How Are SMEs Classified In LATAM?

Among the tasks of market research is understanding the different types of consumers. In most cases these are natural people like you and me. However, there are others that are companies. With the rise of entrepreneurship in recent years, different countries have encouraged a greater number of individuals to open their businesses formally. In order to understand this segment, a series of classifications have been established.

The way in which companies are segmented depends in any case on the country. This is because each State has very different political and economic realities from even its immediate neighbors. Therefore, national criteria may vary from one territory to another. However, for the purposes of this blog post we will refer to the cases of the two largest markets in Latin America: Brazil and Mexico.

Based on data from SEBRAE and INEGI, the criterion of number of employees is imposed; In the Brazilian case, the sales criterion is also used, but that applies in other government areas. Below we list the types of companies that exist in these two countries.

Micro. They are the basis of the countries’ economy. They usually represent the bulk of the number of economic units. Addressing market research with this segment is very accessible given the enormous size of the universe. In general, it can represent close to 90% of all companies accounted for. In Brazil, commerce and services units with up to 9 employees and industry units with up to 19 employees fall into this category. In Mexico, micro companies are considered those that have up to 10 employed people.

Small. This is the next step in the classification. Its universe is much smaller and is around 5% of all businesses in the countries in question. In Brazil, commerce and service companies with between 10 and 49 employees and industrial companies with between 20 and 99 employees are considered within this group. In the case of Mexico, units are classified as having between 11 and 50 employed people.

Midsize. As can be inferred from the previous segments, the business universe of this group is smaller than the previous ones, around 1% of the total population. In the case of Brazil, economic units of commerce and services with between 50 to 99 employees and industry units with between 100 and 499 employees can be classified in this category. In Mexico, medium-sized companies are considered units with between 51 and 250 employed people.

Big. These are businesses that are widely recognized nationally and that dominate the market for their brand offerings. Accessing these units is quite difficult given their size and small number. When we refer to the case of Brazil, we can characterize as large companies those economic units of commerce and services with more than 100 employees and those of industry with more than 500 employees. In Mexico, these are all units with more than 251 employed people.

Each sector has its particularities when it comes to addressing them for a research project. As these are companies with different degrees of organizational complexity, it is necessary to adjust the approach plans with realistic scenarios. As a general rule, the larger the company, the more resources will be necessary to ensure the participation of the economic unit to participate in our invitations.

Thanks to our more than 20 years of experience, Acertiva can advise you when you need to carry out market research in our region. Our analysts and strategic allies are ready to collaborate with your work team and you in the main markets of our territories. Write to us today so that together we can make your next success story a reality.

Fotografía de un plato con feijoada. Imagen de geraldoobici en Pixabay. (Español) / Fotografia de prato com feijoada. Imagem de geraldoobici no Pixabay. (Português) / Photograph of a dish with feijoada. Image by geraldoobici on Pixabay. (English)