Retailer Consumer Finance and Banking in North and Latin America

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Retailer Consumer Finance and Banking in North and Latin America is a report, based on a survey
of over 1,400 prominent retail brands in 12 countries, about the provision of consumer finance at
the point of sale by major retailers across the Americas. Retailer initiatives in savings deposits,
personal loans, mortgages and international remittances are also considered.

Countries covered are Argentina, Brazil, Canada, Chile, Colombia Costa Rica, Ecuador, Mexico,
Paraguay, Peru, Uruguay and the USA.

In total, the research identifies over 200 consumer finance schemes and well over 180 product
initiatives in retailer banking, thereby providing a definitive analysis of retailer consumer finance and
banking in North and Latin America that goes far beyond the scope of previous published research.

Moreover, the PartnerBASE™ dataset that accompanies the report details each of the many retailer
consumer finance and banking programs traced by Finaccord, specifying the operating models
used by retailers and the identities and ultimate holding companies of the ultimate product
providers in each case.

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Retailer Consumer Finance and Banking in North and Latin America

  1. 1. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Consumer Finance and Banking in North and Latin America © Finaccord Ltd., 2014 1 Retailer Consumer Finance and Banking in North and Latin America Report prospectus March 2014
  2. 2. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Consumer Finance and Banking in North and Latin America © Finaccord Ltd., 2014 2 Prospectus contents What is the research? What is the rationale? What methodology has been used? How do retailers surveyed break down? Which specific retailing groups have been researched What is the report structure? What are the key features of the research? How can the research be used? How can the PartnerBASE™ be used? Who can use the research? What are some of the key findings? What is the cost and format? What other reports are available? How can the research be purchased? 3 4-5 6 7-8 9 10 11 12 13 14 15-18 19 20 21 Page
  3. 3. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Consumer Finance and Banking in North and Latin America © Finaccord Ltd., 2014 3 What is the research? Retailer Consumer Finance and Banking in North and Latin America is a report, based on a survey of over 1,400 prominent retail brands in 12 countries, about the provision of consumer finance at the point of sale by major retailers across the Americas. Retailer initiatives in savings deposits, personal loans, mortgages and international remittances are also considered. Countries covered are Argentina, Brazil, Canada, Chile, Colombia Costa Rica, Ecuador, Mexico, Paraguay, Peru, Uruguay and the USA. In total, the research identifies over 200 consumer finance schemes and well over 180 product initiatives in retailer banking, thereby providing a definitive analysis of retailer consumer finance and banking in North and Latin America that goes far beyond the scope of previous published research. Moreover, the PartnerBASE™ dataset that accompanies the report details each of the many retailer consumer finance and banking programs traced by Finaccord, specifying the operating models used by retailers and the identities and ultimate holding companies of the ultimate product providers in each case.
  4. 4. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Consumer Finance and Banking in North and Latin America © Finaccord Ltd., 2014 4 What is the rationale? A number of factors, some of which are specific to consumer finance or banking and some to retailing, provide the rationale for the development of this report. With reference to consumer finance and banking, in particular, these factors include those which follow: - the consumer credit markets of many countries are continuing to grow and retailers can take advantage of this through setting up their own consumer finance schemes; - in terms of the outright number of opportunities, retailing is one of the most important fields in which providers of consumer finance can establish partnerships; - retailer-branded banks can represent an attractive alternative to mainstream consumer banks in markets in which banking sector consolidation has reduced the range of options available; - the customer information gathered from consumer finance and banking products can be used to cross-sell insurance and other services. Furthermore, dynamics in the retailing market itself also give rise to increasing rationale both for retailer consumer finance and banking and a comprehensive pan-American study on the subject.
