From issue: Latin America's Real Middle Class (Fall 2012)
The Middle Class Market Boom
From sweatshops to supermarkets: why the middle class is good for business. (video interview available)
There’s been an amazing revolution in the global commercial landscape. The developing world has emerged as one of the most promising wholesale and retail markets. Many of these regions in the past were valued primarily as a source of cheap labor—often in maquilas and sweatshops. Today they are seen as a source of new consumers.
Latin America has been the most dramatic example of the transformation.
While per capita GDP is steadily rising in advanced emerging economies such as China and India, the potential impact on consumer markets is greater in our region. Sustained economic growth since the turn of the twenty-first century, accompanied by an increase in average earnings and a decrease in poverty levels in nearly every country, has put more discretionary income into more Latin American pockets. And as more of the region’s residents entered the middle class, they contributed to a surge in demand for consumer goods, ranging from cars and refrigerators to personal care products and mobile phones.
The shifting market opportunities have also transformed business analysis and marketing strategies. Although multinational firms had been selling their products in Latin America for decades, their customers came mostly from the upper classes. Their Latin America offices had been forgotten step-siblings of the North American and European offices that handled the core business. But Latin America’s emerging middle class has inspired innovative approaches to tap the potential of the new consumer market across the region...