A couple months back, I originally posted my thoughts on why the Latinx population presents a major market opportunity for entrepreneurs. Since then, I continued researching the space and wanted to share my new findings.
Unique Behavioral Factors
Families are very tight
- While I don’t have any statistics to back this up, lived experience has shown me that Latinx are maintain relatively tight family relationships. Regular family bonding time is table stakes, and typically extended family (cousins, aunts, uncles) meet regularly for family reunions and treat each other as brothers and sister would. What this entails for business opportunities is that Latinx are more likely to participate in group activities, such as group outings or group buying, with their built-in “network” (extended family).
- Another unique behavior I’ve seen is how extremely brand loyal Latinx is. Latinx will go to great lengths to purchase from brands that they know and trust and are relatively hesitant to switch over to an unknown offering, especially if it doesn’t speak to them. Growing up, I remember brands such as Coca Cola and Goya constantly in my life. The Group Advertising posted some interested insights that show the extent to which Latinx over-indexes on brand loyalty.
- 27% of Latinx live in multi-generational households vs 20% of the general population. Given that families are so tight, this should be no surprise. In Latin American countries, this behavior is even more pronounced. From my time spent in Bolivia, I remember that none of my cousins would move out of their parents’ house until they got married. While times are slowly changing and children are moving out sooner these days, Latinx still is very different in this respect compared to the general population.
- Latinx is more religious than the general US population, due in part to the Spanish conquistador influence beginning centuries ago. This behavior has carried on to the immigrant populations in the US. According to a Pew Research survey, 14% of Latinx indicated no religious affiliation compared to 19% for the general population.
While these unique behavioral tendencies will likely fade over generations as Latinx assimilates to American culture, I believe these trends will persist at least for the next couple of decades, especially if immigration continues at the rate projected by many research firms.
Updated Market Map
Through conversations with many Latinx in the startup ecosystem, I’ve identified additional startups that are directly/indirectly focused on Latinx.
Still, the lack of companies overall points to an incredible market opportunity for entrepreneurs that can find a defensible wedge into this market. As always, feel free to comment on the post if I’ve missed any!