Market Trends of Latin America Digital Signage Industry
Increasing Digitization to Drive the Market
- In recent years, the digitalization trend progressed significantly in the Latin American region, driven by technical progress, the development of the internet, growing awareness among consumers, and increasing globalization. Emerging technology trends due to digitalization, such as the Internet of Things, AI, data analytics employing Big Data, and AR (Augmented Reality), have a considerable impact on business operations in the industry, society, and the working environment.
- The COVID-19 pandemic brought about years of change in how all sectors, companies, and regions do business. For instance, companies significantly accelerated digitizing their supply-chain interactions, customers, and internal operations. The digital or digital-enabled product share in their portfolios increased considerably.
- Moreover, in February 2023, the Minister of Economy of Argentina and IDB also announced an investment worth USD 80 million in Argentina to launch a support program for small, micro, and medium-sized companies for their productive digital transformation towards Industry 4.0. The program incorporates technical services to help companies adopt new technologies and adapt to an economy that is innovative and more resilient to the impacts of climate change. Such trends collectively create a favorable market scenario for the digital signage industry as a higher awareness of digital technology will drive their adoption across various sectors.
- According to GSMA, a 10 percent increase in mobile Internet penetration can increase a country's GDP by 1.2 percent, while a 10 percent increase in a country's digitalization can generate 1.9 percent in GDP growth. Such stats are expected to encourage Latin American countries to accelerate their digitization efforts further, creating a favorable scenario for the market studied.
- Furthermore, increased digital advertising spending, along with allocated budgets by the companies toward digitization, is the major reason for the high adoption rate of these devices from the commercial segment.
- Major retailers are expanding their presence in Latin America's fastest-growing markets. Amazon is scaling its extensive operations and services across Brazil, Mexico, Columbia, and Chile. Likewise, Mercado Libre, the e-commerce player, announced efforts to upgrade tech, offerings, and general coverage to serve the growing demand.
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Brazil Holds Largest Market Share
- Brazil is one of the largest countries in Latin America. The country's business infrastructure is thriving as a result of the rising rate of urbanization, which increases the demand for digital signage solutions. For instance, according to the World Bank, in 2021, the degree of urbanization in Brazil was about 87.32 percent. As explanations for digital signage are essential for increasing communication efficacy, by using such solutions, end users can expand their reach in metropolitan regions to accommodate the expanding population in the area.
- Digitization has been a prevailing trend in Brazil, as the government is taking several initiatives to expand the digital infrastructure in the country. For instance, the Brazilian government has worked with Cisco for years to develop the networking infrastructure required to support digital solutions. Furthermore, according to EBC, a public communications company in Brazil, in 2021, the country rose five positions to be ranked as the second most advanced country in the field of digital government globally.
- Continuous investments are being made in the country to support this growth further. For instance, in September 2022, the Inter-American Development Bank (IDB) approved a loan worth USD 164 million to the State of São Paulo, Brazil, to help it advance the digital transformation process to improve the quality and efficiency of public services to citizens. Such trends create a favorable outlook for the growth of the market in the country.
- The increase in retail outlets and shopping malls in the country also drives demand for digital signage systems. According to the Brazilian Association of Shopping Centers (Abrasce), there were 620 malls in Brazil in 2022, and they collectively brought in close to BRL 160 billion (about USD 30.8 billion) in sales. Renner, C&A, Carrefour Hypermarket, Extra, Magazine Luiza, Casas Bahia, Drogasil, Droga Raia, and other major brands are among the top retailers in Brazil adopting digital advertising solutions. The current objective of Brazilian shopping centers is to give patrons an immersive experience by combining traditional and digital mall signage, which is anticipated to boost the market studied.
- The growing advertising expenditure is also among the major factors driving the growth of the digital signage market in Brazil. For instance, according to Magna, a leading medical investment company, Brazil had the highest advertising expenditure among Latin American countries.
- Digital signage is widely replacing traditional advertising methods owing to the various benefits they provide over traditional advertising methods. This is expected to drive the adoption of digital signage solutions in the advertising sector of the country.
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