Online Marketing is Exploding in Latin America

Nowadays the Latin American market is changing. Consumers are changing their consumption patterns and companies are seeing the necessity to adapt themselves to these changes.

And Network Marketing is becoming more and more important in this regard, especially because this business is increasingly being driven online as a result of the Covid crisis.

It is very common to see a lot of companies that offer a new lifestyle, where people can gain high incomes and rewards in return for constant effort. Furthermore, in the past the product portfolio of MLM companies was limited mainly to health and beauty products. However, today the portfolio has expanded to include home, wellness and personal care products, as well as food and financial services.

Direct Selling and Network Marketing has grown and maintained its business thanks to accelerate expansion over the world. Latin America has been very active in receiving this expansion wave. Each year we see new companies and new products being commercialized though networks of people that want to generate extra income. Latin America has become very attractive for this industry and proof of that is that countries like Brazil and Mexico are benchmarks at a global level.

According to the World Federation of Direct Selling Associations (WFDSA) in 2018, Brazil and Mexico were in the top 5 and 7 respectively in an industry made up of more than 100 countries. Brazil with sales of US$15 Billion and Mexico with US$9 Billion are only outperformed by countries like the United States, Japan, China, Korea, and Germany. More surprisingly, is the pace of growth of these two giants of the region. During the period 2014-2017 the growth rate of these countries was 10% and 11% respectively, showing that both maintain a high and stable growth, something that is difficult to find in other industries these days.

Taking a closer look to the rest of the countries in Latin-America and the annual data provided by the WFDSA, you can see that there is more positive information about the region: Colombia, with annual sales greater than US$3.1 Billion and a growth rate of 20%, the highest growth rate of the region followed by Ecuador with 17% and Peru with 16%.

The enrolment rate of new consultants is also encouraging, as this is one of the most important industry variables. In this regard, Colombia is also the leading country of the region with 16%, then comes Ecuador with 14% and Brazil with 10%.

To establish a comparison, the United States, the number one country of the industry, has annual sales of US$38.5 Billion and its growth rate during the period 2014-2018 was 4%. This number is not far away from Latin America, a region with total sales of US$34.1 Billion, but with a growth rate of 11% in the same period. This data shows that Latin America is clearly becoming a major force in the MLM Industry.

Certainly, the industry will remain on the rise in Latin America and new companies will transform their traditional commercial channels into MLM systems. Even those with LatAm origins such Natura/Avon from Brazil and Belcorp and Yanbal from Peru.

Underling these trends is the rapid adoption of online tools designed to make MLM teams more productive. ProSoft, is leading the field and has already introduced its AI-driven automated marketing software to a number of leading distributors in Mexico, Colombia and Peru.

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