As a mark of South America’s budding global impact, WPP research agency Milward Brown has published its inaugural BrandZ ranking of the fifty most valuable Latin American brands.
The report uses data collected from about 800 brands and interviews from over 25,000 Latin American consumers. Only brands from Mexico, Colombia, Brazil, Chile and Argentina were included.
With a value of $10.6 billion, Brazilian energy company Petrobas topped the list. Mexican communication provider telcel came in second and Bradesco, a financial institution from Brazil, ranked third.
Latin America is fertile ground for investors looking to capitalize on new wealth in emerging markets. Since 2006 the middle class has grown by 25 percent throughout the continent and despite a worldwide economic lull, GDPs are on the rise.
As the affluence and influence of Latin American countries rise, local brands are gaining a foothold on the regional and international stages.
The value and reach of financial, communication and retail brands have grown the most, according to the report. Brands from these categories comprise more than half the ranking’s entries.
The two best represented countries in the index are Brazil and Mexico. Meanwhile, Chile, Colombia and Argentina comprise 40 percent of the ranking’s total $136 billion brand value.
Regional and local differences
While Brazilian and Mexican brands dominate the list, consumers in those countries are extremely diverse.
Mexico is the largest Spanish speaking country in the world with access to a wider variety of brands than other Latin American countries, thanks to its proximity to the United States. As a result, Mexican consumers tend to be less loyal to brands.
Portuguese-speaking Brazil, on the other hand, has the most loyal customers, with 65 percent choosing brand favourites and sticking to them. Brazil also has the most optimistic consumers, due in large part to its fantastic economic growth over the last five years (we actually did a whole podcast on this which you can listen to here).
Digital up for adoption
When it comes to internet usage, Latin America continues to play catch up (although significant growth is expected in the near future). Poor infrastructure, spotty G3 network coverage and expensive data plans have kept internet penetration at a paltry 50 percent for most countries (Chile has the highest, according to the report).
But these numbers are at odds with Latin America’s enthusiasm for social media. Latin Americans are accessing digital content via mobile connections more than ever (especially in Mexico) and are using that connectivity to interact on social networks.
Colombian users, for instance, spend up to eight hours per week on social networks. That’s nearly double the global average of 4.8 hours.
The report’s conclusion: Brands looking to engage Latin American consumers should make themselves at home on social media. Because as internet penetration improves, brand reach will, too.
For more information, download the full report [PDF].