Guatemala Market Insight: Shooting, Hunting, and Outdoor ProductsGuatemala Outdoor Products

Post: Guatemala City, Guatemala    
Foreign Commercial Specialist:  Antonio Prieto




 

Guatemala Overview:

Private security has a bigger market and more opportunities for U.S. exporters in Guatemala.  The private security sector in Central America is large and growing fast; the Northern Triangle Countries have the largest concentration of private security companies in the region.

There are currently 200+ companies offering private security guards or security products in the Guatemalan market, with 133,000 private security guards, 35,000 active police officers, and more than 1.9 million registered guns in the country.

Opportunities in the Guatemala Shooting, Hunting, and Outdoor Products Markets:

Businesses in the Northern Triangle (Guatemala, El Salvador and Honduras) suffer from security issues affecting their property, employees and business operations. Most security issues derive from the prevalent gangs that operate in the Northern Triangle through extortion, thefts, and threats against employees’ personal safety. Companies in the region report spending up to 20% of their budgets on safety/security equipment and services to safeguard their employees and operations.

U.S. companies have a unique opportunity to showcase their safety and security solutions in these markets, also the U.S. Government is supporting the Alliance for Prosperity in the Northern Triangle, a plan to respond to the economic and social challenges in the region, including rampant violence and insecurity affecting Guatemala, Honduras, and El Salvador. 

U.S. companies can also take advantage of the CAFTA-DR Free Trade Agreement, which has created a more stable and transparent trading and investment environment, making it easier and cheaper for U.S. companies to export their products and services to trading partner markets.

Outdoor recreation has a niche market amongst outdoor enthusiast in the country; nature hikes to volcanos and mountains are very popular for tourist and locals.  Hunting is not practiced due that many of the native wildlife species are endangered but target practice is very popular in the country.

The most important security project in the region is the Alliance for prosperity in the Northern Triangle Plan that includes $1 billion in aid for the region, local Governments will match this budget as well with their own funds in order to meet the requirements to create security, investment and job creation conditions in the region. 

In the Countries plans they are looking into the modernization of their security forces as well as recruit, train, and deploy additional police over the next three years; that will require equipment and guns to equip the new police forces.

Succeeding in the Guatemala Shooting, Hunting, and Outdoor Products Markets:

Guatemala’s market is very competitive therefore companies with new technologies and trends have the most chances of success. Companies with well-known brands also have a better chance of success as Guatemalans tend to look for named brands.

The free trade agreement “DR-Cafta” is a great advantage for U.S. exporters; nearly 95% of U.S. products enter the country free of import tariffs.  Products exported from Europe or Asia pay between 5%-20% in import duties making the U.S, products very competitive. 

Guatemala is the second largest market for U.S. exports among the DR-CAFTA countries (USD 5.9 Billion in 2015) and has experienced a solid growth since the Agreement entered into force. Guatemala’s main trading partner is the United States of America; 39% of the total imports are from the U.S.  

Another factor is the shipping costs; because of the nearness of the U.S. shipping costs are lower and more frequent than Europe or Asia.

It is always a plus to have export experience, but for exports from the U.S, due to the free trade agreement all the regulations and requirements where accepted and well stablished by participating countries. The treaty’s spirit is to facilitate trade amongst countries; therefore there is no last minute change of regulations or surprises. There are no trade barriers for outdoor and / or security products for U.S. exports.

Selling to Guatemalan Consumers:

The most important decision a U.S. company has to make is to choose a local representative. The best strategy is to screen potential importer-distributors, and select the most qualified.

The chosen importer should be a company that is registered to sell to the government and can participate in official tenders and bids. Also this company needs to know the private market and have constant communication with the private sector as well as the National Police.

Once the exclusive representation is given to a Guatemalan importer it is difficult to take it back because of the representation law in Guatemala, so it is necessary to have a good relationship and chose the correct representative. The legal system can be slow and the law, under certain conditions, offers local agents a great deal of protection.

Formal agency or distribution agreements should be reviewed by a Guatemalan attorney hired by the U.S. exporter (independent of the Guatemalan party with which the agreement is being established). 
Also, it is very important to protect your IPR in advance, this means registering the name and/or brand you own, doing so may prevent a company for long years of court discussions.

eCommerce for the Shooting, Hunting, and Outdoor industry at this point is not a viable sales channel, and is primarily used for advertising and to show the brands/products importers sell. Most of the importers and retailers in the industry have a website or Facebook page with pictures and prices of the products and brands they carry.  To this point, transactions are not done via ecommerce at this moment.

Stores sell a variety of products like tactical gear, equipment, guns, ammo and outdoor products. Most companies do their own imports, wholesale and retail.