What you need to know about expanding your business into Brazil

February 22, 2017

For most entrepreneurs, building and maintaining a local customer base is one of the first steps on the road to success. Once they have achieved this goal, some business owners feel they're ready to take on the next step: expanding internationally. To successfully convert your business from domestic to international, you'll need to consider a new set of factors that might not necessarily affect a local-only company.

Once you have done your research and determined that Brazil is your next destination there are some key factors to keep in mind as the expansion model used in other countries will most likely not work in Brazil.  When it comes to expansion Managing Partner of Result Venture Knowledge International Strategy ABRoberto Thiele is an expert. Read part one of our interview here

 

When preparing to expand to Brazil what are the misconceptions people have?

Most international entrepreneurs are getting better and better in the last years when expanding into Brazilian markets. After the start of the 2008 crisis in the US and European markets, entrepreneurs saw in Brazil a good spot to get bigger without burning lots of their funding. Mostly because sometimes there was smaller competition in Brazil despite being a large market. Criteo is a good example of that.
If I have to mention the most frequent misconception in that int´l expansion process, I would say that is the expectation some people have that things in Brazil would be very similar to things in other markets, like their home markets. Very often things in Brazil have a peculiar way of being and happening. Like Schibsted´s BomNegocio.com business that ended up merging with their largest global competitor, Naspers. Before entering in Brazil these two global giants in the online classified business use to compete head to head. After competing for almost 4 years in Brazil, both companies burning lots of cash with expensive TV campaigns to build their brands – an area dominated by TV Globo – they decided to merge, save with media, and jointly compete with Mercado Livre and other players consolidating OLX as their brand into the region. 

 

What are the biggest challenges people face when expanding into Brazil? How can they be overcome?

In my opinion the biggest challenge in those int´l expansions is the longer sales cycle; things usually take in Brazil, a place where most corporate decision makers are still conservative on trying out new things and ideas. Probably because of the higher local capital cost and pain originated from mistakes. It is important to mention that the “virtual oligopoly” in some large markets such as consumer banking, energy and traditional media also allows those large enterprises to delay the adoption of innovative and disruptive technologies, increasing the “take off duration” when expanding into Brazil.

 

When a company is considering a Brazil expansion what are the key items that they need to address? How does Result help them through this process?

Allocating a small budget to jointly work with us building a Go To Market Execution Plan is important. That takes no more than 60 days and creates lots of value, serving as a control panel while expanding into Brazil. It is something jointly done between local market experts and their senior executives. And later we can help or not to get things done executing the plan with the usual on site adjustments.

Can you share a success case of a Brazil expansion?

IgnitionOne is a case of success when expanding into Brazil. Originally, in 2011, they were thinking on having 2 sales oriented professionals in Sao Paulo and no legal entity. Today their local office has more than 20 experienced professionals serving dozens of mid to large enterprises.

Schibsted On Line Classified is another success case, where BomNegocio.com and now OLX is their largest international investment, and probably their most valuable asset. Their Brazilian employees are leading relevant innovations to their global business, in several other markets. For a company with more than 160 years in business, that is a great success. 

What type of services does Result provide that enhance lead generation?

There are a few types of those services, from the traditional “manual” lead generation type of work to some on line automated process that does that. Related to the later, we use our affiliated company Digital Result to resell and support international top technology services that mostly work based on consumers on line behavior and profiles to generate those leads.  Digital Result is a sister company to Result Brasil focused on digital and mobile marketing services. We help marketeers of corporations or agencies that look for higher performance in their on line and mobile activities. We have great experience and solutions with: (i) on site content optimization with conversion increase, (ii) lead generation, (iii) email marketing optimization, (iv) profiling and CRM integration, (v) smart retargeting, (vi) mobile marketing and applications development, (vii) content production to traffic generation out of natural search, (viii) attribution modeling and a bit more.

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