In the next couple of weeks, I will be moving back to Latin America after living in Australia for a while. Knowing how fast things change in my home continent, I decided to do some marketing-related research on the online industry in this part of the world and share it with you guys.
If we sit and analyze for a while the world that we live in today, we could argue that if we ranked growth in both a macro and microeconomic level, there is one thing that would definitely be in the charts: growth of e-commerce in emerging markets.
The reason to this hypothesis is that emerging markets have the highest growth rates of new internet users in the world. In Chile for example, more than 50% of the population is online, and each year, Chile’s online market grows more than 15% on average, making Chile one of the fastest-growing online markets, not just in Latin America, but in the world.
This has a huge impact on companies that have a strong online presence. Google for example, is used by 9 out of 10 people in Chile with three main purposes: find relevant information, entertainment and to compare specs and prices.
In case you haven't guessed yet, yes, I’m moving to Chile; where B2B e-commerce totaled US$426 million in 2000, and B2C e-commerce rose to US$35.7 million in the same year (57 percent of which went to local online retailers).
Taking these numbers into account (growth and size of the market), we realize that companies such as Google and facebook, that ranked first and second as most visited internet property with 6.8 and 6.2 million visitors respectively this year, should be quickly and effectively trying to penetrate these culturally conservative markets using marketing techniques that educate both businesses and customers on the benefits and developments of online transactions and online advertising in order to increase their revenues.
Having lived in Chile for almost five years, one of the things I noticed is that in comparison to other emerging markets in South America like Colombia or Mexico, the Chilean customer is not yet as comfortable making online transactions due to a constant fear of identity theft, hackers, lack of trustworthy sites and mostly, like Geert Hofstede would have said, cultural resistance to change and high uncertainty avoidance. But with time and education, this is rapidly starting to change, and companies that have a strong online presence should be the trigger of this revolution.
Today, Chile has one of the highest Internet penetration rates in the region. This opened the door for new creative ways of online advertising, to an extent that in the year 2010, online advertising reached growth levels of 28.7% and there is an estimated growth of 35% for 2011, in an industry worth US$ 37,5 million at the moment but where there are still very few competitors.
The beauty of this is that, in a segment of the industry that is only 3% of the total advertising industry in this country, there are more and more businesses every day that realize that online advertising solves many of the issues that marketers come across when planning and reporting on their campaigns. It presents them with the means of offering tailored advertising to a highly segmented and effectively potential market, as well as paying only for those ads that we are 100% sure that reached our customers. Unlike TV, print media and radio advertising, online marketing solves the issues of calculating accurately the return on investment of each campaign as well as the possibility of instantly improving or even cancelling those campaigns that are not working effectively in line with the campaign goals or intentions.
Every business in the world should understand one thing. Every day, there are more and more potential consumers just an arm’s length away through the internet, and every day, more and more consumers realize the benefits of e-commerce and start using it as their main source for commercial (in particular retail) transactions, so at marketingabierto.com we ask, What are you waiting for?, give it a try and add online advertising to your communication strategy.
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Interesting facts that inspired this blog entry:
- YouTube led as the most-visited Entertainment destination with visitors averaging more than 2 hours on the site during the month.
- The average internet user in Chile performed 144 searches in May (2011), one of the highest rates globally. Google Sites dominated the search landscape capturing nearly 86% of the market.
- Google Sites led as the most-visited Internet property in the market, reaching 95 percent of all Chileans online. Facebook.com ranked as the second-most visited property reaching 6.2 million unique visitors, followed by Microsoft Sites which reached 6.1 million visitors.
- In 2011, Latin American search engine inquiries grew 21% in comparison to the previous year, reaching more than 18.5 million searches and resulting in more than 165 searches per person every month.
- Latin American Search Engine Market Share (page views):
- Google : 72%
- Yahoo : 17%
- MSN : 2%
- Local Players (eg, Busca Pe in Brasi) : 9%
- Most Active Industries in Latin Search Marketing:
- Retail
- Local (Classifieds)
- Travel
- Finance
- Automotive
- Newspapers are seeing that their traditional audience is leaving their websites and using more of Yahoo & MSN. Therefore, local newspapers are expanding their search marketing across major search channels.
- The cost per click price in Latin America is relatively much lower than that of the US.
- Latin American search growth is at 16%, second only to the Middle East.
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