Colombia is one of the Latin America’s most exiting recent success stories with sustained GDP growth is expected to reach 3.5% by 2022. Economic resilience and higher earning capacity have been borne out of sound economic policies, and market areas like Agriculture, Transport, Financial Services, and Construction show most promise for immediate growth.
With a population of around 49 million people, Colombia is the third most populous country in Latin America (after Brazil and Mexico). It is expected to be home to 50.2 million people by 2020, and 55.3 million by 2050.
Consumer expenditure was worth nearly USD$180 million in 2016 (up from USD$115 million in 2010; 56% growth), or USD$12,000 per household, and with an expanding middle class in a country whose population are better paid than many neighboring countries, now is an ideal time to invest.
The average age in Colombia is 30, with nearly 42% of the current population aged between 25-54; while around the same proportion are younger than this (0-24). Only 7.44% of Colombians are over 65 years old. Most live in the north and west of the country where natural resources and positive agrarian conditions can be found. 17% of the population works in agriculture, producing coffee, flowers, bananas, rice, tobacco, corn, sugarcane, and cocoa beans. Meanwhile land swathes of the south and east, largely grasslands covering 60% of the country’s landmass, are only moderately populated.
The male/female ratio is almost equal in Colombia, although the women tend to outlive their male counterparts, by five and a half years. While the average family had around six kids in the not so distant past, nowadays the typical family is likely to have two children. 4.5% of GDP is spent on education, and Colombia boasts over 94% literacy.
77% of the population lives in urban settings, with nearly 1.5% more moving to cities on an annual basis. Nearly 20% (9.7 million people) of Colombians call capital city Bogotá home, while nearly four million are based in Medellin, and more than three and a half million live in Cali. Barranquilla is home to nearly two million people, while Bucaramanga and Cartagena host 1.2 million and 1.09 million people, respectively.
62% of Colombian are employed in the services industries, while 21% works in production industries, producing textiles, food processing, clothes, footwear, cement, gold, etc.
Most international brands focus their efforts on the three largest cities, and it’s true that it is there that you will find most media hubs and PR and marketing agencies, but the best Colombian PR agencies also recognize the potential beyond these regions.
Depending on the product or service to be offered, it may be profitable to also focus on smaller cities. A well-informed and well-connected PR agency in Colombia will ensure that you approach the market in the manner that will prove most efficient for your company.
As the Colombian GDP steadily increased in the last decade, so too did the middle class, which represented 15% of the population in 2002, and had jumped to 35% thirteen years later in 2015. With an economy showing sustained growth of between 4-7% year on year for the past decade, Colombia is one of the fastest growing economies in the region. While around seventeen million Colombian people are now considered middle class, there are still only around 3% (around 1.5 million people) in the high-income bracket, thus making price sensitivity of importance to this market, an important consideration for any PR or marketing strategy in the region.
Taking to the Skies
Air travel is becoming increasingly popular for Colombians, as highway infrastructure still needs much improvement. Journeys between cities that would take between 7-18 hours can be completed in under an hour by air. 35.6 million Colombians took to the air in 2016, showing a growth of nearly 5% since the previous year. Twenty-five regional airports are being improved to meet market demand, as are national airports, with the Colombian government investing around USD$1 billion in airport modernization. Roads and highways are being improved too, albeit rather slowly, under Public Private Partnerships. Improved roads will greatly reduce operational costs for companies needing to move cargo over land between ports and cities.
Some of the biggest national companies include Grupo Empresarial Antioque’no, a conglomerate of more than 100 companies; Grupo Argos, a conglomerate in the cement and energy industries; Grupo Exito, South America’s largest retail company, founded in Medellin as a family fun textile company in 1949; Grupo Aval, a holding company focused in a wide variety of financial area, like real estate, banking, telecommunications; financiers Grupo Bancolombia, oil and gas Terpel, petroleum producers Ecopetrol, and aviation giant Avianca, to name but a few.
National and international franchises are gaining traction in Colombia, and franchises have doubled in the last decade, with further growth expected, particularly with foreign brands, which currently dominate 52% of the franchise market. US companies owned 23% of the franchise market in 2014, European brands have around 20%, while some Latin American brands are also demanding market share (Brazil, Argentina).
30% of franchises are in fashion and clothing; fast food answers for around 20%, followed by specialty shops in third place with 15% of market share. 12% of franchises are held in retail, while cosmetics and health franchises represent 8%. Services franchises are only beginning to show positive results, albeit more slowly than in other direct retail areas, with health, education and training dominating market share.
Wealthier Colombians tend to veer towards foreign brands, showing familiarity with and openness to novel concepts and concepts being imported from overseas. However, with clever PR campaigns to ensure maximum market awareness, several franchises are showing relatively quick market dominance in lower demographics, combining quality with affordability.