Latin America comprises all of South and Central America, and Mexico which is part of North America (PSU, 2021, p.1, para 1). It has a variety of distinct cultures mostly due to distance between civilizations, rugged geography, and former colonial influence. While Spanish is the most widely spoken language, countries like Brazil officially speak Portuguese, while some others have a variety of official languages like English, Dutch, and French (PSU, 2021, p.1, para 2).
Many of the countries in Latin America have traditionally lagged behind other parts of the world (North America/Asia/Europe) with respect to their economies and how developed those economies were. “Despite their natural beauty and resources, the Latin countries have been plagued by poverty, despotic governments, bloody revolutions, and profound social unrest. Part of this has been caused by the financial mismanagement of their enormous natural and human resources, and partly by the unequal distribution of wealth and power that is concentrated among less than 5 percent of the total population—the upper-class, educated “elites” (Abramson & Moran, 2018, p.405).
In recent years this has been changing in a positive way, as many economies in Latin America are now growing at a tremendous rate (PSU, 2021, p.2, para 1). This is due to the various countries tapping into their natural resources, modernization, and expansion of wealth for more than just an elite few (PSU, 2021, p. 2, para. 1). This growth has led an increase in foreign influence, as well improvements in education and technology (PSU, 2021, p. 2. para. 2).
The increase in the level of technology has been specifically important during the Covid-19 pandemic which is still affecting people across the globe. Citizens of the world have had to adjust to how they typically went about their daily lives, and find new ways of doing business. With Latin America’s continued emergence as a growing market, we saw a huge increase in e-commerce there. Specifically in retail e-commerce which rose by 37% in 2020 (https://oxfordbusinessgroup.com/news/how-covid-19-triggered-latin-american-e-commerce-boom).
Prior to Covid-19, e-commerce activity was comparatively low across Latin America. Some of the issues that held it back were by the “region’s substantial unbanked population, complicated logistics connections and general lack of trust in online methods” (https://oxfordbusinessgroup.com/news/how-covid-19-triggered-latin-american-e-commerce-boom). As with the rest of the world, people had to change the way their daily lives operated, and this led to a positive effect as it relates to online shopping. Simply put many of the traditional brick and mortars would not have been able to survive had people not transitioned to buying online.
A few interesting statistics I came across were that an estimated 13 million people in Latin America purchased something online for the first time. “Retail e-commerce grew by 36.7% to around $85bn, according to data company Statista. On a national basis, particularly significant growth was seen in Argentina (79%), Brazil (35%) and Mexico (27%)” (https://oxfordbusinessgroup.com/news/how-covid-19-triggered-latin-american-e-commerce-boom).
These numbers still fall behind traditionally strong economic centers like Asia/Pacific, Europe, and North America, but it does show that Latin America is an area to keep an eye on when thinking about business strategies, and trade in the upcoming years. A number of local players like Mercado Libre and Rappi have shown tremendous growth since the onset of Covid-19. And that has led to greater foreign investment from companies like Visa, and Japan’s Softbank (https://oxfordbusinessgroup.com/news/how-covid-19-triggered-latin-american-e-commerce-boom).
While the pandemic has slowed business worldwide for everyone, Latin America’s recent growth in the past twenty years as an emerging market, and specifically during the pandemic, shows that as business leaders we constantly need to readjust to circumstances. And Latin America in particular is showing the world the importance of not always relying on what has been, but looking for opportunities in the future!
References
Abramson, N. R., Moran, R. T., Moran, S. V. (2018). Managing Cultural Differences (10th ed.). Oxford: Routledge. New York, NY.
The Pennsylvania State University. (2021). Lesson 8: South America: Focus on Brazil. Retrieved from https://psu.instructure.com/courses/2146712/modules/items/32847689
https://oxfordbusinessgroup.com/news/how-covid-19-triggered-latin-american-e-commerce-boom
Hello Tiffany,
Thanks for the reply!
I think the point you made ” I believe it is important to understand why individuals are unsure of change because change is needed and change should be viewed as something positive” is key.
The notion of understanding why is the most important aspect. As we have learned in this class, we have to be able to learn why a person may have a hesitancy with something, before we can begin to figure out a solution.
Great point, and good luck this semester!
Bill Egan
Hello,
I enjoyed reading your blog. You provided a great overview of Latin American and how they persevered through the beginning stages of COVID-19. As you mentioned technology has certainly helped many individuals in Latin American purchase goods online for the first time ever. While many of these individuals were perhaps unsure of how secure the internet is, they have recognized that the internet is very beneficial to them. I believe it is important to understand why individuals are unsure of change because change is needed and change should be viewed as something positive.