Local Brands Face Challenges And Limits

Local brands face challenges and limits

Introduction

Two of the problems that are always present in Latin America are the future insert and the desire to imitate the fashion industries of other countries such as Europe, and that is why local brands face challenges and limits and limits. In fact, the richest people on the continent continue to prefer to buy Zara instead of investing in a piece of a local creator. One of the solutions for these local brands could be to produce locally, but sell abroad thanks to the development of e-commerce.

Developing

The relationship of Latin America with the fashion industry is dual. On the one hand, it is a territory rich in raw materials and on the other, the economic crisis, the inequalities and political movements of the region face a creativity that is inspired by its ancestral roots and in the vision of a contemporary world that Nourishes of globalization and fast fashion. Large local brands continue to face international teachers, so this year they have dedicated themselves to adjusting their strategies and investing in expansion projects of various kinds. Along the way, some of them have not resisted economic attacks.

For example, espargatas, a famous Brazilian company of footwear and sport artigos with brands such as Havaianas, Osklen, Mizuno and Dupé, suffers from this uncertain future. In fact, Márcio UTSCH left CEO’s position after remaining in him for 15 years, in which he made the company the first group of footwear in South America.

The Petrobras corruption scandal in November 2015 tarnished Camargo Correo, the owner of espadrilles, and unleashed that this would pass through different hands, to sell some of the brands, to cut personal and close some of his productive plants. UTSCH will be replaced in the first quarter of 2019 by Roberto Funari that must face the liberal initiatives, protectionist measures and ultra -right -wing policies announced by the president -elect Jair Bolsonaro.

During 2019, the region has received new shopping centers with innumerable square meters to offer both national and foreign brands, it is difficult for local brands to find its place and it is difficult for these large supermarkets to support the uncertain future of Latin America. For example, the Buenos Aires Design Complex of Argentina is on the edge of the closure due to the prohibition of negotiations in foreign currency and import restrictions in Venezuela, this has caused an unemployment in shopping centers that reaches up to 10 % in some cases. Therefore, the future seems uncertain for Latin America, its local brands and supermarkets where these local brands are sold.

• Protecting the emblematic stylistic heritage of Latin America and supporting its fragile artisan ecosystem is a challenge

The fashion industry has a value of approximately 1.2 trillion dollars and use about 4.200.000 people worldwide in a structure that includes both retailers with Zara or H&M international presence for example and thousands of small stores, owned by independent designers. Establish what protection the accessories and clothing receive to protect a stylistic heritage is not always an easy task, there are several elements to take into account and these elements vary according to the region and the country.

Latin American countries have different interpretations in this regard that do not facilitate the protection of the emblematic stylistic heritage of Latin America. In Peru, for example, Indecopi (National Institute for the Defense of Competition and Intellectual Property Protection) developed a copyright guide in the fashion industry. In this specification that clothing and accessories such as gloves, handkerchiefs or hats- may possibly an artistic creation under the classification of applied art work. Despite having the same definition of applied art, the National Directorate of Copyright in Colombia has a very different interpretation. In 2016, Colombia modified that clothing are not protected under the copyright regime. Chile came out these interpretive controversies in 2003,

But that is not enough to protect the emblematic stylistic heritage of Latin America and support its fragile artisan ecosystem is a challenge. In fact, the fashion industry moves and evolves constantly thanks to the creativity of thousands of people, and therefore protecting their works is not a minor issue. The disparity in the laws constitutes an obstacle to this sector, immersed in globalization and that works around international trends. Therefore, protecting the emblematic stylistic heritage is important, especially in regions such as Latin America.

• The long path of e-commerce: a challenge for local brands

Electronic commerce in the region advances at a firm pace with sales of 57 billion dollars in 2019, led by Brazil and Mexico that respond for more than half of this figure. In addition, Latin America contributes about 3 % of world electronic commerce and that this has been possible thanks to the reduction of the digital gap, infrastructure investment and an increasingly bankrupt population. E-commerce is really a challenge for local brands in Latin America.

In fact, fashion is positioned as one of the preferred items for online buyers in Latin America. The category of clothing, footwear and accessories is positioned among the favorites to buy in Argentina, Colombia, Chile, Mexico and Peru, according to a study by the Linio Electronic Platform. 

conclusion

According to the platform, electronic commerce in Latin America is mainly concentrated in Brazil, with a participation of between 42 and 44%. In Mexico, electronic commerce is between 12 and 15% and has warned 59%. In Argentina, for its part, electronic commerce occupies only between 8.9% and 14%. In addition, in less than 10 years an 85% Internet penetration is expected throughout the region, of which about 459 million will be mobile internet users, that is, 2.5 million connected devices. 

Therefore, e-commerce is really a challenge for local brands in Latin America that they want to sell in the region. Electronic commerce is increasingly important for fashion brands because it allows them to design new strategies to approach and conquer world consumers in a more efficient way.