The consumer
- Consumer Profile
- Chile's population is ageing but remains relatively young. The median age is 36.3 years, and the population is growing at a rate of 0.3% with 32.1% of the population under 25 and 24.6% over 55 years old (Data Reportal, 2022). Households are on average composed of 2 people, the size of the household is in net decrease in recent years. One-person households are becoming more widespread. Regarding the gender ratio, there are 97 men for every 100 women in Chile. The Chilean population is spread out with 87.9% in urban areas and 90% located in the middle of the country around the capital of Santiago and the north. The south of the country is very sparsely populated. The main cities are Santiago, Valparaiso and Concepcion. The level of education in Chile is among the lowest in OECD countries with 32.6% of adults aged 25 to 64 having attained below upper secondary education and 25.2% having a tertiary education (OECD, 2020).
- Purchasing Power
- The GDP per capita (PPP) in Chile is approximately USD 25,110 (World Bank, 2020). The average salary per full-time worker per month is CHP 635,134 (INE, 2020). Because inflation has risen faster than wage growth at the end of the year purchasing power has declined in 2020. Confidence indexes have strongly eroded since the start of the protests, which cumulated with the deteriorating job market weakening household consumption and private investments. The Gini index on income inequality is high but has been declining for several years. Chile has one of the highest gender pay gaps in the OECD, and this gap is even greater for skilled trades.
- Consumer Behaviour
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Chile's consumption no longer serves to meet the needs but denote a certain social status. The country's growth has enabled consumers to have better quality products. Price remains the main factor in purchasing decisions but other determinants are quality, durability, technology, customer service, customer experience, and availability. Despite the persistence of the Covid-19 pandemic and the war in Ukraine, consumer confidence has been on an upward trend since 2021. Purchases are made in bricks and mortar stores but also online. Often, consumers will preview products on the internet before buying it in a store. E-commerce platforms are growing and online sales reached USD 7 billion in 2021 (+23% year-on-year) (ecommerceDB). Consumers are generally open to international brands but may prefer local brands for certain products (such as wine). Chileans are generally not very loyal to brands with nearly 70% expressing their independence from them. Access to social networks is growing in the country but mostly for entertainment purposes. However, some consumers consult brand profiles when they want product information. Chileans generally have enough confidence in the authorities regarding the protection of personal data.
Respect for the environment is becoming increasingly important in consumption decisions. In Latin America, Chile is considered the most aware of environmental issues. Consumers are paying increasing attention to labels on the products they consume. The second-hand market has developed through markets or thrift stores. Collaborative platforms are developing in Chile, like Airbnb and Uber, but mainly in big cities.
Online food and drink sales totaled 1.2 billion and grew by 133% in 2020 (US Foreign Agricultural Service). - Consumer Recourse to Credit
- With regards payments, cash is the most widespread. About 58% of the population uses debit cards while credit cards are used by only 30% of the population. Household debt is rising sharply and exceeds 72% of their disposable income. According to a survey conducted by the country's central bank, 66% of Chileans have debts, divided into 71% consumer loans, 21% mortgages and 7% other debts. Consumer loans finance a lot of education costs, the purchase of cars (80% of car purchases are made through consumption credits), the cancellation of other debts and the purchase of household items. People with low incomes also use consumer credit to finance basics such as food and medical expenses. According to research from Oxford University, Chile is among the high-risk countries because of the sharp rise in private debt. If expansion continues, the authorities may put in place measures to curb credit.
- Growing Sectors
- Dishwashers, kitchen blenders, microwaves, refrigerators, vacuum cleaners, medicines, food supplements, sports products and services, laundry care, car rental, travel, home audio devices, mobile phones, cell phones, beer and cars.
- Consumers Associations
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Asociación de Consumidores y Usuarios de Chile
National Consumer Association
Consumer Association