Why Companies in Latin America Are Going Online for Business Expansion?
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The current state of the world has altered the way in which companies, countries, and interconnected economies conduct business. With physical spaces now accompanied with taboo and public health fears concerning the pandemic, individuals and businesses are resorting to going online. The sudden demand in online business platforms didn’t catch too many by surprise though. Many business expansions had already migrated towards going online. Notably, companies in Latin America were, and still are, going online for business expansion.
Business expansion in Latin America is increasing tremendously. Both domestic and foreign businesses are experiencing great success with operations in their current capacity. Given the global pandemic, physical expansions to other markets aren’t feasible. The next best approach is for these businesses to turn to going online. There are countless benefits and opportunities these companies can, and are, realizing since expanding online. Below, we dive into the recent trends and the future of business expansion in Latin America: online business expansion. We will then give insight into some of the many benefits of going online for business expansion in Latin America.
Going online: The future of Latin American business expansion
Business and commerce in Latin America have changed dramatically over the past two decades. Now more than ever, individuals and businesses are turning to the internet for answers, goods, services, and information. This apparent trend was uncovered in a 2020 Statista report, which notes that Latin America had 267.4 million digital buyers in 2019, up 110% from 2016. Experts are predicting this figure will continue to increase by 31% by 2024. Stark growth and adoption of smartphones, social media, digital marketing, online businesses, and e-commerce are prime examples of why Focus Economics named Latin America as the World Leader in eCommerce Growth in 2018. With high expectations and predictions regarding the e-commerce world in Latin America, it’s no wonder business expansion is shifting online.
Businesses are, and will continue to be, going online in Latin America for their expansion because they see the writing on the wall. As consumers, businesses, and government organizations move online, so do market opportunities, as well as market threats.
The future of business expansion in Latin America is online because of this drastic shift in consumer and business activity. Businesses will follow wherever consumers may go. Thus, as greater percentages of Latin American populations adopt online presences, practices, and purchase habits, so will companies. This opens the door for great market opportunity because there is greater, more feasible, access to diverse target markets and potential clientele. Notably, domestic and foreign-owned startups in Colombia have seen some of the most rapid adoption and incorporation of online and tech in their business models. As a result, they have greater access to domestic and international customers and clientele.
There are also market threats that come from the future being online. These become especially apparent if one doesn’t follow the trend. Not capitalizing on the opportunities that accompany business expansion online means your competitors will have greater contact, communication, and possibly better relationships with the target market. Going online for business expansion in Latin America will soon be an inevitable component of a business.
Benefits of going online
As mentioned previously, online business expansion has a prominent presence in Latin America’s future. Those planning on growing and expanding their business should entertain the idea of going online. There are countless benefits and opportunities that companies can realize when they expand their reach, impact, and brand to digital mediums. The following are just a handful of the many reasons why businesses should incorporate going online into their business expansion plans.
Build brand awareness
The first of many benefits of online business creation and expansion is building brand awareness. A strong online presence and brand can be achieved through a handful of digital marketing tactics. Using search engine optimization, keyword bidding, display ads, email marketing, and many types of content marketing, your business can drastically increase overall awareness within its target market. Moreover, these measures and means of contact with the consumer foster a relationship between them and the business. It is not enough to simply be aware of a brand nowadays. Rather, a connection and relationship between the company and the consumer is what businesses should strive for. Going online is the first step in both building brand awareness and expanding upon that relationship with the consumer.
Decrease average CAC
Another advantage to online and digital expansion is that it invariably decreases the average customer acquisition cost (CAC). While getting started on your online business can take a lot of time and money at first, over time your costs decrease substantially. This is because all marketing and branding efforts you put out online feed off of each other. This means that the more content you produce at a high quality, the more exposure and interaction you’ll get. Ultimately, coupled with a seamless sales cycle, you’ll acquire more clients than before. The more clients you get, the less the acquisition costs are per new client.
Moreover, CAC can decrease not only to higher volumes of customer acquisition, but also because online marketing tools and tricks can be very cost effective. Firstly, most online marketing efforts are inexpensive and/or free compared to traditional means of marketing. Cost per click (CPC) ads, keyword bidding, and search engine optimization (SEO) are some of the cheapest means of growing your business online. Additionally, they reach larger audiences. A cheaper price paired with greater reach means a higher return on investment in your marketing efforts.
Business expansion means growth for your personal brand
Your business expansion in general can be great for your personal brand. However, going online for expansion yields much stronger, more impactful outcomes. The digital content you and your company create all tie back to your name and online personality. This builds up your personal online profile, expertise, credibility, and overall personal brand image online. Moreover, the more you use your accounts to repost, share, and spread the content from your business, the more people will interact with both your profile and your business’.
Another way you can contribute to your online business expansion and your personal brand is through guest posting. Guest posting is incredibly important and useful. It puts your voice, ideas, name, and even sometimes your business, on a third-party site. Here, you have access to the site’s audience. This level of access and interaction increases your chances of acquiring new clients. It can also be a crucial piece in refining and growing other aspects of your online brand image, digital marketing strategy, and your overall business.
Grow your clientele portfolio strategically
Going online means that you have access to a new stream of marketing materials and new means of communicating with your target audience. Using the aforementioned online marketing tactics, you can not only increase your brand exposure and awareness, but also strategically target your market. Traditional means of advertising and marketing tend to target broader audiences, which ultimately dilutes the message of the ad. This results in smaller conversion rates, ultimately increasing the overall CAC. However, going online and assembling a team of professionals means you can target the individuals and businesses that fit within your target market. Using optimization techniques, analytics, digital marketing tests, sitewide tags, and targeting metrics, your online marketing strategy will reach only those that qualify as your target market. Strategic targeting is foundation for a solid online business presence and marketing success.
B2B business opportunities
Finally, going online for business expansion for companies within the business-to-business (B2B) sector is incredibly important. If you do not already have an online business presence within the B2B sector, take the steps towards developing one today. Not only will you be able to better service your current clients, but you will have a much better chance at finding, attracting, and securing new clients. Moreover, expanding onto an online platform can help you manage orders, supply chain processes, and how your business partners/works with other B2B companies.
Companies in Latin America are experiencing growth and expecting a promising future ahead. To take advantage of the changing business climate, these companies are going online as part of their business expansion. By doing so, they have greater access to their target market, objectively larger access to a greater number of people, and prove their business to be modern and ‘with the times.’ There are many other benefits to going online nowadays aside from reaching one’s target market. The culmination of benefits and opportunities paves a digital path towards success and high levels of market penetration. Any business in Latin America that is not already online should pursue it as an inevitable, necessary course of action. Those that are online should continually optimize their marketing strategies and approach.
Source: Craig Dempsey
Co-Founder & Managing Director | Biz Latin Hub
Post available in: English