Living in Peru : your everyday companion

A few years ago, C. K. Prahalad and Allen Hammond wrote a very interesting article for the Harvard Business Review, named “Serving the world’s poor profitably”. In it they speak of the great economic potential the market at the bottom of the pyramid represents.

If this is true, then why have companies not traditionally invested in this market? Because: (1) They have assumed that the poor have no money, (2) They think that they are too worried with satisfying basic needs and (3) They consider that it is not possible to generate profits in this market segment.

Info provided and translated by the
American Chamber of Commerce of Peru (AmCham Peru)

Info provided and translated by the
American Chamber of Commerce of Peru (AmCham Peru)

Info provided and translated by
ALETEI CAPITAL

Courtesy of

(Provided by  Diego de la Torre – Partner, Aleteia Capital)

The dawn of the information society is approaching, even before we had a chance to adapt to its demands as individuals and businesses. We have lived as hunters and gatherers, we have worked in factories and now we are living in an information society, the icon of which is the computer. Nevertheless, we are faced with the beginning of a new type of society: the society of emotions. We are beginning to detect its effects in our employees, our consumers and our lifestyle.

Now is the time for change, the time for beginning to add emotional value to our products and services. The products of the future will have to appeal to our hearts, not merely to our heads. It will not be the best technology or the newest product what clients will prefer, but the story behind the product that will produce differentiation. Consumers will pay for the story that ignites their imagination, one that reflects how they see themselves and how they want others to see them.

As competitive pressure and technology cause products and services to become commodities, businesses will have to be different from their competitors by creating credible and convincing accounts that appeal to the hearts of consumers about who they are and what they believe in. Some of the most successful companies in the world, such as Disney, the Body Shop and Rolex have long recognized the consumer’s appetite for a good story. As said by Rolf Jensen of the Copenhagen Institute of Future Studies, "businesses need to imagine their businesses in the same way in which good novelists imagine their stories".

In another area, we live in a CNN world. Technological changes allow us to have access to information about world events in real time. Now an English consumer of shoes from a developing economy knows whether they were produced with manual labor by enslaved children, and incorporates this intangible aspect of the product into his purchase decision. Due to an increasing social and ecological conscience among consumers, intangible variables such as good corporate citizenship and social responsibility are the factors that increasingly decide the preferences for a certain good or service.

Also, due to the competitive pressure of globalization, all products tend to become commodities, whereby quality and price are standardized. For that reason the key to differentiating our products is found in a multiplicity of intangible aspects, foremost among them being the company’s social responsibility, which is nothing more than the contributions that it makes towards improving its social and ecological surroundings.

There is a neo-protectionism based on an ethical tariff that is not generated by a ministry of economy, but rather in the mind of the consumer, becoming a very subtle and effective para-duty device. A media report on the working conditions at Nike subcontractors in Southeast Asia sufficed to make this company’s shares suffer dramatic declines during the early nineties. A simple photo of a pregnant Peruvian female harvesting asparagus made it difficult for this product to get access to the European market.

(Provided by  Diego de la Torre – Partner, Aleteia Capital)

Over the last few years, Peru’s economy and international image have changed dramatically. The radical changes and open economic policies applied during the nineties put Peru in a sensible path of economic recovery. As a result, foreign investment into the country has been providing Peru with resources to sustain its economic growth rate. This clearly reflects international confidence in the country’s future, considering the social and political issues currently present in Peru.

The impressive results achieved by Peru’s economy brought back international credibility to the country. This is reflected in the reports of risk classification agencies. Peru is working hard to get the Investment Grade, which seemed a utopia not long ago. The stable macroeconomics policies, clear investment rules, new labour laws, and privatisation have attracted foreign investment. On the other hand, tight fiscal and monetary policies have also contributed to achieve extraordinary economic results. Peru’s 6.4% GDP growth rate in 2005 and 7.9% in 2006 were among the highest in Latin America. The annual average growth projected for 2007-2008 is 7.0%, which is well above the region average. Inflation is no longer a problem with an independent and very professional central bank management. There are still, however, other economic indicators that Peru has not yet developed to the desired levels. Despite the efforts made, infrastructure is still rudimentary and the stock market is still relatively small.

Peru’s international policy has been increasingly active. Peru has tried to get Peru involved in all international trade negotiations, including the Andean Pact and GATT, reflecting the interest of Peru for free trade. Peru has just signed a Free Trade Agreement with the United States (it is expected to be approved by the US congress in June) and it is actively searching for a similar agreement with the European Community. Nevertheless, international trade in Peru is still incipient, despite the export boom of the last three years and the positive commercial balance. Export and import mix give no sign of a significant change towards capital-intensive manufacturing or knowledge based product and services. Peru still seems to be focusing on exploiting its natural resources during this stage of its economic growth. Fortunately, this is starting to change.

Info provided and translated by the
American Chamber of Commerce of Peru (AmCham Peru)

Info provided and translated by the
American Chamber of Commerce of Peru (AmCham Peru)

(By: Joe Lara)

Tired of the living the rigors of the European rat race, Valerie Barbier – originally from France, came to Peru to fulfill her quest of finding something that would take her away from the suffocating business environment that steered her to contemplate the true meaning of her career.

After just a month and a half of living in Peru, Barbier developed an internal desire to stay in the country in which she knew little about before arriving to work for a non governmental organization (NGO) in the Peruvian Andes. However, her term at the NGO ended and it was time for her to return to home.

Once back in Europe, Barbier found herself wanting to return to the country whose food she says is better than that of her native country's (her favorites include ceviche, anticuchos, tamales, and Peruvian corn with cheese). So she packed up her belongings and returned to Peru.

It was in the Andean city of Huancayo where the natural entrepreneur first heard of native Peruvian plants with antioxidant qualities... The seed was planted.

Her idea: To make natural skin care creams based from plants and ingredients native to the Andean nation.