U.S. exporters find new paths to profits in Spain

Business America, August 23, 1993 by Amy Wei

Other popular forms of direct marketing in Spain are teleshopping and Ibertext. Teleshopping is similar to the American home shopping channel, in which the customer shops for the product via television and places an order by telephone. This service offers products not typically found in the market, such as various types of exercise equipment. Teleshopping presents a wider range of products than a store could accommodate. Interestingly, since the introduction of private television in 1991, private stations have influenced the programming of most channels (both public and private) to allot time for teleshopping services.

Ibertext is a modern, online, interactive information system, similar to CompuServe which is well known throughout the United States. After purchasing a terminal or access card, Spaniards can tap into a large number of professional interactive computer services. Sponsored by Telefonica, Ibertext provides access to grocery and department store shopping from one's home, as well as to the Yellow Pages and bank accounts. The use of advertising on Ibertext by businesses is widespread, since its popularity is expected to increase, as in France where the system reaches over one-third of the population.

Street vendors in Spain make up a surprisingly high share (10 percent) of total Spanish retail revenues. With approximately 2 million registered vendors identified, street vending accounts for 13-15 percent of total retail outlets in Spain. Street vendors operate mainly in the popular Spanish flea markets and as traveling salespeople. About 60 percent of rural housewives and 30 percent of urban housewives purchase regularly from street vendors, yet the number of traveling salespeople is actually decreasing because Spaniards are increasingly reluctant to open their homes to strangers. Even so, their services are still vital to isolated areas of Spain where there is no closer access to a retail market.

Since the mid-1980s, street vendors in Spain have become more professional and better trained on the average. Street vending as a profession has absorbed a large percentage of the recently unemployed population who tend to be better educated and more informed about the market than previously. These unemployed workers are drawn to street vending because only a small investment is required to operate a stand as opposed to a traditional retail shop or franchise.

Suppliers tend to favor street vending since the vendor traditionally pays in cash upon receipt of the wholesale merchandise. The leading products sold are books, clothing, sportswear, gadgets, hardware, software, toys, and electrical goods. Street vendors are forming purchasing centers, similar to U.S. cooperatives, which have offices that are in charge of buying for the group's members, thus ensuring lower merchandise costs. Although still in the development stage, purchasing centers may be useful future contacts for American exporters who could eventually distribute their consumer goods profitably and efficiently through street vendors.