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Stampede: The New Digital Middle Class in Argentina, Brazil & Mexico

On October 26, 2010, In a-bric, creative class, entrepreneurs, foreign investment, technology, by InvestBA
The New Digital Middle Class in Argentina, Brazil and Mexico

Stampede: Razorfish and Terra chart the rise of the New Digital Middle Class in Argentina, Brazil & Mexico.

An excellent report from Razorfish and Terra is out this week with some eye-opening statistics and observations about the rise of the New Digital Middle Class (NDMC) in Argentina, Brazil and Mexico.

“Never have we seen such a rapid change in the digital evolution of a region like we’re seeing unfold in Latin America now,” begins the report titled A Debandada (The Stampede). While the Portuguese title is an unmistakable nod to Brazil (BTW, on pace to become the world’s fourth largest economy by 2020), the purchasing power and preferences of C-class consumers earning between $700 and $2,000 per month are examined in all three countries.

So what do they want? Smartphones, but not “smart” in the sense of expensive iPhones and Blackberries with tons of features they don’t need. C-class smart means an affordable Internet-enabled device with a camera, radio, mp3 and, increasingly, TV.

But what about the expensive carrier charges? Fear not, the NDMC are as street-savvy as they are status-conscious, so they often piggyback free Bluetooth connections to share content like new movies and video games, often purchased on the street for a few pesos.

Obviously social media is a major draw for the NDMC, and it plays a pivotal role during the Discovery phase when they first realize “the entire world is at their fingertips.” According to Stampede, 71% of Argentines use IM, 8.1 million are on Facebook and Twitter is gaining momentum, although the rise in Brazilian tweets is something of a regional phenomenon, as recently explained in Time. The full Stampede report is available now on SlideShare.

For more news on the Argentina tech sector, visit our archives and download the new issue of InvestBA Privada.

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Santander Sees the Future in Argentina, Brazil, Latin America

On July 19, 2010, In a-bric, foreign investment, franchises, visionaries, by InvestBA
Santander Branch in Buenos Aires

With 37 million clients and 5,800 branches, Santander is the leading bank franchise in Latin America.

If you had any doubts about where the smart money is moving globally, you might want to take a look at Grupo Santander, the largest bank in the Euro-zone and one of the largest banks in the world.

In recent interviews with everyone from Bloomberg to El Pai­s, Santander officials are understandably bullish on Argentina, Brazil and Latin America in general…so much so bank executives feel the region will outperform Asia in the coming years.

Santander’s Director for the region Francisco Luzon sees the XXI century as Latin America’s inflection point: “In this century, Latin America will move beyond being a ‘developing’ region. Latin America has talent and structural competitive advantages that will make it a winner in the XXI century.” Luzon believes Latin America is the region best positioned to benefit from the process of globalization, while banks like Santander are well positioned to capitalize on the continued bancarizacion of LatAm.

Santander estimates the financial systems of the seven core Latin countries, Brasil, Mexico, Argentina, Chile, Peru, Colombia y Uruguay, have a current valuation of US$500 billion and could reach $1 trillion by 2015. If full-year projections for 2010 are any indication of what’s to come, it’s easy to understand why a bank like Santander sees the future in Latin America. According to Bloomberg, the region will account for 45% of the bank’s profit this year, up from 39% in 2009.

For more information about investment opportunities in Argentina and Uruguay, download IncomeBA and the new issue of InvestBA Privada.

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World Cup 2010: A Tale of Two Brackets for Argentina, Uruguay

On June 25, 2010, In arts & entertainment, competitiveness, lifestyle, by InvestBA
World Cup Round of 16

Argentina and Uruguay are both four wins away from getting a third star for their jerseys.

“Europe in Decline While Latin America Shines” was the headline three days ago, as France, Italy and Greece were on the verge of elimination from the 2010 World Cup. Meanwhile local favorites Argentina and Uruguay took care of business in unselfish, workmanlike fashion, as did other Latin American teams: Brazil, Chile, Mexico and Paraguay will all make the cut.

Now Argentina and Uruguay find themselves in Round of 16 brackets that couldn’t be more dissimilar: Argentina’s reads like the Pantheon of Futbol Legends (England, Mexico & Germany) while Uruguay’s reads like a random seating chart at a Model U.N. conference (Ghana, Korea & U.S.A.).

