with US. 
  • The Pacific Alliance, a block of countries comprised by Chile, Colombia, Mexico and Peru, has brought political stability and growth to the region.

The LATAM Deferment

Companies that operate efficiently in LATAM benefit from incremental revenues, access to Global 2000 companies, and develop a WW customer base.

Despite the opportunities in the LATAM marketplace and the rapid acceleration of technology adoption (please refer to: Blogclean Blog!!)  companies delay doing business in LATAM. We call this postponement “the LATAM deferment,” situation in which companies, instead of pursuing a parallel internationalization process, choose not to operate in the region.

This delay is explained by factors that can be grouped in two major categories:

1. Investment decision that would benefit large and more stable markets:

  1. Evaluating investment of entering LATAM vs developed countries or regions.
  2. Comparing the small LATAM addressable market potential of LATAM vs other business alternatives
  3. Applying a higher hurdle rate, either explicitly or implicitly, in the ROI calculation to factor-in LATAM’s political climate and economic cycles.

2. Region Complexity which is hard to manage through without the right expertise:

  1. Difficulty of planning and execution in a region with multiple languages, countries’ sizes, and business practices.
  2. Complexity of LATAM business regulations. Five of the ten countries with most complex business governance in the world is from Latin America (TMF Group)
  3. Scarcity of qualified candidates to represent an IT vendor in the local market, results in costly proposition.

LinkIT LATAM business value proposition confronts head-on the LATAM deferment and offers their clients a unique approach to enter the LATAM market.