John Price
Managing Director
AMI
As global trade patterns shift, many companies—especially those from Europe and Asia—are increasingly turning their attention to Latin America. Geopolitical tensions, supply chain disruptions, and shifting trade policies are pushing exporters to look beyond traditional markets like the United States. For B2B and consumer product firms alike, Latin America presents both an opportunity and a challenge. But before launching into this diverse region, one must conduct rigorous market research to ensure success.
This article outlines a strategic, experience-based framework for identifying the right Latin American market for your product, benchmarking country opportunities, and ultimately determining how to compete effectively.
How to Size Markets in Latin America
A practical, research-based approach to accurately size markets in Latin America, including TAM, SAM, SOM, and local insights.
Step 1: Ditch the Regional Mindset
One of the first mistakes companies make is viewing Latin America as a homogeneous block. While business divisions may be structured around regions like “South America” or “Mercosur,” meaningful market research is almost always conducted at the country level. Data sources, regulations, demand dynamics, and competitive environments are all localized.
Even Central America—often treated as a mini-region—offers only limited cohesion in terms of relevant market data. As a rule of thumb: target individual countries, not regions.
Step 2: Don’t Spread Yourself Too Thin
Attempting to enter multiple Latin American countries simultaneously is rarely wise. Every market comes with its own bureaucracies, legal frameworks, and customer expectations. Instead, focus on identifying the single best market for your initial expansion.
Start with a benchmark study comparing 3 to 5 promising countries. This is where your real research begins.
Step 3: Conduct an Opportunity Benchmarking Study
At the heart of any good market entry decision lies comparative analysis. You want to determine which country offers the most strategic opportunity—not just in terms of potential sales, but in terms of feasibility.
The key is to balance market demand with competitive landscape and barriers to entry. While many companies instinctively focus on market size, demand alone is a misleading metric, especially for small to medium exporters.
Instead, focus on:
- Level of competition (local, international, and grey market)
- Ease of doing business
- Tariff and non-tariff barriers
- Distribution and regulatory complexity
- Import dynamics and illicit trade exposure
You don’t need a million-dollar consulting report to do this. Begin by scoring each market across several of these criteria. For example, Brazil might offer massive demand but comes with steep bureaucracy and tariffs. Chile, by contrast, may have lower demand but is easier to navigate.
Step 4: Demand Data is Overrated
If your product is already selling in mature markets like the U.S. or Europe, there’s a good chance it’s already known—or at least introduced—in Latin America. The product adoption lag time across the world’s markets has narrowed significantly. A product that used to take 4-5 years to reach Latin America after first launching in Europe, Japan or the US will likely now arrive in less than a year, if not a few months.
Additionally, demand-side data is hard to obtain with any precision. Reliable market size or forecast data often doesn’t exist in public databases. While AI tools like ChatGPT can offer broad insight, deep market size analysis requires access to:
- Local distributors and importers
- Sales data from retailers or trade associations
- Import records (preferably with 10-digit harmonization code specificity)
Unfortunately, many import data sets are only available at 6- or 8-digit levels—too broad for accurate product-level demand sizing. This leaves you with only two real options: either invest in local interviews and intelligence, or make informed assumptions based on proxy indicators. The fact remains that your success in a market will not be determined by how large demand is but rather by other factors.
Step 5: Understand the Real Competition
Far more important than market demand is your ability to compete.
Key competitive questions include:
- Who are the established players? Are they local, regional, or global?
- What are their price points? Are they undercutting with lower-cost inputs?
- Are there grey market competitors? Products that avoid duties, taxes, and compliance often underprice formal competitors.
- What value-adds do competitors offer? (e.g., local inventory, financing, service)
In sectors like consumer electronics, apparel, and auto parts, the grey market plays a huge role. These informal imports pay no tariffs or taxes and often operate entirely in cash economies. Ignoring them can lead to massive underestimation of competitive pressure.
Step 6: Account for Non-Tariff Barriers
Don’t stop at tariffs. Non-tariff barriers (NTBs) can be just as impactful. These include:
- Product certification and testing requirements
- Labeling laws (including language and safety notices)
- Distribution restrictions
- Handling or warehousing regulations
Some NTBs are straightforward; others are bureaucratic traps that add months to your go-to-market plan. If your product is technical, medical, or food-related, expect to clear several regulatory hurdles before the first sale is made.
Step 7: Brand Loyalty and Market Entrenchment
In many Latin American markets, certain brands are entrenched and dominate with 40% or more market share. Dislodging market leaders is a formidable—and costly—task.
This is especially true in categories with long-standing consumer trust (appliances, beverages, personal care). Unseating a market leader may require aggressive pricing, heavy marketing investment, and local presence.
Before entering, ask:
- Is brand familiarity a barrier?
- How strong is customer loyalty?
- What marketing spend would be needed to gain attention?
Step 8: Financing and Local Partner Constraints
Access to credit is a major constraint in Latin America—not just for end consumers, but also for distributors and wholesalers. Local intermediaries often lack sufficient working capital to import and stock your product upfront.
As a result, many companies extend credit terms (30, 60, even 90 days) to distributors to make deals viable. While this might be a hard sell to your CFO or board, it’s often the price of admission into the market.
Some of Latin America’s strongest local brands won their positions precisely because they figured out how to finance their channels.
Step 9: Determine Required Local Presence
Another critical part of competitive viability is local presence. Depending on your product and your customers, you may be expected to have:
- Inventory stored locally
- Local service or repair teams
- Call centers or customer support in the local language
- On-the-ground sales or technical support teams
For example, if you’re supplying consumer goods, you’ll likely have to work through a small group of powerful retail chains or e-commerce platforms. These players often demand vendor compliance with inventory planning, localized fulfillment, customer support, and sometimes direct integration into their logistics systems.
Many exporters start off thinking they’ll just “sell FOB” and ship product abroad. Reality hits when retailers ask for in-country warehousing, warranty guarantees, or marketing co-investments.
Step 10: Decide If You’re Ready to Commit
Exporting to Latin America may start with a trade show or a distributor agreement—but true market entry often requires strategic investment. This might include:
- Legal entity formation
- Hiring local personnel
- Marketing localization
- Developing partnerships with logistics and service providers
Before committing, be clear-eyed about the real cost of market success. It’s not just about customs clearance and translation—it’s about showing up with a plan to win. You must evaluate whether your company is ready—financially, operationally, and organizationally—to take on those challenges.
The shifting commercial and industrial real-estate markets in Latin America
A conversation with Juan Gallardo, EVP, Latin America, Colliers
Shift the Focus from Demand to Readiness
The natural instinct of exporters is to chase big demand numbers. But in Latin America, the most successful entries are those that ask:
“What will it take to win here—and can we do it?”
That includes examining:
- Competition intensity
- Informal market presence
- Cost of compliance
- Distribution complexity
- Credit and capital expectations
- Localization requirements
A demand-driven strategy without competitive readiness will likely fail. Conversely, a well-prepared, competitively positioned export plan—even in a mid-sized country—can generate strong returns and long-term market share.
In the end, Latin America is not one market but many. Choose wisely, prepare deeply, and enter with humility and adaptability.
