[OSL]

With the rise of Brazil's middle class and corresponding transition to a consumer economy that is web-savvy, there exist more opportunities than I once imagined. I used to view Brazil as a typical commodities-oriented export economy dominated by large state players, with little opportunity for a foreign hustler to make his way.

However, with a population of around 200 million (that is young and growing) and a highly diverse and robust consumer market, this is a place I can no longer write off.

I met a current Wharton MBA at a conference who has successfully launched and sold various e-commerce sites related to sports and logistics for the US market. He is an American who grew up in Argentina and Brazil and is now getting into e-commerce for the market of babies, specifically daipers, targeting the rising middle class. By targeting a market that has a growing and young population that is increasingly using the web, he's hitting all the right macro trends.

I wrote off Brazil as a place I'd probably never end up going because of the time I'd invested in China. My company and suite of products (in creation) will allow us to license and then enter the Brazilian market, where the products will be in demand by a range of industrial players.


Does anyone have any experience doing business in Brazil, particularly in area of e-commerce?

Example of poor feedback - "I love Brazil. You should check out Ipanema! The clubs are great there."

Example of good feedback - "In 2002 I started an import-export business in which I exported light industrial equipment from the US to Brazilian manufacturers of airplanes, our client was a subcontractor of Embraer. We reached profitability in 3 years and are doing great, although experiencing strong competition from domestic players. I would suggest you look carefully at (tariff 1, 2) and (tax laws 1, 2 regarding foreigners). I also have to tell you this about Brazilian business culture (comment on Brazilian business culture)."



Thank you in advance.


Other emerging markets we will enter after securing the US/UK markets:

-China
-Korea
-SE Asia - Singapore, HK, Indonesia, Philippines

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[Saladin]

Thanks for bring Brazil to my attention.

I'm guessing the competition for Internet Marketing in Brazil isn't that high. Seems like a great niche to get into for a Portuguese speaking person. Most people in IM are focused on the US english speaking market while there are huge swathes of other markets where you can make good amounts of cash with far less effort.

Anybody know what percentage of Brazilians speak English?

[OSL]

Nah, I wouldn't count on Brazilians speaking English.

A couple people here have messaged me about this topic.

Pepini, you have any reflections on this?

[November]

(11-17-2011 01:54 AM)torontokid Wrote:  

I'm guessing the competition for Internet Marketing in Brazil isn't that high. Seems like a great niche to get into for a Portuguese speaking person. Most people in IM are focused on the US english speaking market while there are huge swathes of other markets where you can make good amounts of cash with far less effort.

Exactly.

Internet marketing in any emerging markets is a great idea right now. It's super saturated in the US, Canada and Europe right now and is essentially untapped in countries like Brazil.

[Sardino]

(11-16-2011 11:27 PM)youngmobileglobal Wrote:  

Does anyone have any experience doing business in Brazil, particularly in area of e-commerce?

My brother exports wine to Brazil and imports stones to the US. I don't know much about his operation other than it would have been beyond possible for him to get started without his Brazilian business partner. You can't open up a bank account in Brazil without a permanent visa.

As someone who is currently in Brazil right now, what advice would you give to get my foot in the door in the Brazilian E-commerce industry. My first thought is to go to Brazilian business owners to put their inventory online, run advertising campaigns, manage online orders and take a commission for every sale.

(11-17-2011 01:54 AM)torontokid Wrote:  

Thanks for bring Brazil to my attention.

I'm guessing the competition for Internet Marketing in Brazil isn't that high. Seems like a great niche to get into for a Portuguese speaking person. Most people in IM are focused on the US english speaking market while there are huge swathes of other markets where you can make good amounts of cash with far less effort.

Anybody know what percentage of Brazilians speak English?

I haven't been able to find any numbers on this, but anecdotally I can tell you that in a city like Belo Horizonte English knowledge is very uncommon for most of the population.

[OSL]

Thanks Sardino. With a Spanish/French background, I think Portuguese would definitely be doable.

I understand that Brazil is like China in that the politicans understand what foreigners have to gain by being present in the Brazilian market and thus erect barriers/tariffs to free trade and business - ultimately, it's still worth it for a lot of people.

http://venturebeat.com/2011/11/17/brazil...n-by-2014/

Here is one of BBC's documentaries, called "Adventure Capitalist." In this episiode, differnt groups of businesspeople try to break into Brazil's market:

http://www.youtube.com/watch?v=a8iHhYlJ6Xw

[pitt]

Yes internet market in Brazil is still not as big as some other countries. However you need to think about the percentage of people in Brazil that have access to the internet. Brazil is not only Rio and Sao Paulo,you will be surprised on the number of people that dont know how to use the internet and you need to think about this depending on the product that you are marketing (Think about the number of baby mothers that will use the internet to buy diapers). I dont know how the postal service is at the moment but i remember years ago when i used to send goods to Brazil, they used to go missing on regular basis, these young guys that used to work at the post office, used to steal stuff all the time (research about the reliability of postal services at this moment)

Anyway..i definetely liked the idea of your friend, i just didnt get how he is going to sell these products in Brazil. Is your friend the one manufacturing those baby diapers or is he just the middle guy in this?

