About Chilean Market

Why is it strategically important to have a strong presence in the Chilean department stores?

CHILE IS THE ONLY COUNTRY IN THE WORLD where the credit cards issued by department stores are more units and have more presence and more use than those issued by banks. A payment by Credit card is the most used tool. Actually in circulation :14,61 millions cards. (Chilean Population approx. 17 millions). Bank issued are 5,21 millions with yearly transactions for approx. USD 1,000 million. Department stores and other commercial cards manage a volume of approx. 9,4 millions cards. We are convinced that in Chile to get a powerful penetration in department stores, supermarkets and drugstores is a strategic key issue. Credit cards would allow us to penetrate social economic segments that could buy this product only with credit facilities.

Country’s market overview

Chilean social & economic revolution in the last 20 years:

Deep economic changes in the last two decades have signified a constant increase in the per-cápita income from 5,000 USD (buying parity) in 1990 to 14,700 USD in 2009 (INE-CEPAL), the highest in Latin America. The households under the line of poverty decreased in the same period of time from 38,6% to 13,7% (Casen). Corresponding with that, goods in Chilean homes have strongly increased, starting by the ownership of homes, which increased at the same time to more than 2,2 million. That development creates new social phenomenon, like the single-person home, which has more than tripled, from 400,000 to 1,3 millions.

Another shift of substantial increase is seen in the  purchasing of automobiles, refrigerators, microwave ovens and washing machines for the Chilean homes have changed buying and consumer habits in many categories. Strong incorporation of women to the labor force is the most important social change. 32,5% of Chilean households are actually sustained by women. This figure jumped from 20% to over 50% and in some segments is over 74%, now mainly because of the access of women with university studies. (actually there are more women graduating from universities than men). Those facts have also reduced fecundity and women have postponed maternity from age 23 to age 27.  This has created a new category of consumers (“Dinks”: Double Income No Kids), where those Chilean couples with higher income can  now have access to higher levels of personal expenses and consume, travel  and purchase sophisticated equipment for their homes.

Chilean market overview

Chilean social & economic revolution in the last 20 years:

Another important issue is the reduction of free leisure time for women who work, so time valuation increases strongly and women are seeking products that could facilitate their works / lifestyle. All the above makes us confident that high quality products combined with our strategies, hard work, and enthusiasm, could give us successful results.

Market segments overview

Chilean Households distribution by segments (1: Poorest – 5: Richest)

Segmentation/ Outlook

Chile has been an open economy for the last 20 years and has become an extremely competitive market, where most of the multinational companies have active presence.

Multinational companies have chosen Chile as an introductory laboratory market, with lower risks compared to other bigger Latin American markets such as Brazil and Mexico.

In almost every industry Chile is an ultra competitive market where you can find most of the brands, products  and models.