Defending against Disruption in Latin America · Defending Against Disruption in Latin America A...
Transcript of Defending against Disruption in Latin America · Defending Against Disruption in Latin America A...
Defending Against Disruption in Latin AmericaA webinar presentation
• Introduction
• Why we are concerned about disruption
• Results of our Airbnb-hotel survey
• Our recommendations to Airbnb and hotel brands
• What sectors are vulnerable to disruption?
• Disruption trends in other industries:
• Payments
• Logistics
• Health
• Q&A
Webinar agenda
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Introductions
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AMI is the leading independent Market Intelligence provider in Latin America
AMI is Latin America’s leading
Market Intelligence and
Advisory group.
AMI’s founding partners are
pioneers in the field of Market
Intelligence in Latin America,
with over a quarter century of
experience in the region.
AMI has experience in over 30
Latin American and
Caribbean markets.
AMI is a member of
SCIP
Strategic and Competitive
Intelligence Professionals.
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About your webinar presenters
John PriceManaging Director
Ricardo ÁlvarezConsumer Services
Practice Director
Guillaume CorpartManaging Director
Healthcare Practice Director
Diego RodríguezLogistics Practice Director
Diego MedonePartner, IG Motion
Abel DelgadoDigital Marketing Director
Lindsay LehrPayments Practice
Director
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Wherever possible, AMI has verified the accuracy of information provided by third parties, but does not under any
circumstances accept responsibility for such inaccuracies should they remain unverified.
It is expected that webinar attendees will use the information provided in this report in conjunction with other
information and with sound management practices. AMI therefore will not assume responsibility for commercial loss
due to business decisions made based on the use or non-use of the information provided.
Legal Notice
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Poll question #1
Over the next 5 years, how much market share will
disruptive businesses gain in your industry in Latin
America?
0-5%
6-10%
11-20%
21-40%
41-70%
71-100%
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Why Disruption?
Why Now?
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Why disruption? Why now?
Mobile technology
Inefficient service sector
Regulatory openness
Financial conditions
The services sector
70% of the LatAm economy
$4 trillion USD
Vulnerable to disruption
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AMI – IGMotion alliance
DIAGNOSE
DEFINE
DECIDE
DELIVER
Consumer market research
B2B market research
Competitive intelligence
Political & regulatory intelligence
Economic forecasting
IGMOTION
GLOBAL
ADVISORS
Go-to-market strategy
Operational models
Sales & marketing strategy
Envisioning
Coaching & board advisory
Digital transformation
Agile innovation
Business strategy
Client experience
Purpose & change management
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AMI Mexico
survey
results
Airbnb vs. hotels
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Airbnb is far more effective than hotels at converting awareness into preferenceHotel loyalty programs do help, to a degree
Base: Have traveled in P12 months n=1,186 Base: Have traveled in P12 months n=1,186 Base: Have hotel loyalty program n= 115
Airbnb/total sample Airbnb/own hotel loyalty programHotel
Preferred
UM Often
U P 12M
Ever tried
Awareness
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Hotels are losing customers under 35 years of ageWomen are stronger adopters of Airbnb than men
58
42 43
57
63
51
4346
5456
42
37
51
38
Male Female 18-34 35-54 55+ A/B C+ C/C-
Demographic Profile
Hotel Airbnb
13
47
53
41
32
41
65
42
6263
47
74 75
61
42
51
64
0
10
20
30
40
50
60
70
80
Total Hotel Users Airbnb Users 18-34 35-54 55+ A/B C-/D+
NPS Score: Promoters (9-10) minus Detractors (0-6)
Hotel Airbnb
How much would you recommend Airbnb to family and friends? where 0 = I would not recommend it and 10 = I would recommend it extensively.
