Reports by the World Bank show an economic contraction of 6.7% in Latin America and the Caribbean during the 2020 pandemic, calling it the region worst hit by COVID-19. In Colombia alone, 74% of households saw an impact on their incomes in recent years, according to Kantar, 2021. Together with the lockdown measures, it led to major structural changes in the way Latin Americans evaluate their buying decisions, including:
- More attention to pricing
- Increased “localism”
- A rise in e-commerce and digital payments
- More willingness to try new brands
The LatAm E-Commerce Datapack, 2020-2024
Strategic data on market volumes, purchase habits, payment methods, demand drivers and more for 11 countries
However, it is necessary to identify the effect on specific markets or audiences. With this in mind, we have analyzed and compiled the most significant trends among Latin American consumers, and the main players or industries affected.
#1: Latin Americans Prefer Healthy Food
More than 98% of Latin Americans cook with their health in mind, according to the 2021 report “Cocinar en casa” (Home Cooking) by El Gourmet. When asked what healthy cooking means to them, they responded:
- Eating small, balanced meals
- Choosing healthy food
- Varying the ingredients
The report looked at 35,000 comments on social networks about cooking, and surveyed 2,000 households in Argentina, Bolivia, Colombia, Mexico, and Peru. Latin Americans see nutrition as a way of preventing disease, and are more aware about food hygiene.
There is also a preference for consuming more fruit and vegetables. According to Kerry (2021), this preference is 36%, combined with other motivations such as eating suitable portions (35%), limiting sugar consumption (28%), avoiding additives and preservatives (23%), consuming fresh foods (22%), or reducing meat consumption (18%).
#2: Latin American Consumers Prioritize Environmental Protection
We might refer to those consumers who take consistent measures to respect and care for the environment, such as reducing plastic and water consumption, as “Eco Actives,” and they reflect this in their buying choices. The most recent Who Cares, Who Does report by Kantar (2021) shows that Eco Actives represent $12 billion dollars for the mass consumer goods industry in the region. By 2023, Eco Actives will make up 43% of the Latin American population.
Additionally, there is a group of Latin American consumers, “Eco Considerers,” who do take actions to protect the environment, albeit less frequently. At present, Eco Actives and Eco Considerers account for more than 50% of consumers in countries like Mexico, Costa Rica, and Chile, compared with those who still do not make environmentally friendly buying decisions.
Similarly, the 2021 report by the Kerry firm shows 75% of consumers in Latin America are influenced by sustainability when it comes to buying food and drinks; and 72% are when it comes to buying at a restaurant.
For marketing experts, these consumer attitudes can be turned into powerful advertising messages that highlight a brand’s philosophy on and commitment to sustainability. This strategy has a name: green marketing. Several businesses in the region have been able to take advantage of this concept. Natura & Co is an example of a brand cherished by Latin American consumers for endorsing sustainability. Similarly, brands like Jumbo are gaining high favorability ratings among Eco Active consumers.
#3: Latin American Travelers Prefer New Ways of Planning Travel and Enjoying Destinations
The Latin American travel and tourism could contract even further during the first and second quarters of 2022, as attempts are made to curb the advance of the Omicron variant in the region. In Brazil ocean cruises have been suspended, and in Chile some land borders have already been closed and foreigners have been barred entry on certain international flights. This appears to throw cold water on any rebound following the 62% collapse in travel during 2020, according to Phocuswire.
The Top Selling Products in Latin America
Data on purchase patterns and product preferences
Despite everything, governments in Latin America have opted for “health passes” instead of strict quarantines, as the Los Angeles Times reports. These health passes make vaccination mandatory and reduce isolation time. According to AMI’s analysis, the percentage of the population vaccinated in Latin America has already surpassed the 50% mark, with notable cases like Chile having reached 87% in October 2021. This is undoubtedly a sign of hope for the sector. Phocuswire estimates that the markets of Mexico, Brazil and Chile will achieve prepandemic levels in travel and tourism during 2023, while others like Colombia will do so in 2024.
This tourism–pandemic dynamic has revealed new consumer practices, including:
>Latin Americans are changing the way they buy their vacation packages:
A report by Marriott International in 2021 mentions that 45% of Latin American travelers will book hotels directly for their next vacations, with just 25% using travel agencies. Similarly, 94% of Latin American tourists consider social networks to be important when it comes to planning their trip or receiving recommendations. The opinions of influencers are also relevant to 70% of Latin American travelers.
