Business Opportunities in the American Hispanic Market | Business

0

As part of the company’s expansion plans, Medalla Light, the well-known Puerto Rican beer, will now be available in 12 states and the District of Columbia. Agribusiness Lettufresh, through its alliance with Walmart Puerto Rico, now exports its locally grown lettuce to Walmart stores in the United States. Meanwhile, Marvel International’s “El Gordito” burger has doubled its presence, from 100 locations in the United States to 200 in states like Florida, New Jersey and Connecticut.

As reported by THE WEEKLY NEWSPAPER, these are just a few of the Puerto Rican companies that have successfully exported to the US market in recent years, some with a focus on the Puerto Rican Diaspora and the wider Hispanic market. But a study points out that these business opportunities for locally made products are also relevant for the island’s savings and credit unions, as they may also capture a portion of the Hispanic market that does not yet have banking services.

Other growth opportunities for Puerto Rican co-ops include using technology to expand their customer base, diversify digital products, and penetrate Millennial and Gen Z markets, without neglecting senior services.

These were the main recommendations of economist Leslie Adames, director of the Economic Policy and Analysis Division of Estudios Técnicos Inc., in a recent presentation to the Puerto Rico Credit Union Executives Association.

“Although the Puerto Rican diaspora has grown, it represents only 9% of the 61 million Hispanics residing in the United States in 2019. By 2040, the population of Hispanics is expected to reach 87.6 million, or 23% of the population of the United States. The Hispanic market represents an opportunity for cooperatives. 21% of the Hispanic population is underbanked and 9% unbanked, according to a 2020 Federal Reserve report. Personalized treatment and a focus on customer service would position co-ops as attractive financial institutions compared to commercial banks, ”said Adames.

Only 4.2 million Hispanics are cooperative customers in the United States; this is a market penetration of only 6.8%, he said. “This population has an average income of less than $ 25,000 and a high school education or less, so financial inclusion is important as many opt for other financial service alternatives such as pawn shops, banking services. ‘check cashing and payday loans,’ added Adames. .

Growing Puerto Rican Diaspora

In the case of the Puerto Rican diaspora, they have greater purchasing power than other Hispanics, but many live in rented accommodation, he said. Since 2000, the number of people of Puerto Rican descent born in the United States has grown to 5.6 million. The number of Puerto Ricans born on the island who emigrated rose 27% to 1.6 million. The states most populated by Puerto Ricans are Florida, Texas, Pennsylvania, New York and Massachusetts, where Puerto Rican co-ops would have more opportunities to offer them banking services.

Looking at the services that co-ops could provide, Adames noted that consumer loans and auto loans have been the fastest growing commodities among the Hispanic population in the United States. In 2017 and 2018, the percentage growth in Hispanic financial service use was 22 percent in personal loans, 18 percent in auto loans, 9 percent in mortgages, 8 percent in credit cards, and 4 percent in credit cards. cent of current accounts.

“An expansion in the use of digital financial services is expected, especially after the pandemic. The digital evolution of the financial sector as well as demographic changes mark differences in use and perception between generations. One in three Gen Zs and one in five Gen Yers have obtained a loan online, which is a 1.5-fold increase since 2018. Co-operatives and other financial entities are active in managing internal change to adapt to the new competitive reality, ”said Adames.

He recommended that cooperatives in Puerto Rico: strengthen the capital base to achieve financial flexibility; invest in alliances focused on bridging the digital divide; and use technology to expand their customer base and diversify their products and services with instant payments, personal finance solutions and various payment methods. Likewise, they must penetrate markets across generations: conquer the millennial and generation Z markets, while developing accessible services for the elderly.

Share.

Leave A Reply