Next, Airbnb will steal share of 35-54 year-oldsStrong Net Promotor Scores scores are indicative of word-of-mouth preferences
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Hotel Airbnb Delta
It is a better option when traveling to a dangerous city 81 32 49
I prefer to use it when the company pays for it 73 35 38
Has a better reward program 72 36 36
It is best for business travel 74 43 31
It offers Interesting promotions with other companies 69 44 25
When I have a problem, is easy to solve it 73 49 24
I feel safe during my stay 82 63 19
Has great customer service 76 59 17
Where hotels still outshine AirbnbBusiness travelers in LatAm cities remain a strong segment for hotels
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Hotel Airbnb Delta
It helps me save money 40 78 38
It offers comms w/host thru app 46 74 28
It is for Millennials 31 59 28
It helps me control my budget 49 71 22
It is innovative 60 78 18
It gives me the opportunity to meet new people 56 71 15
It offers unique experiences 54 67 13
Where Airbnb outperforms hotelsCost-conscious, under-50 leisure travelers are Airbnb’s sweet spot
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To hotels To Airbnb
• Add safety questions to the evaluation
scores
• Create unique promotions for women
with safety focus
• Enhance the product via partnerships/new
product development to enhance its USPs:
• Authentic experiences (Airbnb
adventures)
• Meet new people (connect to other
travelers)
• Push “better value for my money” towards
SME biz market
Our recommendations
• Focus on safety — develop advertising that
demonstrates the merits of hotels over
Airbnb
• Visualize the customer service of a
receptionist versus an absentee Airbnb host
• Widen the customer experience by teaming
up with other service providers
• Invest deeper in loyalty programs
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The AMI – IG Motion approach
to disruption consulting
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Are using mobile devices and sophisticated digital
interactive tools to determine who to trust, where to go and
what to buy.
PEOPLE
Are undertaking their own digital transformations, rethinking
what customers value most, creating operating & business
models that take advantage of what’s newly possible for
competitive differentiation by using sophisticated technologies.
BUSINESSES
The challenge for business is how fast and how far to
go on the path to digital transformation to succeed
New paradigms & behaviors generated by the influence of new technologies
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PERMANENT MONITOR
DIAGNOSE
DEFINE
DECIDE
DELIVER
Hypothesis
Market Intelligence
Competition
Clients
Regulation
We start conducting research, market intelligence studies and
assessments to make deep dives into different critical scenarios.
With our resources, you will be better prepared to gain insights into
achieving a range of objectives, such as: exploring market
attractiveness; increasing market share; improving client experience;
gaining operational efficiency; avoiding risk; considering M&A
opportunities and creating sustainable growth—just to mention a
few.
Changing nature of competition
Broad access to analytical tools and approaches
Technology-driven strategic opportunity
Ability to prototype at a low cost
Importance of technical feasibility
Technology-driven strategic opportunity
Our strategy frameworkWe use a framework of 4Ds: Diagnose, Define, Decide and Deliver, in which Diagnose is the key component of the knowledge value chain.
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Rapid decisions and
learning cycles
North Star embodied
across the entire
organization
STRUCTURE PROCESSSTRATEGY PEOPLE
Network of
empowered teams
Dynamic people
model that ignites
passion
TECHNOLOGY
Next-generation
enabling technology
• Shared purpose and
vision
• Sensing and seizing of
opportunities
• Flexible resource
allocation
• Actionable, strategic
guidance
• Clear, flat structure
• Clear, accountable
roles
• Hands-on governance
• Robust communities
of practice
• Active partnership and
ecosystems
• Open physical and
virtual environments
• Fit to purpose and
accountable cells
• Rapid iteration and
experimentation
• Standardized ways of
working
• Performance
orientation
• Information
transparency
• Continuous learning
• Action-oriented
decision making
• Cohesive community
• Shared leadership that
empowers employees
at all levels
• Entrepreneurial drive
• Role mobility
• Evolving technology
architecture, systems
and tools
• Next-generation
technology
development and
delivery practices
Five trademarks of agile organizationsWhile each trademark has intrinsic value, our experience shows that true agility comes only when all five are in place and working together. They describe the organic system that enables organizational agility.
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Poll question #2
What needs improving most in your company to
embrace disruption/defend your market share?