[OSL]

Pitt - I'm pretty sure he's the middle man. E-commerce platforms are usually, by definition, middle man operations.

What I am getting into is not B2C (business to consumer) but rather B2B (business to business) so it is not really necessary that I reach the entire Brazilian market. Rather, we will be dealing one-on-one with environmental health and safety managers out of our own networks.

Very different. We also are not dealing with physical products, which helps immensely as there will not be gigantic trade barriers and tariffs in our way.

[Locksmith]

YMG, I believe you are right in your assumption that there may be solid opportunities here.

I wish I could help you more but I'm into low-tech and old economy.

Anyway, here are a few insights that could be, hopefully, helpful for you:

- in terms of demographics, your big consumer market (B2C) is likely to be the urban "C Class". They comprise alone 51% of the total market and they are the single biggest category of buyers in the country right now. These guys are the new middle class, to which some 30 million people were added in the last decade (they earn, if I remember well, something between 1800 and 4000 Real a month, roughly speaking). What makes them special, I guess, is that they are very sensitive to acquiring new social status through purchasing goods and services. Although they usually don't speak foreign languages, I understand most of them are connected to the internet. Even in the biggest slums you'd be amazed to see how many people are aware of internet services and connected to the web. If you plan to sell expensive produtcs they might feel attracted to, that shouldn't be a problem either if you have a system for payment in installments (really huge here).

- Bureaucracy and Red tape are big monsters. Not because you're a foreigner, not because your product is different, not because there is a certain policy to limit new companies from coming. It's a fact of life in Brazil and unfortunately it applies to everybody. Just to give you an idea, I've spent already 30 months trying to register the sale of an apartment and I'm still not there (this should have been a rather simple transaction). Because of this, like some of other people have pointed out here, I'd suggest you get a local partner who has some experience in dealing with bureaucratic requirements. Or, alternatively, you'd have to spend some time in the country to start to figure out how the complex "machinery" works. For a business to be required to produce 35 different types of permits, licenses and official approvals is not uncommon here unfortunately.

- As I said, I don't know much about this specific market but I could perceive a great increase in the number of companies dedicated to e-commerce. Virtually all great retailers are already selling online and plenty of services can be purchased through the internet too. I met some guys, for instance, who made a small fortune selling sports articles solely through internet. These guys are independent players and this kind of initiative is growing strongly.

This is to say that the Brazilian e-market is arguably not "that virgin" anymore. There should still be plenty of opportunities out there but that will probably imply you'll need to find yourself a profitable niche. You mention environmental health and safety, I suspect there might be already something going on in this field, so it's important you check the local market closely even if only to point out your unique selling proposition as opposed to whatever that might be already going on in this field.

Well, I wished I could have helped you more but these are my 2 cents here.

[OSL]

+1

Thank you locksmith, that was very helpful.

[Pilgrim37]

Visas and red tape will be your Biggest problem.

Maybe set up e-commerce site targeting Brazil,based from the US, selling something you know Brazilians want ,avoiding all the pitfalls and not needing any partners or permits etc.

[Sardino]

I went and spoke to an immigration lawyer about permanent residency and forming a business in Brazil.

Permanent residency can be achieved through an investor program where you invest R$600,000 into a Brazilian company. You can't form a company until you have permanent residency, so you need a Brazilian partner to form it and name you at least 75% shareholder to have a controlling stake in the business.
If you don't have R$600,000 you can invest only R$150,000 but you also need to employ at least 10 Brazilians. In any business you run in Brazil your company will have to be made up of at least 2/3 Brazilians.

[Vacancier Permanent]

sardino,
thanks for posting an update on the requirements for the B visa in Brasil. A few years ago, they were really low ($50K invested in a brasilian company or in a new company, employing 5 brasilians full time) and now they are talking about 10 local employees and 600k? Did anyone say greed to the fat cats in Itamaraty?

At this time, unless one has massive ressources (think millions) and the right connections, the best way to target and profit from the brasilian booming economy and market is online with a company based outside of brasil in order to avoid any contact whatsoever with the sicking and maddeningly corrupt Brasilian government.