- Publicis acquires Practia to expand in Latin America and improve its digital capabilities in the region.
- The decision is based on the rapid growth of digital transformation in Latin America and its potential as a talent market.
- Examples of companies that have implemented nearshoring in the region include Intel, Procter & Gamble, IBM, Dell, Caterpillar, General Electric, and Ford.
Publicis, one of the world’s largest advertising agencies, is expanding its presence in Latin America with the acquisition of Argentina-based Practia.
The purchase will be made by Publicis’ digital arm, Publicis Sapient, the agency confirmed on Thursday, March 30.
Publicis, of French origin, did not give details about how much it will pay for the Argentine technology company, which has a presence in nine countries in the data, engineering and artificial intelligence business.
“The strongest landing in Latin America is generated, first of all, by the fact that digital transformations in this region have been growing rapidly,” he told Reuters the CEO of Publicis Sapient, Nigel Vaz.
And he added: “Secondly, we always knew that we needed create more capacities in Latin America, a true talent market, to support our customers in the US.”
With this purchase, the digital arm of Publicis hopes to “significantly” grow its capabilities in the markets in which Practia already has a presence, although it does not expect to enter new countries, at least for the moment, Vaz said.
With the purchase, Publicis Sapient expects to serve clients in both Latin America and the United States and Canada.
Public procurement practices
Nearshoring is a growing phenomenon in the last decade. It is about the transfer of companies, especially from the United States, that seek to establish themselves in Latin America and the Caribbean (and not in Asia) with the idea of being closer to its customers.
The decision could “help the Latin American market overcome certain challenges that developed markets have,” Vaz said, adding that it also creates opportunities for international companies that invest in regional talent.
One of the companies that has implemented nearshoring is Intel. The US firm invested a billion dollars in a new factory in Costa Rica, where it already had some presence.
The move was seen as a way for Intel to take advantage of the region’s lower costs and proximity to the United States.
Another example is Procter & Gamble, which took operations to Mexico, where it already had a strong presence. The move sought to save about $40 million a year in production costs.
Other companies that have implemented nearshoring are IBM, which has established a presence in countries such as Brazil and Mexico, and Dell, which has moved some of its manufacturing operations from Asia to Latin America.
Caterpillar, General Electric and Ford also transferred some of their manufacturing activities to countries in the region.
Publicis’ decision is based on the fact that it is expected that the Latin American market, which includes ecommerce, digital marketing, cloud-focused solutions, automation and developments in artificial intelligence, reach a volume greater than 200 billion dollars in 2032, according to a study cited by the French agency itself.
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