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300 Million Middle Class Consumers Are Waiting For You
Posted by: Sunny Sky Solutions 20 July 2012
Children's Fashion in Latin America
With a population of around 600 million, Latin America is a huge market for most sectors in terms of size. According to UKTI, the middle class population of the continent is 300 million people (1), showing that there is also purchasing power.
Children’s fashion businesses will understand the possibilities that Latin American demographics offer them. In Brazil, for example, over 3 and a half million babies are born every year. In Mexico, over 2 million.
Culturally, Latin American parents will allocate a sizeable proportion of their income to buying goods for their children, including clothes. Children tend to dress more formally than in the UK, particularly for the many social occasions such as birthday parties (not just children’s birthday parties), Christenings, traditional/religious holidays and more. Still, consumers are fairly conservative in terms of choice, favouring more traditional colours and prints, although younger parents are more likely to consider bolder and brighter choices. Grandparents and godparents will have a big say in terms of children’s fashion, and are likely to purchase clothes as gifts.
Our research across the continent has highlighted the presence of US companies such as Carter’s and Osh Kosh B’Gosh. International brands such as Hilfiger, Guess and Ralph Lauren can also be found, mainly through department stores or through franchises. Spanish brands are also strong, such as Boboli. Some continental European brands such as Laranjinha are also present. We have also seen some British brands including Pepe Jeans London.
Almost every country will have its own brands. In the last ten years, we have witnessed the regionalisation of children’s fashion chain stores, such as the Argentina-based Mimo & Co, which now has over 100 retail outlets in 16 Latin American countries (and exporting outside the continent, for example to Israel, Russia and South Africa). Similarly, Cheeky, also from Argentina, has over 150 stores and is present in over 10 Latin American countries.
Organic and/or fairtrade children’s clothes’ availability is limited but growing. Imported brands like Aravore and Nature’s Purest are already placed in some Latin American markets. National organic and/or fairtrade brands are also starting to emerge, focusing particularly on the ethical aspects of the industry and using locally-grown cotton.
Where to start
Variations across Latin America are important, not only in terms of consumer preferences but also in terms of other factors such brand loyalty, routes to market, retailers, payment methods and seasonality. What sells well in Bahia (North of Brazil), for example, might not sell well in Sao Paulo. How consumers buy children’s fashion in Mexico City is different to how they buy it in Buenos Aires. Therefore, understanding the local markets is key.
Even how you research children’s fashion will affect your future success. Make sure you understand the basics, such as the way in which different products are called in different countries, since there are huge variations. For example, a “chamarra” in Mexico is what would be called “campera” in Uruguay (coat).
Import duties will vary considerably across countries, and depending on the country of origin. It is important to find out information about Free Trade Agreements. You might also want to consider local manufacturing. Most Latin American governments are working hard to protect their own textile industries and therefore most of them will apply high import duties to textiles, including children’s fashion. If this is the case, consider what makes your products stand out. Branding is likely to be key.
After deciding whether Latin America is for you or not, and what markets to target, make sure you research them carefully. Exhibiting at trade shows in the region as well as some key international shows such as FIMI in Spain, ABC Show in the US and Kind und Jugend in Germany is a good way of getting more international exposure, but you must work out your (short-term and long-term) return on investment and be clear on your objectives.
Things to consider include:
- Routes to market – will you find a distributor, open your own store, run a franchise or find an agent?
- How will you sell? – through department stores, small boutiques, e-commerce?...
- How will you advertise? – parenting magazines and social media are just two methods to consider
- Pricing – bearing in mind import duties and exchange rate fluctuations, plus shipping costs
- Competition – who is there already and what are they doing?
- Customer care – it is not all about hard selling – just like in your domestic market, you will want your customers to become loyal followers – look after them and listen to them
- Investment and timescales – Latin America is not a market for quick-wins, so are you prepared to invest time and resources?
For more information and to discuss working together, please contact Gabriela Castro-Fontoura at email@example.com or call +44 (0) 1756 630415
(1) Foreign and Commonwealth Office/UK Trade and Investment “The stable consumer? The expansion of the middle classes in Latin America” October 2011
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