My wife and I had the unexpected pleasure of spending three days in Havana, Cuba last week, a coveted destination for me since the embargo was lifted.
Our official reason for going — the U.S. Government provides 12 — was people-to-people. Given my love of retail, we decided to make this the focus of our trip.
First, let me share a couple of details on Havana. It’s hard to describe, but everything is in shambles – from the roads to the roofs to the stairways inside every building. It’s almost impossible to escape the crumbling architecture. However, it’s easy to see the beauty that once existed and why Michael Corleone wanted to invest there. It’s hard not to close your eyes for a moment and daydream about a rebirth.
Second, it’s important to forget everything about our everyday way of life and remember that in Cuba the government owns almost everything with most products sold through government stores.
Recently, Cuba started allowing small businesses and entrepreneurs to sell directly to consumers. This has led to a proliferation of vendors around Havana – everything is a commerce opportunity. Cubans are selling goods in the stairwells of apartment buildings, offering everything from T-shirts with images of Che Guevara, to Cuban magic boxes and rattles, paintings and handbags with Cuban flags and images.
Third, the country has been under an embargo and so there’s no America there. No McDonald’s, no Starbucks, no Coca-Cola and no Yuengling (made at America’s oldest brewery for those of you not from Pennsylvania). I’m not saying whether this is a good or bad thing, I’m just pointing it out.
Retail, like in any major city, takes many different forms, from a roadside fruit stand to a kiosk to a tourist trap full of remembrances of your journey.
Becoming a retail-store owner requires a license from the government. Most retailers rent the space and pay the government a monthly license fee plus 10% of sales.
An example is this spot owned by Luis. He gets his goods both from the government and from locals who hand craft some of the items. Speaking of locals selling goods, during our visit the cracker guy, who sells door to door, stopped by to drop off an order. We witnessed this happening all over the place.
Markets (below-left picture) are located throughout Havana and are interesting to visit. Some are stocked with general items e.g. soda, fruits and vegetables, basic toiletries, while separate locations sell meat, fish, and poultry. In either scenario, access to products and supplies is limited and cleanliness is, well…yikes!
A few shops, such as this bespoke government-owned perfumery (below-right picture), were absolutely stunning and could have been seen in any hot shopping district in the U.S.
On the contrary, government-subsidized ration stores sell rice, sugar, oil, beans and salt and other basics. Customers bring a notebook to keep track of their purchases.
While American brands might not be present in Cuba, it doesn’t mean that big brands haven’t been adopted. We frequently saw Samsung, Nokia, Lacoste, Haier, Adidas, and Puma while exploring.
Despite our best intentions to bring back gifts for our friends and family, this proved to be quite difficult; unless of course, your vices are rum and cigars, in which case Havana is the place!
The question is, what is the real opportunity for retail growth in Havana. Our experience taught us the people are capable, ready and hungry for change. Paladars (homes converted into restaurants) and Airbnb’s are showing up everywhere and as we said commerce opportunities exist every five steps. The challenge is a combination of citizens with little to no disposable income, limited access to the goods they need, controls on how they can market them and an expensive and spotty Internet service.
We have high hopes for the people of Cuba, who are happy to see Americans as they stated we are good customers and spend money so I encourage you to book your flights, make the journey and let me know about your experience. And most importantly, spend time talking and listening to the people!
By the way, a good article and one that I referenced a few times in this one can be found here: https://nrf.com/news/cuba-rising.