  5. 5. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Consumer Finance and Banking in North and Latin America © Finaccord Ltd., 2014 5 What is the rationale? (continued) Key developments in the retailing sector include: - an improving environment for consumer lending, thereby encouraging retailers to develop their own consumer finance schemes in order to capture a share of this market; - retailer consolidation in both more and less developed markets which helps to produce national champions with the branding, muscle and general profile needed to succeed in the consumer finance and banking sectors in these countries; - retailer growth in the less developed markets as an increasing proportion of consumers allocate their expenditure to formal retailing concepts as opposed to informal street markets and the like; - a mature environment for retailing in the more developed markets which signifies that retailers need to investigate new means of achieving revenue growth which can include financial services, in general, and consumer finance and banking, in particular; - increasing internationalisation which potentially paves the way for cross-border alliances between retailers and mainstream banks as epitomised, for example, by the link between Carrefour and BNP Paribas Personal Finance.
  6. 6. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Consumer Finance and Banking in North and Latin America © Finaccord Ltd., 2014 6 What methodology has been used? The main research input into this study is Finaccord’s on-going investigation of the involvement in financial services, in general, and consumer finance and banking, in particular, of over 1,400 major retailing brands across 12 countries in North and Latin America. In the specific context of this report, the aim of the investigation is to gather top-level data concerning the consumer finance and banking products offered by the organisations in question, the operating models that they use and the providers with which they work in this context. Naturally, given that there are literally millions of smaller retailers in total in the territories reviewed, the majority with just a single outlet, Finaccord has sought to focus on the very largest entities that are likely to be of most strategic interest to organisations involved in the consumer finance and banking sectors. Indeed, the major retailers break down by category and by country as illustrated in the graphics overleaf.
  7. 7. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Consumer Finance and Banking in North and Latin America © Finaccord Ltd., 2014 7 How do retailers surveyed break down? (1) BY TYPE BY DISTRIBUTION MODEL Fashion, 218 Supermarket / hypermarket, 288 Consumer electronics, 236 DIY / furniture / home, 133 Health and beauty, 85 Speciality, 107 Fuel, 79 Department store / variety, 148 Sporting goods, 74 Books and media, 45 Offline only, 631 Online only, 156 Mixed, 626
  8. 8. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Consumer Finance and Banking in North and Latin America © Finaccord Ltd., 2014 8 How do retailers surveyed break down? (2) BY COUNTRY US,501 Canada,212Brazil,211 Argentina,98 Mexico,83 Chile,69 Colombia,54 Peru,47 Ecuador,46 Costa Rica, 34 Paraguay,30 Uruguay,28
  9. 9. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Consumer Finance and Banking in North and Latin America © Finaccord Ltd., 2014 9 Which specific retailing groups have been researched? Among the major retailing groups included in the research are: Abercrombie & Fitch Aeon Ahold Aldo Alpargatas Amazon American Apparel AmerisourceBergen Ann Taylor Associated Wholesale Grocers Berkshire-Hathaway Retail Best Buy Canadian Tire Caro Cuore Carrefour Casa & Ideas Casino Group Cencosud Charming Shoppes Chedraui Chico's Controladora Comercial Mexicana Corporación El Rosado Corporación La Favorita Costco D'Avó Din Empresas Ripley Expert International Extreme Retail Exxon Mobil Falabella Famsa Furniture Row Companies Gap Grupo Carso Grupo Deib Otoch Grupo Elektra Grupo Exito Grupo Gigante Grupo Inditex Grupo Pão de Açúcar Grupo Vierci Home Depot Home Hardware Houchens Industries Hudson's Bay Company IAC IFH Peru Katz Group Kering Kroger Limited Brands L'Oreal Luxottica Group Macy’s Mango McKesson Pharamceuticals Men's Wearhouse Metro Mimo & Co Office Depot Olímpica Overwaitea Petrobras PetSmart Pintuco Raley's Reitmans Repsol Safeway Salcobrand Savemart Sears Seven & I Shell Shoppers Drugmart SHV Makro Soriana Staples Sun Capital Partners SuperValu Tengelmann The North West Company TJX Transworld Entertainment Walmart Weston Whole Food Markets Williams-Sonoma
  10. 10. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Consumer Finance and Banking in North and Latin America © Finaccord Ltd., 2014 10 What is the report structure? 0. Executive Summary: providing a concise evaluation of the principal findings of the report. 1. Introduction: offering rationale, description of methodology and other related notes. 2. Regional Overview: a pan-American overview of the activity of major retail brands in consumer finance and banking. As well as a comparative analysis of operating models used in these areas, this section also analyses the importance of providers owned by major financial, retailing and other groups such as Alliance Data, Citigroup, Falabella and Itaú Unibanco. 3. Argentina: an in-depth analysis of the market for retailer consumer finance and banking in Argentina. Key partnerships are identified between major Argentine retail chains and providers of consumer finance, and detailed commentary is also provided to describe the involvement of the same universe of retailers in the field of banking products, namely savings deposits, personal loans, mortgages and international remittances. 4 - 14: chapters for all other countries are structured along similar lines to that for Argentina. 15. Appendix: this final section provides a comprehensive listing of retailers operating in the areas of consumer finance or banking through captive or joint venture providers.
