Once considered a continent of third world countries, South America has attracted attention from global investors over the last few decades for its emerging markets and rapidly growing economies. In fact, the continent’s largest economy Brazil is so famed for its economic growth that it has claimed its place at the start of the BRIC acronym as one of the four major countries recognised as some of the world’s fastest emerging economies (the others being Russia, India and China).
So where do the opportunities lie in South America and could your business benefit?
A growing economy
Continued economic growth isn’t uniform across the continent of South America. At the top end of the scale, the economies of Brazil, Argentina, Colombia and Chile are some of the best performing. The former of these is in fact the world’s ninth largest economy – not far behind France, India and the UK.
But in recent years, the crisis in Venezuela has attracted headlines after the country fell into one of the deepest economic recessions seen in modern times.
Much like major Western economies, South America as a whole was profoundly shaken by the financial crisis, and the continent as a whole has only managed to get its economies heading back towards sustainable growth in the last couple of years. In Brazil in particular, lower inflation and interest rates, as well as a move towards a more market-based economy, have brought growth back into positive figures.
For companies considering a South American expansion, the promising potential displayed by South America’s biggest economies is attention-grabbing. Add to that the fact that the continent is dominated by the world’s second most widely spoken language, Spanish, and its close relation, Portuguese, and you’ve got a promising candidate for your next market.
What do they make – and what do we sell?
Despite growing faster than many other major world economies, much of the continent’s exports are based on the manufacturing sector. In fact, 28.5 per cent of the continent’s economy is based on manufacturing exports.
Agriculture and mining also constitute considerable chunks of the remaining 71.5 per cent, with South American agriculture constituting 10 per cent of the global market share, and a third of global copper production deriving from Chile alone.
As these economies grow, there’s every chance that, like Western countries, they could balance out their manufacturing base with more service-based businesses. In fact, over the past 10 years in Brazil, this precise change has started to occur, with a far greater percentage of service businesses taking up the country’s overall market share.
But what will the next step be? We’re not alone in anticipating a growth in demand for more established B2B services from overseas. The question is: will your business be among the companies to fulfil this demand?
If you’re exploring the South American market, good localisation of your marketing content will play a significant role in improving your chances of success. Speak to Bubbles today about our professional language translation services and find out more about how we can help.