Chile: Reaching 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

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

Asociación de Consumidores y Usuarios de Chile
National Consumer Association
Consumer Association

Population in Figures

Total Population:

19,493,184

Urban Population:

87.8%

Rural Population:

12.2%

Density of Population:

26 Inhab./km²

Men (in %)

49.5%

Women (in %)

50.4%

Natural increase:

0.99%

Medium Age:

32.8

Ethnic Origins:

About 89% of the population is of a mostly non-indigenous origin, largely from European and mixed origins. The Mapuche account for about 9% of the population. The Aymara and other indigenous groups, including Rapa Nui, Likan Antai, Quechua, Colla, Diaguita, Kawesqar, Yagan and Yamana account for about 1%. (National Institute of Statistics)

Population of main cities

Source: Citypopulation.de, Latest available data.

Age of the Population

Source: World Bank, latest available data.

Household Composition

Source: National Institute of Statistics, 2005; The United Nations Statistics Division; latest available data.

Consumption Expenditure

Media in Which to Advertise

Television

Cable television is an important medium of communication and is growing in popularity, allowing advertisers to reach almost two thirds of households. In 2016, pay TV advertising expenditure in Chile amounted to 79 million U.S. dollars. According to AAM, open TV ad revenue as a percentage of total ad spending increased from 40.7% to 41.2% in 2017 while pay TV decreased from 13% to 12.4% during the same period. Mega TV has been the most popular TV channel for years (11.5 rating points), ahead of Canal 13 (7.8 rating points), CHV (6.6 rating points), TVN (5 rating points), and La Red (1.5 rating points).

Main Televisions
Televisión Nacional de Chile (TVN – Channel 7) 
Pontificia Universidad Católica de Chile - PUC (Channel 13)
Red TV (Channel 4)
Mega TV (Channel 9)
Chilevisión (Channel 11)
UCV Televisión
Claro
VTR
Direct TV
Moviestar

Press

Advertising in newspapers can have a regional or national impact. Chili has around fifty newspapers, both nation-wide dailies and local tabloids. According to AAM, newspaper held a mere 1.7% of media ad revenue during the first semester of 2017, a 12.5% decreased compared to 2016. Two media groups own most print titles.

The most sold weekly newspapers in the second half of 2016 were: El Mercurio (136,087), La Hora (87,147), Publimetro (84,333), Las Ultimas Noticias (83,126), Hoy x Hoy (82,626), La Tercera (75,966), La Cuarta (71,727), and La Segunda (14,778) (Statista).

Main Newspapers
El Mercurio S.A.P.
Empresa Periodística La Nación S.A.
Holding Metro International

Mail

Direct mail advertising, which is relatively marginal and often negatively perceived, has been steadily losing ground to online advertising.

In Transportation Venues

Advertising on billboards, buses, and the metro can reach large audiences (especially in metropolitan areas). Ad spending in public areas grew 6.2% during the first semester of 2017.

Market Leaders:
Systran
Public transport advertisement directory

Radio

Radio is most important medium of mass communication with hundreds of radio stations available. According to estimates, 93% of Chileans and 97% of Santiago inhabitants listen to the radio. Radio show importance is ranked by Ipsos every trimester, the latest 2017 results can be found here. According to AAM, radio represented 8.9% of media ad revenue during the first semester of 2017. The removal of chips to listen to FM radio on smartphones led to a 30% audience loss in 2017 after natural disasters hit (Wayerless).

Main Radios
Radio Corazón (most popular radio station in 2017 with 870k listeners), Ibero Americana Radio Chile (owner of the ADN Radio Chile, Radio Concierto, Radio Imagina (fourth most popular radio station in 2017 with 710k listeners), Radio FM Dos, Radio Pudahuel, 40 Principales, Radio Futuro, Radio Rock & Pop, Radio Activa and Radio Uno)
Radio Carolina (second most popular radio station in 2017 with 860k listeners); owned by Mega
13 Radios (owner of Play FM, Sonar FM, Oasis FM and TOP FM)
Grupo Bezanilla (owner of Radio Infinita, FM Tiempo and Romántica FM) (in Spanish)
Compañía Chilena de Comunicaciones (owner of the Radio Cooperativa and Radio Universo) (in Spanish)

Web

Online advertising is booming and allows to reach more than a third of the population. In 2015, mobile advertisement represented 11.4% of all digital marketing in Chile (below the regional average of 18.9%). Digital ads are currently focused on branding, but growth is expected towards search ads. Mobile advertising through applications and geolocalisation is also a new and developing trend.

14 million Chileans used the Internet in 2016 (78% of the population).

Main Advertising Agencies

Chile Advertising Agencies (in Spanish)
Members of the Chilean Association of Advertising Agencies (Asociación chilena de agencias de publicidad) (in Spanish)

Main Principles of Advertising Regulations

Beverages/Alcohol

A 2015 bill requires mandatory warning messages such as "excessive alcohol consumption poses a health risk", "alcohol consumption during pregnancy can cause irreversible damage to the fetus" or "Not for sale to minors". It also limits alcohol advertising to 22:00 to 06:00 time slots for T.V. and prohibits alcohol advertising in 16:00 to 18:00 time slots for radio. These regulations are enforced by the Ministry of Health.

Cigarettes

Decree No. 44 (2013) and Decree No. 88 (2015) prohibit all forms of advertising, promotion or sponsoring of tobacco and tobacco-derived products (including at points of sale). 100% of cigarette box space on both sides must display warnings on tobacco consumption.

Pharmaceuticals/Drugs

Drug advertising must comply with the legal constraints affecting these products. Advertising for non-prescription drugs must comply with articles 53 and 54 of the 2014 Sanitary Code (in Spanish). It must neither use terms, expressions or images contrary to scientific truth which could lead to error or be deceptive, nor can it make unfounded statements about the properties or effects of the product. It must not target children nor imply that a medical practitioner's opinion is not required. Prescription drugs are prohibited from using mass advertising channels.

Other Rules

Advertising is regulated by the Consumer Protection Act of 2004. The general principle is that advertising must not deceive the consumer nor incite him to abuse harmful products. CONAR provides non-binding guidelines for ethical advertisement (in Spanish).

Use of Foreign Languages in Advertisement

The Advertising Code of Conduct does not specify any prohibition on the use of foreign languages in advertising.

Organizations Regulating Advertising

Ministry of Health
Self-Regulation and Advertising Ethics Council (non-binding)
The Chilean Association of Media Agencies (non-binding)