  11. 11. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Consumer Finance and Banking in North and Latin America © Finaccord Ltd., 2014 11 What are the key features of the research? Key features of this report include: • definitive coverage of the involvement in consumer finance and banking of over 1,400 major retail brands in 12 countries in the Americas; • focus on over 200 consumer finance schemes: which providers of point-of-sale finance are strong in which countries and with which retailers do they collaborate? • comprehensive listing of retailers using captive or joint venture point-of-sale finance divisions or subsidiaries for their consumer finance schemes; • identification of over 180 individual product initiatives in retailer banking including the split by country, retailer category and retailer distribution model (i.e. offline-only, online-only and mixed); • identification of numerous consumer finance and banking product providers with which major retail chains co-operate including both long-established banking organisations and innovative new entrants.
  12. 12. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Consumer Finance and Banking in North and Latin America © Finaccord Ltd., 2014 12 How can the research be used? You may be able to use this report and the PartnerBASE™ that accompanies it in one or more of the following ways: • gain rapid access to a unique pan-American source of intelligence covering virtually all significant retail brands across an extremely wide range of geographies; • appreciate how the prevalence of initiatives in retailer consumer finance and banking varies by country, by retailer category and by retailer distribution model; • monitor the activity of key national and international competitors in the retailer consumer finance sector including subsidiaries of Cencosud, eBay, GE and Walmart; • evaluate the potential for acquiring the existing consumer finance portfolios of retail groups by purchasing equity stakes in captive finance entities or taking over internally-managed schemes; • learn more about the growing number of retailer banks in the Americas including Banco Azteca, Banco Paris, Banco Ripley, Banco Walmart, BanCoppel, Bluebird, Canadian Tire Bank and Midway Financeira.
  13. 13. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Consumer Finance and Banking in North and Latin America © Finaccord Ltd., 2014 Retailer Category Country Product type Product offered? Operating model Partner(s) UHC(s) of partner(s) Coppel Department store / variety Mexico Consumer finance Yes Captive partner BanCoppel Coppel Coral Hipermercados Supermarket / hypermarket Ecuador Consumer finance No Corbeil DIY / furniture / home Canada Consumer finance Yes External partner TD Financial Services TD Bank Corello Fashion Brazil Consumer finance No Corona Department store / variety Chile Consumer finance Yes Captive partner Sociedad de Créditos Comerciales Corona Corona DIY / furniture / home Colombia Consumer finance Yes Captive partner Banco Falabella Falabella 13 How can the PartnerBASE™ be used? Filter by type of retailer Choose operating model Identify product providers Look up specific retailers Filter by product type Select country Identify ultimate owners of partners
  14. 14. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Consumer Finance and Banking in North and Latin America © Finaccord Ltd., 2014 14 Who can use the research? 1. Consumer finance companies: this study is an up-to-date and comprehensive source of information about retailer consumer finance in 12 countries and represents an indispensable guide to over 200 retail brands that operate consumer finance programs; 2. Banks and insurance companies: consumer finance schemes can form an effective basis either for developing broader retailer banking operations or for marketing a range of insurance products to large and well-defined groups of consumers; 3. Retailers: consumer finance programs represent an important activity for numerous retail brands in North and Latin America but how do they organise their involvement in this field and with which partner organisations do they collaborate? 4. Providers of international remittance services: in addition to coverage of the mainstream banking products of savings deposits, personal loans and mortgages, the research also identifies partnerships between major retailers and providers of international remittance services; 5. Management consultancies: are you either assisting a retailer with the development of a consumer finance or banking scheme or advising a bank or other lending institutions with respect to partnership opportunities with major retail brands? This research will help you to evaluate the options in retailer consumer finance and banking, saving time and effort on researching the subject yourself.
