In Latin America small “mom and pop” shops have a larger retail market share than big chains. For SCA, being active in the region since 1980, this is something to take into consideration.
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Agustina Buitrago works in La Candelaria. For decades she has owned a small tienda.
Gilberto and Gloria Montaña are tienda owners in the traditional neighborhood of La Candelaria in Bogota.
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Local joint venture partners
Latin America is vastly different to Europe, where SCA once started its activities. Consequently, a collaboration with joint venture partners such as Familia di Colombia has been of great help. They know how the local communities work, while SCA is strong at manufacturing, marketing and technology.
SCA together with its joint venture partners have achieved a stable presence in Latin America. The strategy is to reach out to the "traditional" market, where SCA and Familia have created a distribution system for the small “mom and pop” shops, or family-run tiendas.
Covering the neighborhood’s daily needs
These small family-owned stores are an important part of the Latin American lifestyle. They sell everything for the neighbourhood’s daily needs. Most customers buy only what they need for the day, such as a single roll of toilet paper, and one or two baby diapers.
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FACTS - SCA IN LATIN AMERICA
Number of employees: 5,000
Operations in Mexico, Central America, Dominican Republic, Puerto Rico, Colombia, Chile, Venezuela, Ecuador, Peru and Bolivia.
Products: Personal care & tissue. |
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“Altogether these small shops represent a larger portion of the market than the large supermarkets, so it is a big business opportunity," says Jan Schiavone, president of SCA South America.
Brand trust
It is also important that consumers trust the brand, especially among the poorer population.
“These people have very limited resources. They can’t risk trying cheaper, less well-known products, so they stick with the high quality, consistent brands. They can’t take a chance on something they’re not sure about, because they can’t afford to make mistakes,” explains Jan Schiavone.
Text Juan Camilo Maldonado Tovar / William Caiger-Smith / Marita Sander Images Diana Sánchez Source Shape 2/2009