1. Lower our costs and prices
2. Improve our customer user experience
3. Bring innovative new products/services to market much
faster
4. Disintermediate – i.e. get closer to our customers (take
out the middle man)
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Latin American
disruption
landscape
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LatAm disruption drivers and obstacles
Drivers
Smartphone adoption
Underutilized overhead
Disintermediation
Poor customer U/X
Oligarchies/supplier over-
concentration
Traffic
Labor & process inefficiencies
Idle labor
Cultural acceptance
Barriers
Regulations
Political interference
Capital intensity
Scarcity of skills
Disruption vulnerability driver score
Disruption obstacle score
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2
4
6
8
10
12
12 14 16 18 20 22 24 26 28
Ready to be disrupted or partially disrupted
Requires promotion Disruption vulnerability driver score
Dis
rupti
on o
bst
acle
score
Commercial water usage
Consumer banking
SME banking
Notary Public
University education
Casinos/gambling
Network TV
Department stores
Last mile logistics
Taxi services
Legal services
Graphic & industrial
design
Movie
theatres
Car rental
Industrial
equipment
rental
Publishing
& printing
General
practice
medicineSkilled
tradesmen
Business
hotels
Discount
stores
Customs brokerage
Cable TV
Private jet travel
4-5 star
hotels
Media
production
Supermarkets
Specialty retail
Boat rentals
Pre-K education
Funeral
homesHome
services
Consulting
services
Beauty/hair
salons1-3 star
hotels
Convenience
stores
Ready to be disrupted
or partially disrupted
Protected by lobbying
Already disrupted
The next generation of
disruptible services
Which service sectors are ripe for disruption in LatAm?
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▪ Uber—one of the most
successful digital commerce
merchants on the planet—
took nine years to win 15% of
adult Americans as customers.
▪ In Mexico, Uber reached the
same market penetration
threshold in 4.5 years,
expanding from 20 drivers in
2013 to 500,000 in 2018.
1. Mexico
3. Peru
5. Chile
6. Brazil
7. Argentina
Global rankings (out of
190 countries) of Netflix
hours watched per
customer
▪ In 2017, LatAm was Airbnb’s fastest
growing market in the world (148%
booking growth).
▪ >250,000 Airbnb listings across LatAm.
▪ Latin America is Coursera’s fastest
growing region worldwide.
▪ Soon after Spanish language courses
were made available, Coursera
registered more new customers in
Mexico than the US for a quarter.
Latin Americans are proven adopters of disruptive models
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New disruptors are more than just direct competitors
Originally
disrupted the
fragmented
home delivery
marketLast mile logistics
Poised to become a leading
disruptor of cash by digitizing
payments for the unbanked.
30,000 + Rappitenderos
(independent delivery men and
women) will soon be delivering
e-commerce parcels across the
region.
Originally disrupted
the Network TV, Cable
TV and Movie theatre
industries
Gaming market
Netflix original productions
disrupt the movie and television
production industry
Netflix’s next disruptive foray is
expected to be in gaming, as
large as the film industry
Eco-system impacts
Rappi will broaden
LatAm’s addressable
e-commerce market
Consumer advertisers
lose an important
promotion channel
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Practice
Outlooks on
Disruption
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Disruption in
LatAm
Payments
Presented by:
Lindsay Lehr
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Brazil’s leader trailblazing a cultural change“Você acredita que cuando todo mundo ganham junto é mais legal que sozihno? Então o Iti é para você.”
“Justo”
“Democrático”
“Transparente”
“Fácil”
“Brasileiro”
• Not required to be an Itau account holder
• 1% commission paid by receiver
• Payments in real time
• Mobile app enabling QR code payment
• P2P and P2M payments
• Launching Q3What could limit its impact?
• Credit cards only
What is new about iti?
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Industry evolution to come as QR grows
Payments finally are becoming consumer- and merchant- oriented
Downward pressure on fees
• Moving from a commission-based
business model to data
monetization
• Players willing to sacrifice fees
for scale and engagement
• MDRs trending toward zero
Openness
• EMVCo QR code standards in
Colombia and Argentina
• CoDi in Mexico
• Open banking regulation in
Mexico and Brazil
Real-time payments
• Instant P2P payments
• Faster payments to merchants
• Development of real-time ACH
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Industry evolution to come as QR grows
Who wins? Consumers, merchants, innovative first movers
Those able to change their revenue generation model
Who loses?Incumbents not open to change
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Disruption in
LatAm Logistics
Presented by:
Diego Rodríguez
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Disruptor leaders in logistics
▪ Logistics disruptors are focusing on automating and digitizing processes
▪ Import/export documentation
▪ Customs brokerage
▪ Backhauling
▪ Freight forwarding
▪ Last mile delivery
Where is it happening?
