Find out how to develop a successful market entry strategy in Brazil for your expansion.
In a highly globalized and competitive world, one of the keys to the success of entrepreneurs is knowing how to find new market opportunities. After defining a target, it is then necessary to seek the best market entry strategy to explore and find success in this new market.
With a population of more than 200 million people, a vast business environment with metropolises housing infrastructure similar to any other major city in the world, Brazil is an ideal hub for businesses to enter Latin America. The chance of commercial success in Brazil is a key drawcard for expanding multinationals, when compared to other countries in the region.
Below, we’ve included the initial steps for you to build your commercial market entry strategy in Brazil.
Developing your market entry strategy in Brazil: seek guidance from experts
Brazil is the largest economy in Latin America, with a diverse market and a number of strong trade connections in the region that ease business’ ability to integrate and grow.
Make sure to engage with local market entry specialists to gain a competitive advantage and sound guidance on market activity. You can then develop your market entry strategy in Brazil with key contextual insights offered by your local partner.
1. Choose the ideal location to introduce your product or service
Brazil owns immense territory, being the fifth largest country in the world. Thus, Brazil has specific regional characteristics and differences. Understanding the geographic characteristics and consumer behaviour among these territories is essential when defining your operations and strategy for entering the Brazilian market.
Initially, business owners may consider establishing themselves in cities like São Paulo and Rio de Janeiro. These cities have all the facilities necessary to enter the Brazilian market and establish any type of business activity, including:
- large populations
- comprehensive transportation facilities
- a large metropolitan region
- a vast network of service providers
- diverse types of business, including business-to-business (B2B) options to support newcomers to the market.
However, there are other Brazilian regions that are known for developing certain specific types of business.
In the northern region of the country, in the city of Manaus, State of Amazonas, the Free Economic Zone of Manaus was established by the Brazilian Government in the 1960’s. This region has a large industrial pole, notably with high-tech industries and various tax incentives.
To operate in the aquaculture market, for example, it will be possible to find several opportunities in states in the Northeast (Ceara and Rio Grande do Norte), Southeast (Sao Paulo and Minas Gerais), and South (Santa Catarina).
2. Look for a development promotion agency
One of the strategies adopted by public entities to attract business to Brazil was the creation of business promotion agencies.
The state of São Paulo established the promotion agency, Investe São Paulo. This agency helps investors to set up and promote their new business, in addition to assisting in the search for funding and incentive policies.
Likewise, the states of Rio de Janeiro, Goias and Rio Grande do Sul have also instituted a business promotion and development agency as a way of attracting jobs and income to the respective states.
3. Understand and integrate cultural aspects into your strategy
Brazilian people come from a wide range of cultural backgrounds, generating a high level of social diversity. Brazilian culture has been molded by its history connecting native indians, Portuguese, African, Spanish, Italian, German, Arabian, Jewish, Japanese, Chinese, Korean, French, Dutch, and Russian influences, among others.
Brazil has an extremely diverse business environment due to this multiethnicity. Among the many characteristics of Brazilian business culture, consider the following key aspects:
- Adaptability and flexibility to any business environment
- Brazilian people tend to be good negotiators and normally do not feel a strong culture shock when dealing with foreigners
- Brazilian businesses work very well with problem solving are always looking for innovative alternatives to the situations that appear throughout their daily business routine.
Therefore, business owners and executives should know the cultural aspects of the Brazilian business environment so that it will be possible to enter the market successfully and assertively.
4. Have your local partner review your strategy
As mentioned above, it’s crucial to work with a partner who can review the entire market entry process with regard to legal, fiscal, regulatory and accounting aspects. You need contextual insights into the Brazilian market to support the market validation of your products and services.
Although Brazil is an extremely attractive destination for new businesses, it is necessary to receive full support to comply with your obligations as a commercial entity when entering the market in Brazil, and in an ongoing operational capacity.
Under the legal and regulatory point of view, executives will have to keep in mind the contractual rules applicable in Brazil, as well as the regulatory procedures for eventual registration and licensing of a product or service. In addition, from a fiscal and accounting perspective, businesses must understand and comply with all relevant taxes involved in the operation.
Seek out professionals with highly specialized knowledge and experience to guide you through your market entry process and support your commercial operations in Brazil. At this early stage of entering a new market, avoid cutting corners that could compromise your investment and put you at risk of penalty due to non-compliance.
Work with Biz Latin Hub to build your market entry strategy in Brazil
To build your commercial market entry strategy in Brazil, you’ll need a team of specialists in order to ensure you will achieve all legal, fiscal, regulatory and accounting regulations.
Get in touch with Biz Latin Hub for specialist support in market entry and validation, and commercial representation. Our team has a wealth of experience in assisting companies of all sizes to develop their operations through providing a range of customizable market entry and back-office services.
Contact a member of our team today here for support.
Learn more about our team and expert authors.