Identifies common practices to be aware of when selling in this market, e.g., whether all sales material need to be in the local language.
Guatemalan purchasing decisions are primarily based on price, service, and quality.
Direct sales by U.S. exporters to end-users, importers, wholesalers, and retailers are usually most successful when the product is well-known within the market, or when a limited number of large buyers exist. Direct sales are often supported by local advertising, sales promotion campaigns, technical or illustrative brochures, visits by salespeople, and in some cases, samples.
Sales via local agents and distributors are usually the most effective means of penetrating the market. The U.S. exporter appoints a person or firm, which in turn, either promotes sales on a commission basis or purchases the merchandise and re-sells it. End-users and retailers generally do not have the time or experience to import directly, which involves handling customs clearance.
If a U.S. firm signs a representation contract, it is important to know that such will be subject to the Agency, Distribution and Representation Law, contained in Congressional Decree No. 8-98, of February 4, 1998.
According to this law, in Article 290, there are five instances by which a contract may be cancelled;
- As a result of mutual consent
- As per expiration date, if indicated in the contract
- As per the local agent’s decision, as long as it provides three-month notice. In such case, the agent is subject to responding to all pending settlements according to the contract
- As per the principal’s decision, in which case it will be responsible for all damages to the agent, as a result of the termination
- As per fair cause, which includes all sorts of situations common to the termination of a commercial relationship
- The law presents details on each situation. It is recommended that an attorney, other than the one representing the local firm, is consulted for the signing of these agreements.
There were 11.75 million internet users in Guatemala as of January 2021. The number of internet users increased by 217,000 (+1.9%) between 2019 and 2020. Internet penetration in Guatemala stood at 65% in January 2021.
Social media users
There were 9.3 million social media users in Guatemala as of January 2021. The number of social media users in Guatemala increased by 1.4 million (+18%) since 2019. Social media penetration in Guatemala stood at 52% in January 2021.
There were 20.75 million mobile connections in Guatemala. The number of mobile connections in Guatemala increase by 404 thousand (+1.9%) between January 2020 and January 2021. The number of mobile connections in Guatemala in January 2021 was equivalent to 114.7% of the total population. Meaning there are more phone lines than people. The share of web traffic by device from 2019 to 2020 increased 65.5% for mobile phones and 33% for laptops and desktops.
Facebook is the most used social media tool for promotion and sales. Large companies have become pioneers within the industry, and it will take some time for smaller firms to adapt. User overview of online platforms: Facebook 6 million, Instagram 2.4 million, Linkedin 1 million and Twitter 515.6 thousand. Other popular social platforms used are: WhatsApp, YouTube, TikTok, and Pinterest.Online Payment
Guatemala offers new payment methods that facilitate the development of e-commerce, not only in Guatemala but throughout the Central American Region. The most common forms of payment are personal debit and credit cards (VISA, MasterCard and American Express), PayPal Latin America, Apple Pay and wire transfers. E-commerce has allowed many smalland medium-sized entrepreneurs to trade their products locally, and internationally. Some financial factors of the Guatemalan population to take into consideration is that 44% of the population has an account with a financial institution, 6.6% has a credit card and 7.6% makes online purchases or pays bills online.
The Covid-19 Effect
Due to the confinement in home mandates that begun in March 2020 due to the Covid-19 pandemic crisis consumers disappeared from physical stores and have migrated to a digital platform to buy products.
The Guatemalan Chamber of Commerce reports that e-commerce activity grew 27% since March 2020. Current sectors favored in online shopping are cleaning and personal hygiene products, followed by cosmetics and perfumes, car and motorcycle accessories, food and beverages, and construction materials and tools.
According to the Guatemalan Electronic Commerce Union (Grecom), before the Covid-19 pandemic, Guatemala reported an annual average growth of 20%. During the mandated confinement that lasted for several months in mid-2020, Grecom estimates that between 1,500 and 2,000 companies joined e-commerce platforms.
Many experts state that in this new post-Covid commercial reality, the interaction between consumers and brands is changing. The move to online shopping could be perpetuated in the medium and long term, as new digital habits are expected to be maintained, even after the crisis is over.
Guatemala has also begun participating in the “eTrade for All” initiative led by UNCTAD. UNCTAD focuses on the development of e-commerce in developing countries by:
Strengthening of the regulatory framework
Protecting the consumer
Strengthening capacities to innovate
Trade Promotion and Advertising
The Commercial Services office of the U.S. Embassy in Guatemala City can provide guidance and assistance to U.S. firms seeking to enter or expand their presence in the Guatemalan market. The following trade associations can also provide guidance, information and/or assistance to companies planning trade promotion events, which may include product demonstrations, seminars, conferences, etc.