One group has tallied 56 World Cup appearances, 17 Top 4 finishes and 6 World Cup victories; the other group’s stats are padded by Uruguay’s World Cup appearances (10) and wins (2). Since InvestBA focuses on investment opportunities in Argentina and Uruguay, we find the level of local fan confidence going into this weekend intriguing to say the least.

Despite their Pantheon positioning, confidence runneth over among the Argentine press and fan base. Pictures of Maradona sporting shades, headlines like “Vote of Confidence” and stories of fans of the Albicelestes already pushing back their return flights abound. In stark contrast, the Uruguayan fan base seems more reserved and respectful of their future foes. In fact, you can’t find a single story about the Seleccion Uruguaya today on the sports page of El Pai­s.

While Argentina speaks with the swagger of the ‘Canes, Uruguay settles for the occasional tweet from Forlan. Two different teams. Two different approaches. Two different chances to make history. We wish them both well and offer our predictions for this weekend of all weekends.

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Twitterando: Buenos Aires Companies Slowly Tap Social Media

On May 12, 2010, In creative class, franchises, technology, us companies, visionaries, by InvestBA
Starbucks Argentina on Facebook

Companies like Starbucks Argentina are taking the bold first steps in BA business social media.

While Facebook, Twitter and corporate blogs are de riguer social media tools for U.S. brands, the phenomenon is a relatively nascent one in Argentina according to an in-depth article by Florencia Radici for Cronista.

It’s hard to pinpoint whether the Web 2.0 reluctance is motivated by fear of losing control of the message or the heavily flawed assumption that what they, Empresa X, have to say is more important than what consumers of Empresa X have to say and share with fellow users and potential Empresa X converts.

Yet major Argentine brands with hundreds of outlets and millions of customers either have no social media exposure or only a handful of followers on sites like Twitter. In fact, Argentina doesn’t even show up in Twitter’s global ranking on Alexa, while other Latin American countries account for a sizable percentage of the microblog’s traffic: Brazil (3.2%), Mexico (1.5%) and Venezuela (0.7%…thanks to El Loco Chavez, the Ashton Kutcher of Caracas.)

Fortunately Radici says some BA companies are biting the social bala and engaging with customers via blogs and social networks. Many of these companies like Starbucks Argentina, Officenet Staples and IBM have U.S. ties and managers previously baptized in the waters of social media.

Despite a slow start, Radici says BA companies are starting to warm to the idea of online customer engagement, and she points to two recent examples of BA2.0 brilliance include Nike runners twittering in the October 10K and Park Hyatt guests twittering with the concierge. (Full story in Spanish)

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Housing IPO Highlights Pent-up Demand

On March 10, 2010, In foreign investment, real estate, by InvestBA
TGLT Real Estate Buenos Aires Argentina markets Forum Puerto Madero

Wealthy Argentines prefer cash when buying high-end properties like TGLT's Forum Puerto Madero.

It’s been almost two years since the Argentina stock exchange celebrated an IPO, but local homebuilder TGLT is ready to end the BA Bolsa’s offering drought.

The Wall Street Journal’s Matthew Cowley reports, “TGLT plans to raise between $50 million and $70 million from an initial public offering of shares, equivalent to about 30% of the company’s total capital. About half of the shares are expected to be sold in Argentina and the rest to foreign investors.”

TGLT and other Argentine real estate companies have waited patiently on the sidelines while private developers in Brazil, Chile and Mexico have raised close to $3 billion in equity capital since 2003. Cowley says TGLT “seeks to emulate the considerable success that home builders have had in (these) Latin American countries…meeting the massive pent-up demand for housing.”

Brazilian firm PDG Realty referenced this “pent-up demand” in a PowerPoint presentation back in 2007 when they purchased a stake in TGLT. Explaining the high-end preferences of the BA market, Jose Rozados of real estate journal Reporte Inmobiliario says, “Wealthy Argentines often eschew the banking system and financial investments, and instead buy property.

They aren’t highly speculative investors nor are they looking for quick returns. That makes them fairly solid.” Another bullet point worth considering for foreign companies contemplating joint ventures with Argentine homebuilders: 90% of high-end homes bought in Buenos Aires are cash transactions. A nice change of pace from the mortgage meltdown landscape abroad.

For more information about Buenos Aires real estate opportunities, download IncomeBA and the new issue of InvestBA Privada.

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