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 consentAs per expiration date, if indicated in the contractAs 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 contractAs per the principal’s decision, in which case it will be responsible for all damages to the agent, as a result of the terminationAs 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 million internet users in Guatemala as of January 2023. The number of internet users increased by 258 thousand (+2.4%) between 2022 and 2023. Internet penetration in Guatemala stood at 60% in January 2023.
Social media users
There were 8.70million social media users in Guatemala as of January 2023. The number of social media users in Guatemala was equivalent to 48.4% of the total population. Mobile connections
Guatemala has an extensive telephone network that reaches most of the country. However, cellphones have become in the last years far more common than land lines. Pay phones are very rare these days, since there were 22.47 million mobile connections in Guatemala in January 2023,which is equivalent to 125.0% of the total population. Guatemala still is the Central American country with the highest number of mobile internet connections, with approximately 20.3 million users accessing the internet through a mobile device.
Facebook is the most used social media tool for promotion and sales, holding 8.68 million users in Guatemala in late 2022. Facebook ad reach in Guatemala was equivalent to 74.5% of the local internet user base in 2022. YouTube reached 48.2% of its population, while Instagram reached only 16.8% in the beginning of the year. However, related to Instagram, it is important to mention that the platform is for 13 years and older, so only 22.9% of the eligible population in Guatemala uses this platform. Numbers published in Twitters’s advertising resources indicated that they had 675.1 thousand users in Guatemala, in 2022. Other popular social platforms used are: WhatsApp, TikTok, and Pinterest.
In 2022 there were 17,200 domestic companies selling online in Guatemala, which represents a 65% growth compared to 2020, when there where 6,500 reported companies. Of these, 96% are SME’s and during 2021-2022 period there was a 67% increase in the frequency of online purchase.
According to the Guatemalan Chamber of Commerce, the international stores purchases were lagged behind for the first time.
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 small and 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.
As of today, the open-source platform WooCommerce was the most popular e-commerce solution among online retailers in Guatemala, with 39% of them relying on it to sell their products and services on the internet. Squarespace ranked second, used by 10% od online merchants.
E-commerce has become a powerful driver of economic growth, inclusive trade and job creation across the world. While some developing countries have made significant inroads into e-commerce, the vast majority is still lagging behind. Since 2019 Guatemala began participating in the “eTrade for All” initiative led by UNCTAD, that focuses on the development of e-commerce in developing countries by:
1. Strengthening of the regulatory framework
2. Protecting the consumer
3. Protecting data
4. Strengthening capacities to innovate
In February 2022, the plenary of the Congress of Guatemala heard the bill entitled “Law to promote and facilitate cross-border electronic commerce”. This initiative proposes to amend the Value Added Tax Law, the Tax Update Law and the Provisions for the Strengthening of the Tax Administration. The amendment seeks to tax the downloading and commercialization of digital products. Since that date, no progress has been made in the discussion of this initiative.
Trade Promotion and Advertising
The U.S. Commercial Service (FCS) 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: Maria Stella Roman de Aragon
Cámara de Comercio de Guatemala (Guatemalan Chamber of Commerce)
Contact: Jorge Briz Abularach, 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
· 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 https://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:
· Revista Gerencia
· Asociación de Gerentes de Guatemala
· Revista Industria
· Mundo Comercial
· 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:
a) Product F.O.B. cost
b) Product freight and/or transportation cost
c) Product insurance cost
d) Import duties
e) 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 offer 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 which occur under normal conditions of use.
Local Professional Services
Professional services involving lawyers, auditors, consultants, custom 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 Business Service Providers. U.S. Government cannot recommend any particular attorney or professional.
Principal Business Associations
There are several business associations in Guatemala.
The largest one, Coordinating Committee of Agricultural, Commercial, Industrial, and Financial Associations (CACIF), is the umbrella to seven 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 economic growth, trade, competitiveness and corporate social responsibility; in some cases they also push for increased rule of law and transparency.
Limitations on Selling U.S. 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.