Christmas Spending in 2020 for Latin America, Festive but Austere

    The emergence of COVID-19 wreaked havoc on all economies

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    Talking about consumer behavior during Christmas 2020, it must be analyzed the impact that the Pandemic had on people at work, economic, social and personal level. The changes have been so profound that it remains to be seen which trends have come to stay and which could change again, depending on what happens during 2021.

    We know that the emergence of COVID-19 wreaked havoc in all economies, but according to the ILO (International Labor Organization), “Latin America and the Caribbean mark a historical record of 41 million unemployed, as a result of the Pandemic. Chile, Brazil, Mexico and Colombia are the most affected countries in the region”.

    This puts the population on high alert, given that the main engine of Latin American economies are local SMEs, which do not have the financial backing of a multinational, and the restrictions of social isolation left many bankrupt.

    If to this is added the gastronomic sector, shops, construction, tourism enterprises and the population that works in the informal economy, all inactive for 6 months, the possibility of economic recovery looks really far away.

    But the celebration of the Christmas holidays is so deeply rooted in the region that, although the Pandemic, the celebrations, even more austere, are still present in most homes. The strong influence of the Catholic Church, the warm weather and the beginning of the holidays in many of the Latin American countries, are factors that lead Latinos to come together and celebrate, whatever happens.

    Less money for Christmas spending

    According to the survey carried out by OBS Business School, almost 70% of those surveyed stated that this year they not only allocated less money for gifts (USD 20 average), but their total budget was less than Christmas 2019. Only 7% reported spending more than $ 100 per gift, and only 11% said their total spending was greater than the previous year.


    But the most relevant change has to do with the purchase channels: a resounding 80% confirmed that they made (or will make at the last minute) most of their Christmas purchases online. This change was driven by the restrictions imposed by the Pandemic, which forced millions of people to telecommute (many had their first experiences of digitization), and to carry out paperwork and banking transactions over the Internet.

    With this training and the need to stock up without leaving their homes, Latinos were finally encouraged to put their credit card on the payment platforms to make purchases in supermarkets. And encouraged by the good experience, they continued to buy online, technological equipment, articles for physical exercise, objects and furniture to generate greater comfort in their homes, and a long list of products that they would never have thought to buy before through a marketplace or on Instagram.

    The use of the credit card was the main obstacle for e-commerce to take off throughout the region, given that in most countries the payment in cash was preferred by the population and, although the penetration of credit cards was high Until February 2020, the consumer distrusted online platforms for fear of fraud and information theft.

    This new reality that we are experiencing forced online purchases by credit card and greatly minimized cash payments due to the fear of contagion through bills that had passed through thousands of hands.

    Alternative buying

    This immense change in behavior in the way of buying made micro-enterprises with “delivery” proliferate, offering payment through platforms such as Mercado Pago, and other alternatives throughout the region.

    For this reason, the vast majority were able to take advantage of the Black Friday and Cyber Monday discounts by anticipating their Christmas purchases (for many it was their first time), and achieve the goals of filling under the Christmas tree, as every year, but with much less money. Shopping preferences focused on practical items, such as clothing and footwear, household items, and toys.

    It is possible that the turnover for Christmas purchases will drop compared to 2019, but with a medium and long-term vision, if there is something to celebrate the retail sector in Latin America is that it now has millions of new eConsumers who have taken the pleasure to buy online. Without a doubt, a unique opportunity for the development of e-commerce throughout Latin America.

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