4 Reasons to Expand Your Business to Brazil

Delivered by FedEx.     Why should you do business in Brazil? I can give you 200 million reasons. That’s the number of consumers your smal
August 02, 2010

Delivered by FedEx. 

 

Why should you do business in Brazil? I can give you 200 million reasons. That’s the number of consumers your small business can reach in this South American country — more than five times as many as live in the state of California. But sheer scale and size aren’t the only reasons to consider this cross-border opportunity. Here are four more:

 

1.     Exponential growth. Like China, Brazil has traditionally relied on its domestic economy, but that’s all changing fast. Currently the eighth-largest economy in the world, Brazil is expected to grow to be the fifth-largest in just a few decades. Even during the worst of the global meltdown in the past two years, Brazil’s domestic performance and output was still very solid. This goes to show that the country has plenty of room to expand its export market. Brazil’s leaders see what’s happening in China and in India to some degree, and they fully intend to stay on the cutting edge of international growth.

 

2.     Emerging market opportunities. Right now, most of the products Brazil exports are raw materials. So the time is right for business owners to enter the country with an entrepreneurial spirit. In early May, Brazil and the U.S. announced an innovation-focused agenda that will deepen commercial relations on five core themes, including: innovation and green technology; trade facilitation and business development; intellectual property cooperation; standards and metrology; and services and small- and medium-size enterprises. If you’re in the business of developing new products and innovations that other countries have taken for granted, Brazil could be fertile ground for you. 

 

3.     Slow-but-steady improvements. Most of the opportunity is currently in the southeast, from Rio de Janeiro to Porto Alegre. But as the different local governments start to offer tax incentives and develop infrastructure, many other parts of the country will open up. Businesses need to have a solid footprint in Brazil and go through some of the challenges that companies have already gone through in China. Whether it’s the traffic and security problems, the varied tax laws, or the housing infrastructure, you must be prepared to face these challenges with a South American mindset — where time is a more fluid concept than in the U.S.

 

4.     Collaboration potential. Entering a new foreign market can be intimidating, but you don’t have to do it alone. Many stakeholders want and need you to succeed. To navigate the cultural and logistical issues effectively, you’ll want to work with a local organization in Brazil. The U.S. Commercial Service provides market intelligence, trade counseling and “business matchmaking” to help U.S. companies get started in exporting or increasing sales to new global markets. And the FedEx country profiles provide everything you need to know about import and export restrictions, clearance information, and more.

 

I made the move to Brazil not because of the size of business now, but because of the future outlook. Expanding your business to any developing economic power comes with some challenges. But for those who do their research, take advantage of available resources and remain persistent, the payoff can be tremendous in the long run.

 

Matt Davies is the managing director of sales for the Latin America and Caribbean division at FedEx Express. He’s been with FedEx for 11 years, working in sales leadership positions in Australia, Korea, Japan, Singapore and Brazil.

 

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