While most of the recent economic news out of Latin America has not been encouraging, our team of analysts have uncovered some curious growth stories peppering the region. When you dive beneath the stratosphere of macro-economic malaise, Latin America is full of vibrant, entrepreneurial green shoots that are buoyed by a consumer base hungry for the latest and greatest. Here’s a quick look at these growth sectors compared to the relative modest uptick that is predicted for Latin America GDP in 2017:
So why are these areas sprouting up? Well, there are structural and societal changes underway in Latin America which by themselves create impressive opportunities for new investors and innovative suppliers. For example, shrinking family sizes and net emigration have created the world’s fastest-aging population and a demographic dividend that keeps consumer spending growing, for now. Modern lifestyles combined with aging is leading to higher chronic disease, hospitalization, and a bigger reliance on pharmaceuticals—a troubling trend to some, an opportunity for the medical industry. The rapid adoption of technology and disintermediation of inefficient distribution models are generating fast growth in e-commerce and new cloud based business models (Mexico City is Uber’s 3rd largest market).
Below we explore a handful of high-growth opportunities that demonstrate the need to dig deep when researching emerging markets.
The Latin American games market grew by 20% in 2016, generating $4 billion in video games revenue, according to Newzoo. With 110 million gamers in Latin America, the region is the second-fastest growing video games market in the world, surpassed only by Southeast Asia. The region is posting solid growth with PC (6% year-on-year growth) and console (9% year-on-year growth) games, but is growing the most with mobile games (56% per annum).
While not as popular as Pokemon Go, capnography equipment is a key tool used in intensive care units to monitor expiratory C02 and respiratory gas. With the rise in Latin America of chronic illnesses such respiratory problems and the region’s strong demand for plastic surgery, there’s been a rapidly growing need for this type of equipment. The compound annual growth rate (CAGR) for capnography equipment in Latin America is expected to be 17.5% between now and 2021, with the LatAm capnography market value set to grow from US$9.7 million in 2014 to $30.2 million by 2021.