FEATURE
New Legislation Makes Panama an E-Commerce Hub By ANTHONY ROBINSON
T
he coronavirus has claimed an unexpected victim — the independent international distributor in Latin American and Caribbean markets. Small and mid-sized manufacturers and brand owners of consumer-packaged goods are seeking to quickly regain the levels of performance they experienced pre-Covid. But retail consumer markets across the globe are in the throes of an economic downturn caused by the coronavirus pandemic. Recovery could take years. Our clients cannot wait for markets to recover fully. They are seeking solutions for nearterm revenue growth. We advise that a viable solution for small and mid-sized companies in the
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Association of Southeast Asian Nations, China, the European Union and the United States is accessing new customers in Latin America and the Caribbean (LAC). Also, we advise our clients not to repeat the same old mistake of entering the LAC region by the traditional method of appointing an independent local distributor. The seminal study performed on the relationship between the local international distributor and foreign manufacturers/brand owners by Harvard Business School Professor David Arnold concluded that these relationships are almost always doomed to fail because of the fundamental misalignment of goals between the parties. However, there is hope
for the small and mid-sized corporation that endeavors to enter LAC but is deterred by risky joint ventures and distribution agreements with local partners. The coronavirus pandemic, for all its negative effects, has reshaped consumer habits in Latin America and the Caribbean in favor of online shopping. Consequently, the LAC region is experiencing a significant acceleration in the growth of e-commerce penetration of retail sales. Also, the readiness of the logistics sector in the LAC region to serve e-commerce is at an all-time high, especially in the Republic of Panama, which has served as the logistics hub for the Americas for decades. This confluence of logistics BACK TO CONTENTS
