This report analyses the performance of direct selling in Latin American markets, considering how the different product categories perform within this channel. It also explores the competitive landscape, addressing initiatives from players with both domestic and regional operations. Lastly, it features expectations for the 2018-2023 period, especially regarding beauty and personal care direct selling, which is the leading product category sold via this channel.
Direct selling in Latin America is strongly impacted by the performances registered in Brazil, Mexico, Colombia and Argentina. Direct selling in these countries, in particular in Brazil, relies heavily on the performance of beauty and personal care products; therefore, any significant movements registered by this category, such as consumers migrating to drugstores, has a marked effect on total regional figures.
The economic slowdown in several countries in the region during the review period led to a deterioration in labour market conditions and affected consumer confidence, with a negative impact on expenditure. Consequently, large direct sellers saw a decrease in sales, owing to a drop in the number of orders, mostly resulting from consumers trading down and migrating to other channels.
While direct selling is negatively impacted by lower consumer expenditure, it benefits to some extent from periods of economic turmoil, as it typically represents an alternative means of earning some income during times of financial constraint, and even a career opportunity.
Direct sellers going multichannel
Competition from other channels, such as internet retailing and drugstores, is a factor in Brazil, Uruguay, Mexico and Chile, in particular. Players are thus diversifying their channel coverage by going online and opening physical stores. Nevertheless, the role of the seller is still a central part of their businesses.
Besides focusing on the customer’s perspective, companies are implementing online tools to provide training and support to sellers at a lower cost, as well as to engage them and cement their brand loyalty.
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