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(Last updated: 27 May 2008)
Trends and opportunities
The market
Peru is a developing country with a per capita income of US$3,616 (2007) according to government figures. Around 51 per cent of the total population is poor, including 19.2 per cent that is extremely poor. Historically, the country's economic performance has been tied to exports, which provide hard currency to finance imports and external debt payments. Although exports have provided substantial revenue, self-sustained growth and a more egalitarian distribution of income have proven elusive.
Services account for 53 per cent of Peruvian gross domestic product, followed by manufacturing (22.3 per cent), extractive industries (15 per cent), and taxes (9.7 per cent). Recent economic growth has been fuelled by macroeconomic stability, improved terms of trade, and rising investment and consumption. Trade is expected to increase further after the implementation of a free trade agreement with the United States, which was signed on April 12, 2006.
According to Australia’s Department of Foreign Affairs and Trade (DFAT), exports of services to Peru are valued at A$25 million and Australia’s imports of services from Peru are worth A$21 million. The major Australian services exports are education and related travel, which account for A$22 million; and personal travel excluding education, which account for A$2 million. Major Australian service imports account for personal travel excluding education A$20 million and business travel A$41 million.
Opportunities
Australia has the potential to tap into the Peruvian market with possibilities in the franchising system. Peru is home to some well-known North American franchises that have had solid results, eg. Starbucks, McDonald's, TGI Fridays, etc.
The total incomes for franchises in Peru is US$300 million. Eighty-five per cent of the franchises are foreign and from those, 65 per cent come from USA. Ninety-five per cent of the franchises are located in Lima. Franchises in Peru invoice US$250 million and more then US$1 million in royalties. Franchises have generated 10,000 jobs and 80 per cent have been in fast food restaurants.
There are close to 100 foreign franchises, mostly from the US operating via licensing agreements in Peru. These include:
- Benihana
- Burger King
- Chilis
- Dino's
- Dipping Dots
- Domino's Pizza
- Dunkin' Donuts
- KFC
- McDonald's
- Papa John's Pizza
- Pizza Hut
- Starbucks
- Subway
- TGI Friday's
Non-restaurant franchises include Cosmic Bowling, GNC (health products and vitamins), Gold's Gym and Sir Speedy (printing), all from the US.
Foreign hotel chains include Best Western, Doubletree, Holiday Inn, Marriott, Sheraton and Sonesta (USA), Accor (France), Orient Express (UK), Sol Melia (Spain) and Swissotel (Switzerland).
The number of Peruvian tourists could grow if local travel agents and wholesalers are trained and well informed about Australia. The numbers of Peruvian tourists going to Australia has been growing in the last years with very little promotion. The trend is towards increasing the number of Peruvians travelling to Australia due to the increase in business and students travelling to Australia as they contribute to increasing the flow of tourists.
Australian service companies especially in mining, financial and IT areas show great potential in the Peruvian market. For example companies such as Mincom, Fractal, Mapteck and more, have offices in the market while companies such as Surpac, JK Tech, Runge, Metech and Limn are represented by a local company. |