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Drivers and facilitators of disruption in LAC
▪ Venture capital advances at big steps with logistics as one of the
shiniest stars
▪ Brazil, Mexico, Chile, Argentina and Colombia are the focus of
interest for investors
$-
$500.00
$1,000.00
$1,500.00
$2,000.00
$2,500.00
$3,000.00
$3,500.00
$4,000.00
2016 2017 2018 2019F
Venture Capital
Venture Capital Flowing to LACLAC Physical E-commerce Forecast (USD billions)
0
20
40
60
80
100
120
2017 2018 2019 2020 2021 2022 2023
▪ Spillover effect of e-commerce demands to other industries
▪ Weak footprint of brick-and-mortar retail (1/20th that of US)
— see next slide
AcceleratorDriver
Source: AMI internal analysis, LAVCA.org
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What can legacy companies do?
License’em: A
productivity
enhancer
technology can
keep you alive to
fight another day.
Work for/with’em:
Light asset operations
and marketplaces can
be your future.
Compete with’em: Watch,
learn, copy and improve.
Buy’em: Deep pockets and
limited footprint in LAC.
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Disruption in
LatAm Healthcare
Presented by:
Guillaume Corpart
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Argentina
Colombia
France
Nigeria
Germany
Korea
Mexico
United States
Russia
Brazil
Japan
India
China
Emerging marketsDeveloped
economies
Number of hospitals by economy Number of hospitals by country
Advanced economies
28%
China23%
Latin America
22%
Other emerging markets
27%
• Access is the biggest challenge facing healthcare in Latin America today.
• More importantly: Access to Quality care in a Timely manner.
Challenge: Access to Q care in T manner
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▪ Public healthcare systems are saturated, resulting in long
wait times and/or lower quality care.
▪ Demographics will only further compound this issue.
▪ Private initiatives are filling the gap.
1. Technology is broadening access▪ 1DOC3 answered >90 M patient questions, free.
2. Pharmacies become primary care facilities▪ Low cost consultations at the pharmacy.
▪ Point of contact for HC needs, even insurance.
▪ Need for universal patient records.
3. Low cost clinics increase treatments▪ Salud Digna grows to 60 clinics in 14 years.
▪ 80% of patients pay OOP.
▪ Why successful? Faster, Easier, more Accessible (monetarily
and physically).
LatAm Population: 650 M
Private insurance8%
Potential for private insurance
12%
Public insurance71%
Uninsured9%
Private initiatives broaden access
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▪ Hospitals in Latin America do not have same leveraging
capabilities as those of the US.▪ 45 beds vs 160 beds
▪ Further enhanced in the private sector
▪ Hospitals have limited ability to invest in high cost/high-tech
equipment.▪ CT/MRI can cost >$500k
▪ Currency risks
▪ Manufacturers offering alternative to financing through “pay
per use” models.▪ Burden of financing is on the manufacturer
▪ Need high volumes of data to develop model correctly
▪ Equipment + Service bundling
▪ Pharma — starting to see initiatives towards “pay per
outcome” models
▪ Move towards value-based care
LatAm Hospitals: 21,750
5% (492)
19% (10)
3% (25)
6% (85)
8% (372)
19% (939)
25% (59)
12% (61)
19% (192)
23% (627)
70%
77%
40%
64%
72%
Average
Chile
Colombia
Mexico
Brazil
X-Ray CT Scanners MRI
Imaging equipment penetration
Private, 57% Public, 41%
Other, 2%
Pay per use / Pay per outcome
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Questions/Answers
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John PriceManaging Director
About AMI
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AMI is Latin America’s leading independentmarket intelligence consultancy
Our founding partners helped pioneer the field of market intelligence in Latin America
Our consultants have advised a third of the region’s 100 largest strategic investors over a span of two decades
AMI consultants have conducted over 3,000 client engagements in Latin America since 1993
Our holistic approach to market intelligence is unique. We combine market research, competitive intelligence, political analysis and economic forecasting in our studies.
+1 (305) 773-1141
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