The potential of the Hispanic market for Taiwan

Most Taiwanese companies are focused on the APAC, US, and European markets, forgetting the potential of the Spanish-speaking market, both in Spain and Hispanoamerica. It is a market of more than 680.000.000 million people.

Taiwanese companies are struggling in markets where competition is fierce, leaving the Hispanic regions as a niche market for only a few that have recognized the sales opportunity in a potential market. 

It is a niche, yes, but a huge niche market as we will see below that most are unaware of.

In spite of being a market of great potential, it is a great unknown for most Taiwanese companies, probably due to factors such as lack of knowledge of the Spanish language, lack of knowledge of the culture, or a totally wrong image of poverty in regions that have a nominal GDP of more than 1,2 billion USD as we can see in the graph below.

Sectors such as livestock, agriculture, mining, oil, gas, and tourism, among others, are capable of absorbing the export of Made in Taiwan products, but companies from the island are not reaching this region where the official language is Spanish.

In 2021, Taiwan's total exports broke records by increasing by 29.4% over 2020, reaching a figure of around USD 447 billion.

According to data from ICEX (Spanish Trade Institute), Taiwan is the 18th largest exporter in the world and the 17th largest importer.

Taiwan enjoys a trade surplus, which in recent years is positioned between 7% and 10% of GDP, approximately, being currently the trading partner of China, which including Hong Kong, absorbs more than 40% of Taiwanese exports, followed by the ASEAN bloc, USA, Japan, and the EU.

But Taiwan's main customers in 2020 were China, the US, Japan, Singapore, South Korea, Malaysia, Vietnam, the Philippines, and Germany.

Taiwan traditionally enjoys trade surpluses with China and the US, and trade deficits with Japan.

But what about the Spanish-speaking market and why are Taiwanese companies not exporting as much as they could to Spanish-speaking countries as a whole? 

 

Bilateral trade between Spain and Taiwan

Trade relations between Taiwan and Spain have historically been characterized by a clear imbalance in favour of Taiwan. Exports of Spanish products to Taiwan reached €633.8 million in 2020, compared to an import volume from Taiwan of more than €1.2 billion, which is almost double.

Even so, this represents less than 1% of Taiwan's exports, a truly shocking figure, with the Spanish economy being the 15th in the world in constant growth that would be able to absorb a greater amount of imports from the island.

Spain usually imports machinery and capital goods from Germany, China, and France for capital goods, and China, Turkey, Italy, Bangladesh, and Morocco for machinery. The capital goods sector is the sector with the largest financial deficit for Spain after energy products.

The five products that Spain imports most are:

Crude oil (13%)

Refined petroleum (4.6%)

Spare parts (4.2%)

Petroleum gas (4%)

 

This is so, Spain has very potential sectors such as livestock, agriculture, mining, oil, and gas, and thanks to its climate and the beauty of the country, tourism, among many others.

Sectors that need imports and in the end are still a succulent cake for companies that know how to reach end customers.

Hispanoamerica as a potential market

In terms of economic growth alone, the economies with the best prospects for next year are Panama, the Dominican Republic, El Salvador, and Peru, according to the latest forecasts of the Economic Commission for Latin America and the Caribbean (ECLAC).

Among the larger economies, there are some, such as Chile, Peru, and Colombia that are reasonably well-positioned to recover by 2022 and as emerging economies with some stability are a potential market for Taiwan's exports.

Even so, there are countries that would be left out of the equation for logical reasons such as Argentina, a country with such high tariffs for Taiwanese products that it does not make sense to consider exporting there. Probably agreements with China that commit them to avoid importing from Taiwan.

How can I sell in Latin America?

To reach this market the most important thing is to follow certain steps to ensure the success of the venture.

1 - MARKET ANALYSIS 

The first thing is to do a market analysis of the region or country we want to target. For this it would be interesting to have a Spanish-speaking professional who can locate the necessary data in an efficient way, obtaining real data in a consistent time, since no matter the language, despite the translation tools we have today, is not the best option. Sensitive data, such as legal requirements, certifications, etc... Cannot be translated by Google.

2 - CREATIVE STRATEGY 

Once the market has been analyzed, we have to design a realistic and creative strategy, optimizing resources to achieve the objectives we set. Again at this point, it is important to have someone who knows the market well, since understanding the culture of the country we are targeting is really important, as I have explained before on other occasions in my posts.

3 - SUPPLIERS

To get going we have to find the right partners, our suppliers. We need carriers, customs agents, and marketing, and advertising agencies that as in the previous points, know well both the language and the culture of each country and how to do the paperwork, requirements, ways of communicating, etc... You will need the best marketing agency in Taiwan. 

In this case IGNITE Global Marketing has the vocation to help Taiwanese companies as the best creative agency in Taiwan to internationalize thanks to our deep knowledge of both the Spanish language and the Hispanic culture.

4- GET GOING

Now that you are ready to conquer the Hispanic market, you can start your plan and take advantage of this niche that will allow you to increase your sales and thus your billing exponentially.

Obviously, it requires an investment and effort to reach this market, but it is a market in which there is no competition in APAC as in the U.S. or Europe, it is a market with tremendous potential and right now few companies in 

Taiwan has understood it, but those who have done so are reaping the success of having embarked on this adventure which is very difficult to lose.