Trade Promotion and Advertising
The Reuters Digital News Report 2021 shows that television remains the most important traditional news source, as the use of print media continues to decline in line with global trends. Most, if not all, print, television, and radio news outlets have online portals. Increasingly, Chileans are turning to online sources and social media for news, and advertising which has had an impact on traditional media, especially since several media outlets ended their operations in 2018 and 2019.
Print, Online and Broadcast Media
Chile has approximately fifty newspapers ranging from nationally distributed dailies to small-town tabloids; Santiago has five major dailies, with a distribution that ranges from as many as 400,000 copies of a Sunday edition of El Mercurio, to 3,000 copies of a regional paper. During the 2020 coronavirus pandemic, La Tercera went digital and began printing only on weekends. Publimetro is the leading free morning daily. Financial daily DiarioFinanciero is the only business newspaper remaining. Radio is the country’s most extensive and most trusted news medium, especially in rural areas. There ar approximately 2,350 radio concessions nationwide.
Pricing
Pricing in Chile starts with a straightforward formula based on Cost, Insurance and Freight Import (CIF) value: costs plus generally constant ship-to-warehouse expenses. Gross margins for consumer goods range from 30 to 50 percent or more for direct sales to consumers, or 20 to 30 percent each for the importer/distributor and the retailer when a distribution chain is in place. The final price for mass-market items should be competitive with imports from Asia and Brazil. Higher-priced items must identify niche market segments to prosper. More specialized products are sold by stocking distributors or by commissioned agents who generally earn margins of 5 to 10 percent on their sales.
Under the U.S.-Chile FTA, tariffs were eliminated on most goods imported from the United States. However, all goods, both foreign and domestic, are subject to Chile’s value added tax (called “IVA” in Spanish), which has been 19 percent since October 1, 2003. Any tariff and value added tax is usually paid by the importer and not by the supplier. There are some exceptions: government entities do not pay these taxes, and some luxury goods have higher tariffs.
Sales Service/Customer Support
Customer service and support are fundamental to successfully aquiring and retaining market segments for most products and services. Any product that requires operator training or needs after sales technical service must have a qualified local company ready and able to assist the customer. Due to Chile’s relatively close-knit society, company reputations can be made or lost in a fairly short period of time.
Local Professional Services
Chile’s business environment and infrastructure are well-developed. There are many local companies that can provide professional services to U.S. firms.
The U.S. Commercial Service via its Contact List Service can provide a list of service providers that offer legal, financial, administrative/human resource, transportation, hotel, consulting, and market research services. These firms provide support to companies initiating or expanding business in Chile. Please contact the U.S. Commercial Service for more information.
Principal Business Associations
An additional method vital to the success of conducting business in Chile is to contact the multitude of principle business associations. With information and expertise in the various business sectors, their insight can provide assistance in launching an expansion into the Chilean market. Although their knowledge is an easily accessible resource, their ability to provide contacts in Chile can be equally as rewarding.
Sociedad de Fomento Fabril - Chilean Manufacturer’s Association, SOFOFACámara de Comercio Santiago – Santiago Chamber of Commerce, CCSAsociación de Exportadores y Manufacturas – Chilean Exporters Association, ASEXMASociedad Nacional de Minería – National Mining Association, SONAMIAsociación Chilean de Empresas de Tecnología de Información – Chilean Association of Information Technology Companies, ACTICámara de la Innovación Farmacéutica – Chilean Chamber of Pharmaceutical Innovation, CIFAsociación Industrial de Laboratorios Farmacéuticos – Industrial Association of Pharmaceutical Labs, ASILFAClínicas de Chile - Association of Private ClinicsAsociación Nacional Automotriz - Chilean Automotive Association, ANACCámara Chilean de Comercio de Repuestos y Accesorios Automotrices – Chilean Chamber of Auto Parts, CAREPCámara Chilena de la Construcción - Chilean Construction Chamber of Commerce, CChCAsociación Chilena de Gastronomía - Chilean Association of Gastronomy, ACHIGAAsociación de Industriales del Plástico – Chilean Association of Plastic Industry, ASIPLASociedad Nacional de Agricultura - National Society of Agriculture, SNACorporación de Desarrollo Technológico – Technological Development Corporation, CDTAsociación de Exportadores de Frutas – Fruit Exporters Association, ASOEXAsociación Gremial de Industriales Gráficos – Graphics Industry Association, ASIMPRESCámara Cosmética - Chilean Chamber of Cosmetics Chile Telcos – Association of Chilean Telecommunications Companies
Limitations on Selling U.S. Products and Services
There are no major limitations for selling U.S. products or services. However, when bidding through Chilecompra, the government procurement agency, U.S. companies must have a Chilean tax identification number (RUT) that can be aquired at Servicio de Impuestos Internos (SII), the Chilean IRS equivalent. While it is not a requirement for U.S. companies to have a direct presence in Chile to receive a RUT, a direct presence or a local representative is recommended for bidding on public procurements.