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.
Panama has the highest per capita income in Central America. However, most of the income is skewed to a small, consumer goods-oriented economic class. These upper-middle and upper-income class families have high levels of disposable income. They are interested in purchasing high quality, trend-setting goods. Price is less of a factor in this class’s purchasing decisions than for the middle and lower-income classes. Most Panamanians are interested in quality, but price still plays a significant role in the purchase decision.
Panama, as the “Hub of the Americas,” has become a shopping destination for the region’s growing middle class. It is not uncommon to see Brazilians, Colombians, Venezuelans, and Central Americans flooding the malls, particularly during holidays. As a result, U.S. consumer retail and franchise companies can expect more sales opportunities than Panama’s small population would at first indicate.
The use of the U.S. dollar as legal currency, brand recognition, and consumer preference for high-quality products at competitive prices are a few reasons for the high acceptance of U.S. products in Panama. Overall, U.S. products are well accepted and are known for their high quality and durability. Nonetheless, U.S. products must compete against lower-priced products, especially from Asia. For example, as in the U.S. itself, Japanese and Korean electronics dominate the market because of aggressive market entry techniques and good quality at competitive prices. Note that U.S. brands, many of whom manufacture outside of the U.S., enjoy a prominent position in the marketplace and in the Colón Free Zone. Brands like Nike, Oakley, and Columbia sportswear fall into this category. There are an estimated 150 U.S. brands present in Panama.