In recent years, the Peruvian economy has experienced a period of prosperity, the like of which its citizens have not enjoyed for at least sixty years. The main factors underpinning this boomtime are: increased value of minerals such as copper, zinc and tin – all key commodities exported by Peru; the development of more (and huge) mining projects especially in the interior of the country; and the export of non-traditional agricultural products, mainly to markets such as Europe and America. These developments have seen the Peruvian GDP double in the last 12 years, and extreme poverty reduced by 50%, according to the Peruvian Ministry of Economy and Finance.
The improvement in the economic situation has also brought about changes in shopping habits and how the average Peruvian consumes. Households now purchase categories that a few years ago it would have been unthinkable to find in the Peruvian’s basket, such as fabric softeners, light or diet products, and packaged foods. Year by year, consumption of these goods accounts for an increasing market share; nowadays it is about 20% of the Peruvians household expenditure. (It is worth noting that Peruvian housewives have always bought ‘little and often’ and principally through traditional channels – market stalls and local little shops call ‘bodegas’. This is due to the informality that exists in the Peruvian labor market, which means that many families receive their wages daily or weekly, which directly influences buying patterns.
It’s not only the consumer goods market that has been boosted in the last 10 years; the market for new cars has risen from around 40,000 sales in 2003 to over 190,000 in 2012, with young and middle-class Peruvians fueling the dynamism of this sector. The construction sector has also performed robustly, growing at an average rate of 12% in the last ten years, with over 100,000 mortgage loans arranged for the purchase of private homes. Peruvians have traveled more during the last decade too; but whereas in the 80’s and 90 ‘s most of their travel abroad was to seek work and development opportunities, now they travel for pleasure. As a result, the outbound tourism sector of Peru has grown by about 30 % in the past ten years.
However, the population is aware that these boom years have failed to solve some of the structural problems of the Peruvian economy. These include an insufficiency of formal job creation, and the heavy reliance on the mining sector making the economy vulnerable to changes in international prices for minerals. So, there remains a lot to be done, but Peruvians perceive that their economy is still in gestation and anticipate many more years of prosperity, both culturally and economically. They consider Peru to be very much a developing nation, not a third world country.
Fidel A. La Riva Cruz
Country Manager, Kantar Worldpanel Perú