What does the LATAM market look like heading into 2022?
Now that Mapon has dedicated its second year to growing our business in Latin America with the help of our Spanish branch, we can once again share our thoughts on the market situation in LATAM.
As discussed last year – the LATAM market is definitely oversaturated. There are many players operating on a small scale with very similar solutions, thus, making the market very price sensitive. And although it’s oversaturated, it’s still fairly open to those with unique offers. As of yet Mapon has only managed to get its foot in the door to the LATAM market. But we believe that with the help of successful partnerships we can definitely help the local players present unique offers.
Over the course of the last few years we’ve updated our platform to match the needs of the market and are ready to scale up. In our experience, a sustainable business in telematics starts at around 1000 – 5000 units installed, depending on the niche of the player. Working with partners of this scale allows us to provide high quality onboarding and client support processes, and improve our platform to match the market needs.
Rising software development costs
In the last few years we’ve also seen a significant rise in development costs in the region, which can be explained by everyone accepting remote work as a viable way of employment. It doesn’t matter where you’re located physically. What matters is the employer and what he’s willing to offer.
The move to higher software development costs puts a strain on local software developers in terms of high competition. From our perspective, it’s an advantage. Although Mapon development takes place in Europe, which has its own costs, our scale allows us to keep the price of the platform on a competitive level while keeping it up with market needs.
If there’s one aspect where the LATAM market stands out – it’s the need for various security solutions and technologies. Fuel level sensors, door sensors, engine blocking solutions, all of these are considered as standard solutions in the region from both – software platform providers and hardware manufacturers.
A step further is video telematics solutions, which we’ve been developing over the course of 2021 and are expecting to launch in the spring of 2022. The upcoming video solutions have already piqued considerable interest for Mapon partners.
Another security aspect that’s important for keeping all of this together is connectivity. Cellular connections can be and actually are often blocked during robbery attempts and therefore increasing interest for connectivity suppliers that are hard to detect and/or block such as the Sigfox communication network.
We’ve seen that the laws in several countries require active transport visibility. There are several aspects to this – traffic safety (speed control), road usage aspects and monitoring cargo transportation all of which helps with monitoring potential tax fraud or other misbehaviour where transport companies are involved. In response to this we’ve recently completed SUTRAN integration which is a Peruvian government required integration for trucks.
When it comes to national governments, in recent years they’ve also been actively promoting the move to electric vehicles by providing subsidies and other incentives for the fleet owners to go electric. And what we see today is that
there are some countries such as Uruguay, that are way ahead of other countries worldwide, therefore, require adapted solutions from software providers.
Although the in-person events were starting back up this year, we decided to postpone our participation till next year and make our debut in Expo Seguridad Mexico 2022, which will take place at the end of June. Having participated in GITEX Technology Week this year and visiting Expo Seguridad this year as spectators, we’re confident in our debut in just a few months. Who knows, maybe this show will bring us closer to opening an office in the region?
Sorry! We just can’t skip this part, but promise to be short about it!
The bad news is that chip shortage has been a challenge for the past two years and we don’t see it being solved anytime soon. Our experience shows that sometimes hardware manufacturers are holding back smaller orders for minor partners, while still working with bigger partners and supplying hardware. The good news, however, is that we can help our partners with device purchases, as we work with the most popular hardware manufacturers directly.
To sum up, Mapon has experienced a decent growth in Latin America in 2021. And even though the upcoming year is bound to have its struggles, we’re optimistic and hope to accelerate our growth in 2022.