The ECCL partner project of ECIA published a useful brochure on bringing your business to Brazil, a follow up on the study visit in February 2014. The brochure provides useful advice for European SMEs who want to explore the field in Brazil.
WOJCIECH BACZYŃSKI
Secretary General of the Polish-Portuguese Chamber of Commerce, former Deputy-Consul at the Trade and Investment Promotion Section in São Paulo, Embassy of the Republic of Poland (2009-2013).
Based on my four-year-long observation and residency in Brazil, the undoubted objective attractiveness of the Brazilian market is directly proportional to the level of difficulty encountered while competing on it in reality. Entities that are planning to start up a business in Brazil should, in the first place, shelve among fairytales the vision of the Brazilian “El Dorado” from post-war period of the 20th century. There is no quick, cheap and easy road to success here.
Brazilian market encompasses a federation of 27 states. It covers an area twice the size of the EU (although its majority is almost uninhabited) and its number of consumers exceeds the number of consumers in the EU by a third. Its political situation is stable, its democracy functional and economic growth in the recent years, despite its ups and downs,
is a known fact.
For the European entrepreneurs, this means the existence of a huge market characterised by an increase of the society’s purchasing power, with lots of possibilities in various sectors but also enormous competition.
On the other hand, one cannot forget the challenges Brazil is still facing: the aggressive protectionist import policy, complicated and indolent bureaucracy, ineffective law enforcement and protection of property rights , corruption, problems with education, etc.
Brazil’s population is extremely diverse, being a confluence of many ethnicities and nationalities. Less developed states in the North and Northeast differ significantly in terms of people’s habits (also consumption related ones), culture and business environment from Southwestern states. An entirely different topic is São Paulo, Latin America’s biggest commercial and industrial hub. The respective states compete for investors and enterprises. For this reason, currently out of 500 world’s biggest companies 490 are most probably already doing business directly in Brazil. Cities such as Belo Horizonte, Recife, Vitoria, Curitiba, Porto Alegre, Manaus are commercial and industrial hubs for their respective regions. Understanding and covering the entire spectrum of the Brazilian market in the majority of sectors is possible only in case of relatively few enterprises. Also, market particularities vary from region to region.
European companies should determine their strategy based on market knowledge and verified qualitative information. It is also necessary to define the region, in which to start up business activity and the type of collaborative arrangement with a local partner, something I highly recommend in each case. The first step should include acquiring important information concerning a certain business sector, visiting fairs, identifying main competitors, potential clients and their needs. At the same time, tariff and non-tariff barriers, of which there are great many in Brazil, as well as procedures for importing domestic goods into Brazil should be analysed. After collecting all these data, the enterprise should define its market entry strategy and finally the type of collaborative arrangement with a local partner. In all this, one needs to keep in mind that competing in Brazil is a long-distance race. The main obstacle for European companies are high import duties, taxes and other systemic barriers, only after that comes bureaucracy.
All the aforementioned factors create a general situation that concerns, with no exception, all foreign operators interested in Brazil. To be competitive here, it is crucial to thoroughly understand and constantly adjust to this particular environment.
Contents
The guide contains all sorts of information on the Brazilian social and business climate, an overview of the geographical and economical background, but also some tips on promotion and exhibiting the creative industries and information on the creative sector in Brazil.
The guide was developed by ECCL and the City of Warsaw to enrich the internationalisation process in EU creative clusters.