  15. 15. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Consumer Finance and Banking in North and Latin America © Finaccord Ltd., 2014 15 What are some of the key findings? 1. Retailers in two categories – namely, department store / variety and consumer electronics – are the most likely to have established schemes for consumer finance Source: Finaccord PartnerBASE 0% 20% 40% 60% 80% 100% Books and media Consumer electronics Department store / variety DIY / furniture / home Fashion Fuel Health and beauty Speciality Sporting goods Supermarket / hypermarket Online only Offline only Mixed % of major retail brands investigated with a consumer finance scheme 2.2% 21.6% 31.1% 18.8% 9.2% 2.5% 7.1% 17.8% 9.5% 9.0% 14.7% 10.7% 17.9%
  16. 16. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Consumer Finance and Banking in North and Latin America © Finaccord Ltd., 2014 16 What are some of the key findings? (cont.) 2. Across the 12 countries, over 200 major retailers surveyed have an arrangement for consumer finance with a significant number of these using a captive or funding them on an internal basis Source: Finaccord PartnerBASE 0% 20% 40% 60% 80% 100% Provision rate Operating model (see legend) Other Internal Joint venture partner Captive partner Multiple external partners External partner
  17. 17. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Consumer Finance and Banking in North and Latin America © Finaccord Ltd., 2014 17 What are some of the key findings? (cont.) 3. When its point-of-sale finance partnerships are viewed in weighted terms, LuizaCred seems likely to be the second-ranked provider in Brazil UNWEIGHTED SHARE OF PARTNERSHIPS WEIGHTED SHARE OF PARTNERSHIPS Source: Finaccord PartnerBASE Caixa Econômica Federal, 11.8% Cred-System, 11.8% Itaú, 11.8% Losango, 11.8% Practicard, 11.8% Banco do Brasil, 5.9% Bradesco, 5.9% Colombo Consórcio, 5.9% CrediShop, 5.9% LuizaCred, 5.9% Midway Financeira, 5.9% Pernambucanas Financiadora, 5.9% Caixa Econômica Federal, 25.1% LuizaCred, 23.4% Colombo Consórcio, 18.0% Midway Financeira, 10.4% Banco do Brasil, 8.9% Itaú, 5.5% Cred-System, 4.3% other, 4.5%
  18. 18. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Consumer Finance and Banking in North and Latin America © Finaccord Ltd., 2014 18 What are some of the key findings? (cont.) 4. Key findings from the executive summary include: • Argentina hosts the retailers most likely to offer consumer finance with a provision rate of 23.5%, followed by Mexico at 22.9% and Paraguay at 20.0%; • working in conjunction, the US-based duo of Bill Me Later (run by PayPal and thus owned ultimately by eBay) and Alliance Data's Comenity Bank is identifiable as the most common provider of point-of-sale consumer finance in the Americas; • 53 different entities are reported as non-internal partners of retail brands for consumer finance schemes identified - many of these are entities in which the retail brands have no ownership stake although a total of 22 different captive and joint venture providers are visible in consumer finance, with 15 also active in retailer banking, and with some overlap between these two groups; • at 12.8% of department store and variety retail brands researched, this is the retailer category that is most likely to be involved in mainstream banking, followed by supermarket and hypermarket brands, at 11.8%.
