IHA International Offices and Representatives: Mexico, South America, Columbia, Ecuador and India

On May 19, IHA representatives presented market reports from Latin America and India. They discussed the top five trends in each region and outlined economic trends impacting retail developments. The presenters noted eating habits and purchasing behaviors that differed from those of U.S. consumers. Presenters also identified distributors and provided contact information for retail category buyers.

Lourdes Ramirez, IHA Mexico office, outlined the latest developments in retail strategies and consumer needs.

1. Recovery of Retail Sales in 2021: Department stores and supermarkets are enhancing their online platforms. Some are increasing online channels by using third party platforms as marketplaces. Despite the boom in ecommerce, some retailers have excess stock and are discounting prices as much as 50% for product categories such as kitchenware, electronics, appliances, apparel and others. Now is an ideal time for suppliers to present their products to buyers for the fourth-quarter and/or holiday purchasing season.

2. New Players in the Retail Sector: Jüsto is a new online grocery and supermarket chain currently operating in Mexico’s major states. It has announced plans to expand operations to Latin America soon.

• Kitchenware, small appliances and home organization products continue to be in high demand. As many employees continue to work from home and students take online classes while schools are closed, there is more meal preparation at home.

• Private Label Expansion: Several department stores are looking to expand and position their private label lines in various housewares product categories such as bakeware, kitchenware and tableware.

• Adoption of credit plans to increase sales: More retailers are developing credit plans to allow mid- to low-mid customers to purchase durable goods with weekly or monthly payments.  Suburbia, a department store sister company of Liverpool, launched a credit program and announced plans to add 10 new stores to its existing 165 stores in 2021.

Alex Pinheiro, IHA representative South America, explained some key differences between Latin American and U.S. consumer preferences.

1. Adapting Your Products for the South American Market

Products cannot be sold “as-is” and with the same expectations as for the U. S. market. The appetite for the product outside of the U.S. might not be the same, and some adaptations should be considered.

• Margin/price: The average income of a middle-class Brazilian family is equivalent to 30% or less than the average income of a middle-class family in the U.S. Consider small volume/large margin vs. large volume/smaller margin.

• Quality: Understand the quality of domestic competitors’ products. Consider a “good” or “better” brand and reserve your “best” brand for your home market.

• Consider user needs and product size. For example, although South Americans eat corn, it is not eaten off the cob: A corn holder would not sell well.

• Sustainable products should be considered as a trend and will take time to arrive to South American markets. Consumers are beginning to ask for such products, and retailers are looking to source more sustainable products and items made of recycled materials.

• Pet products: With more time at home, people became more involved with their pets. Buyers are looking for functional products, as well as items that allow pet owners to spoil their pets.

• Office furniture/accessories: This category remains strong as companies are delaying the return to offices. People who had not invested in their home office are now doing so.

• Home and housewares categories experiencing high demand: cookware, utensils, kitchen organization, closet organization, cleaning, furniture, juvenile products including toys, barbecue products, trampolines, gaming chairs, office furniture.

Catalina Ramirez, Colombia and Ecuador IHA representative, discussed retail responses to global trends and highlighted unique situations in each country.

1. Because of high freight costs from China, delays and difficulties in transportation, U.S. suppliers with available inventory that can be shipped from warehouses in North America have an opportunity in the market. Retailers are eager to import products with shorter delivery lead times.
2. Consumer demand for outdoor products, such as BBQs and pizza ovens, has significantly increased. In 2020, two new distributors for such products were established. These groups distribute brands including Napoleon, Weber and Ooni, which are new in Colombia and opened fresh opportunities in the market.

• Pandemic restrictions will continue through 2021 due to the slow vaccination rollouts, and consumers will continue to prepare meals at home. Sales of kitchen appliances increased more than 30% in 2020; smart home appliances were especially strong.

• The pandemic created a sustained increase in demand for cleaning products in Colombia. As families have spent more time in their homes than ever, cleaning, storage and organization continues to be a strong performing category. Demand for these products has not diminished, even after more than a year. 

• During the pandemic, courier services in Ecuador saw an increase of 75%; about 3.5 million Ecuadorians made their first online purchase during this time. A tax of USD42 was removed for imports delivered by a courier. The most important products Ecuadorians bought by courier were home appliances and cooking appliances.

CK Nair, IHA representative India, summarized key trends in consumer preferences.

1. As most people who can work from home will continue to do so, storage solutions remain in high demand.
2. With more people preparing meals at home than ever, sales of kitchen appliances, food preparation tools and gadgets are strong.
3. The desire to make the home a sanctuary has increased the demand for products in home décor, fragrances, gardening tools and accessories.
4. Consumer concern for feeling safe and protected at home has dramatically increased. Products offering an added health and safety benefit, such as vegetable cleaners, water purifiers and products to wash fresh meat and seafood, have become more important.
5. Consumer desire is growing for smart home or automated products that simplify tasks, such as home cleaning robots.