We at Tellusant conduct trade visits in many countries. So as an aside to our 2024 Global Company Retreat in Panama City, we explored modern and traditional trade.
The video shows a supermarket in Casco Antiguo (Panama City old town). Notice that there is only one checkout counter; the clear labeling of prices; the optimization of categories, brands, and pack sizes, and well kept sheving (not many out-of-stocks).
Trade visits allow us to have a close-up look at the markets we evaluate and to derive useful insights on the environment in which our clients are interested in. Typically, such projects deal with M&A due diligence, market entry strategy, market prioritization, and growth strategy.
The goal of a trade visit is to gain as much qualitative and quantitative insight into a market as possible. We achieve this by investigating three components of the market: consumers, the distribution network, and competitors. We then confirm our findings and supplement our knowledge base with an overview of the political and economic landscape.
• Consumer behavior: We observe differing consumption patterns across demographic groups (e.g. gender, age, income level), and measure consumer sentiment for brands or types of marketing.
• Channel dynamics: We visit the full spectrum of outlets* - from the modern hypermarket to the traditional roadside stall - to interview store managers and understand their needs. We also try to gain a perspective of the S&D (Sales and Distribution) infrastructure to get a sense of the supply chain / value chain.
• Competitors' positions: We look beyond the obvious “Pepsi vs. Coke” competitor view, and further investigate local companies that may not be as visible to a desktop researcher, such as players that operate in adjacent categories and/or players that operate in the informal market,
The size of the visiting team varies based on the project type. An average team consists of 6 people (4 consultants and 2 client team members).
A typical visit lasts about a week, with variation depending on data availability, scheduling and timing challenges, and impact on the final deliverable. A sample trade visit schedule would look like the following:
• Prior to visit: Conduct preliminary analyses to gain a rough perspective of the market, using public data, client data, and TelluBase
• Day 1: Arrive at the capital city (or equivalent large urban center) and interface with the local client office or subsidiary (home base). Take a “first look” with consumers at a few outlets to get an initial sense of consumer behavior and preference (Tuesday)
• Day 2: Visit modern trade outlets in the morning and traditional trade outlets in the evening, based on their high-traffic times of the day. Also interview wholesalers and distributors (Wednesday)
• Days 3-4: Split into teams and visit secondary cities to conduct similar investigation as Day 2. Stop by rural towns and villages along the way if possible (Thursday-Friday)
• Day 5: Re-convene in the capital city, compare findings and conduct further research in suburban or rural areas nearby (Saturday)
• Day 6: Debrief at home base (Boston) to consolidate and syndicate findings (Monday)
The days are long. We typically fly into a city around 9 in the morning, start in the trade around 11, and continue till past midnight (with an afternoon nap). After a week, the team is utterly exhausted.
Trade visits have allowed us to collect invaluable insights, unearth otherwise missing data, and ultimately have full confidence in our recommendations to our clients. Our extensive experience in conducting trade visits have taught us a few lessons, such as:
• Available data on the internet or through data providers tend to underestimate the relevant market’s true size.
• There are more largely-unknown local competitors than one may expect.
• It is important to understand the needs of distributors and wholesalers (e.g. terms of trade, pricing agreements) - simply looking at the needs of the end consumer (or end user) does not yield the whole picture.