  19. 19. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Consumer Finance and Banking in North and Latin America © Finaccord Ltd., 2014 19 What is the cost and format? Retailer Consumer Finance and Banking in North and Latin America is available as a standard PDF document. The PartnerBASE™ that accompanies it at no further charge is in Excel format. Costs for this research set and selected other comparable, international titles are as follows: * For UK-based clients, VAT at the prevailing rate will be added to the basic price. Costs quoted are for a single site user licence only. For a corporate user licence, please see the final slide for further details. Invoices can be paid in EUR or USD, at the prevailing exchange rate, if preferred. For acquisition of multiple reports, please contact Finaccord - discounts may be available. Retailer Consumer Finance and Banking in North and Latin America GBP 995 Global Retailer Consumer Finance and Banking GBP 2,495 Global Retailer Insurance and Assistance GBP 2,495 Global Retailer Online Payment Acceptance GBP 3,495 Global Retailer Payment, Gift and Loyalty Cards GBP 3,495 Retailer Consumer Finance and Banking in the Asia-Pacific Region GBP 995 Retailer Consumer Finance and Banking in Europe GBP 1,295 Retailer Insurance and Assistance in the Asia-Pacific Region GBP 995 Retailer Insurance and Assistance in Europe GBP 1,295 Retailer Insurance and Assistance in North and Latin America GBP 995 Retailer Online Payment Acceptance in the Asia-Pacific Region GBP 1,295 Retailer Online Payment Acceptance in Europe GBP 1,995 Retailer Online Payment Acceptance in North and Latin America GBP 1,295 Retailer Payment, Gift and Loyalty Cards in the Asia-Pacific Region GBP 1,295 Retailer Payment, Gift and Loyalty Cards in Europe GBP 1,995 Retailer Payment, Gift and Loyalty Cards in North and Latin America GBP 1,295
  20. 20. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Consumer Finance and Banking in North and Latin America © Finaccord Ltd., 2014 20 What other reports are available? Australia GBP 795 France GBP 795 Malaysia GBP 795 South Korea GBP 795 Brazil GBP 795 Germany GBP 795 Mexico GBP 795 Spain GBP 795 Canada GBP 795 India GBP 795 Poland GBP 795 Turkey GBP 795 Chile GBP 795 Italy GBP 795 Russia GBP 795 UK GBP 795 China GBP 795 Japan GBP 795 South Africa GBP 795 USA GBP 795 Retailer Payments, Banking, Insurance and Assistance in... A variety of country-specific reports and associated PartnerBASE™ datasets about retailer payments, banking, insurance and assistance are also available from Finaccord, as listed below. These are based in part upon the same research programs as the multi-country titles but focus instead on particular countries. * The same notes apply here as on the previous page
  21. 21. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Consumer Finance and Banking in North and Latin America © Finaccord Ltd., 2014 21 How can the research be purchased? Simple. Just go to the relevant area of the Finaccord web site available at http://www.finaccord.com/order_global_rfsr.htm and fill in the online order form, clearly indicating: • report required • type of corporate user licence, if required * • billing name • address and e-mail address • purchase order number, if applicable Please allow up to one working day for the delivery of electronic copy by e-mail. * For the corporate user licence please choose one of the following options: 1. One office, one country: no supplement over and above basic cost of reports ordered 2. Multiple offices, one country: additional 20% over and above basic cost of reports ordered 3. Multiple offices, two to ten countries: additional 50% over and above basic cost of reports ordered 4. Global (unlimited offices in unlimited countries): additional 100% over and above basic cost of reports ordered VAT at the prevailing rate will be added to the price of any corporate user licence acquired by UK-based buyers.

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