American Chamber of Commerce of Guatemala (AMCHAM)
Contact: Juan Pablo Carrasco, President
Cámara de Comercio de Guatemala (Guatemalan Chamber of Commerce)
Contact: Jorge Briz Abularach, President
Cámara de Industria de Guatemala (Chamber of Industry)
Contact: Eduardo Alberto Girón Benford, President
Cámara Empresarial de Comercio y Servicios (Chamber of Commerce and Services)
Contact: Julio Reyes, President
Advertising in Guatemala is usually done through the local media, such as newspapers, magazines, radio and television. In recent years, the use of billboards displayed along highways has proliferated. In addition, web based advertising, such as Facebook, Instagram and Twitter, are becoming more popular every day.
Emerging trends in Latin America show an exponential growth in the online audience. Mobile phones and tablets continue to account for the growth in online traffic. This shift in the digital media landscape has changed the way marketers are communicating. Digital marketing is now at the core of the marketing mix in Latin America where consumer insights and channel selection are essential to creating successful marketing strategies. There are local and international companies offering digital marketing campaigns tailored to different budgets and needs.
Firms interested in advertising in Guatemala may wish to contact the following association for guidance and referrals to Guatemalan advertising firms:
Comunidad de Empresas de Comunicación de Guatemala - Community of Communication Enterprises of Guatemala
Contact: Carolina Ladd, Executive Director
The leading newspapers in Guatemala include the following:
- Prensa Libre
- El Periódico
- Nuestro Diario
- La Hora
The following are the major television channels in Guatemala:
- Canal 3 de Televisión (Channel 3)
- Televisiete (Channel 7)
- TELE ONCE (Channel 11)
- TRECEVISION (Channel 13)
- GuateVision (Channel 25)
- Canal Antigua
To listen to Guatemalan radio on the Internet, visit www.surfmusic.de/country/guatemala.html
- The following is a list of some of the major radio stations in Guatemala City:
- Emisoras Unidas
- Radio Mundial
- Radio Sonora
Magazines and Business Journals:
Asociación de Gerentes de Guatemala
Doing Business in Guatemala
Price is a very important decision factor for Guatemalan businesspeople when selecting a supplier of imported goods and services. Many Guatemalan businesspeople are accustomed to purchasing directly from foreign exporters, especially when they feel that the prices of locally available imported products or services are too high. In order to calculate the cost of a product or shipment, companies add up the following expenses:
Product F.O.B. cost
Product freight and/or transportation cost
Product insurance cost
Value added tax, 12%
Sales Service/Customer Support
One of the most important purchasing decision factors for Guatemalan importers is after-sales service. U.S. firms, more than other foreign firms, generally have a reputation for providing good service and support. U.S. firms interested in penetrating the Guatemalan market should make a commitment to offering excellent service and support to their Guatemalan buyers, agents and distributors. This commitment to excellent service and support should also be made clear by the U.S. firm to its local agent or distributor. Poor or mediocre service often leads to lower sales. The Guatemalan business community is comparatively small and word travels quickly about local and foreign firms that offer poor service and support.
Although after-sales service is not included in the Commercial Code, many representatives, wholesalers, and retailers also provide after-sales service and support.
This is particularly common with household appliances, electronic consumer goods, telecommunications and computer equipment, other electronic equipment, and industrial machinery. There are no provisions in the law regarding product guarantees. However, most retailers provide some sort of guarantee that covers problems that occur under normal conditions of use.
Principal Business Associations
There are several business associations in Guatemala.
The largest one, the Coordinating Committee of Agricultural, Commercial, Industrial, and Financial Associations (CACIF), is the umbrella to eight chambers or associations that gather over 1,500 companies. The American Chamber of Commerce (AmCham) is also very active. All chambers accept U.S. companies as members.
These associations have an active role in advocating for rule of law, transparency, economic growth, trade, competitiveness, and corporate social responsibility.
Limitations on Selling US Products and Services
There are no significant limitations on selling U.S. products or services to the Guatemalan market, as long as the exporter or seller complies with the regulations and laws that apply to the specific product.
Local Professional Services
Professional services involving lawyers, auditors, consultants, customs brokers, financial consultants, etc. can be very useful in instances such as preparation of agency and distribution agreements and are essential for the legal registration of a new company, registration of a patent or trademark, debt collection, property rights, power of attorney, and trade arbitration. As a matter of good business practice, U.S. businesspeople should not share the same attorney or auditors utilized by their local business associates. Please contact Commercial Service in Guatemala to obtain a list of Business Service Providers. U.S. Government cannot recommend any particular attorney or professional.