>Latin Americans prefer their travel experiences to be safe and intimate:
83% of Latin American travelers would be willing to pay more for accommodation that offers health protocols, the hotel company says. And 80% of Latin American travelers are also in favor of requiring a vaccination card.
Their preferred destinations include isolated and secluded locations (31%), and all-inclusive hotels (35%). Favorite activities include gastronomic experiences (65%), cultural and historical experiences (69%), and outdoor adventure (64%).
>Latin Americans are looking for nearby destinations reachable by road:
For their next vacations, 32% of Latin American travelers will prefer traveling to a nearby destination in their automobile, and 29% will take a close flight, according to Marriott International. This data is backed up by a study from Mastercard: Brazilian spending on gasoline rose by 31% in 2021, followed by Argentina (28%), and Dominican Republic (39%). In terms of air travel, just three countries in the region are back to prepandemic levels in flight bookings: Dominican Republic (+29% of airline expenditure in 2021), Mexico (+35%), and Colombia (+12%), possibly due to routes with the United States.
Aside from these changes, there is the role of social networks, which have far outstripped the rest of the sources consulted by Latin American travelers when it comes to planning their trips.
Another aspect that perhaps influences investments in campaigns are the most popular networks for planning travel in Latin America, namely:
- Facebook: 75% of Latin American tourists use it to plan their trips
- Instagram: 61% of Latin American tourists use it to plan their trips
- YouTube: 42% of Latin American tourists use it to plan their trips
- TikTok: 10% of Latin American tourists use it to plan their trips
#4: Latin Americans Prefer “No Tie” Financial Services
A report by the company Temenos showed an increase in the adoption of “no-tie” banking habits; that is, digital, accessible, and essentially mobile banking. 72.9% of Latin Americans surveyed choose to use online banking services, while just 33.9% choose to use in-person services.
More interestingly, 48.4% of consumers in Latin America appear to be looking for a new primary provider of financial services. In addition, 59.6% of Latin American consumers will prioritize digital accessibility and customer service when it comes to choosing a new bank.
Insights into Latin America's Cryptocurrency Market
An in-depth look at consumer preferences and behavior
Furthermore, AMI analyses forecast a boom in cryptocurrencies and blockchain technologies in Latin America. For Tim Jacklich, senior analyst at AMI, interest in cryptocurrencies could even rival the penetration of credit cards in the region. In Argentina, credit card penetration is at 29%, compared with the 12% of Latin American consumers that use cryptocurrencies.
“No-tie” banking represents a challenge to businesses that refuse to adopt new payment methods. Technologies such as QR, NFC, mobile bank transfers, and the blockchain are growing at enormous rates in Latin America. Fintech companies, digital wallets, and neobanks are increasingly discovering new banking solutions. We only have to look at the example of PIX in Brazil, CoDi in Mexico, or Nequi in Colombia. Many of these providers issue virtual or physical debit cards or prepaid cards, with little or no rating required to access them.
According to the PYMNTS portal, by 2025, the value of digital commerce in Latin America is expected to increase by 73%. In some countries the increase will be far more abrupt: 200% in Brazil and 250% in Mexico.
#5: Latin Americans Prefer to Get Their News from Social Networks rather than Traditional Media
In 2021, 2% fewer Latin Americans watch the news on television at least once a week compared to the previous year. Similarly, 10% fewer Latin Americans read the newspaper. Lastly, 14% fewer Latin Americans listen to news on the radio. These are some of the findings in the Informe de Consumo de Medios en LATAM 2021 (LATAM Media Consumer Report 2021).
When Latin Americans were asked about the most reliable source of information to them, they identified two relevant ways of consuming news: Internet and social networks.
In fact, social networks and the Internet are becoming the new source of news consumption in Latin America and the world, which is not surprising given the growing Internet penetration in the region.
Data from firms like Reuters are striking: 84.4% of consumers in Latin America get their news from the Internet and social networks, signifying a 20% lead over television.
6 Key Digital Marketing Tactics for LatAm
What the data suggests we should focus on
Americas Market Intelligence is the leading firm in terms of market intelligence for Latin America. Contact us if you are interested in a consumer study for your market of interest. We have over 600 studies focused on the analysis of consumers, as well as their preferences and interests. These studies have been put together to improve companies’ strategic planning in multiple sectors, including payments, e-commerce, cryptocurrencies, energy, shipping, and logistics.