Navigating the Latin American distribution systems is equally complex. The retail market is estimated to reach $1 trillion by 2010 and the channel structure is changing constantly on the way. Currently, the informal economy remains the most important channel for the distribution of goods to customers. For example, 50% of all FMCG brands move through this channel and this is largely to do with Latin American Governments abject failure to streamline formal business regulations many of which are so opaque and complex that they provide a platform for corruption which in turn compounds the problem. Catch 22. A typical business in Sao Paulo reports 7 different taxes four times a year. Despite the economic boom 93% of all jobs created are in the informal sector. [i]

 


[i] Treewater. Logistics Today. (September 2007)

The informal market does not lend itself to a one size fits all distribution system. On the one hand, we have the issues raised by crowded urban environments and, on the other, the issue of access to highly dispersed and remote rural communities. The cost of reaching each consumer varies greatly and this is where the field marketing and neighbourhood based sales initiatives covered above can be so successful.  

(more…)