Doing Business in Latin America

Top Tips: Doing Business in Latin America

Gabriela Castro-Fontoura is Director at Sunny Sky Solutions, who support businesses at different stages of expansion into Latin America. Gabriela has worked with businesses that were already exporting to Latin America, with businesses starting to export to the region and with some just thinking about it. She has also worked with businesses with no intention at all whatsoever of exporting to this region...

Here she shares her ten top tips for doing business with Latin America – whether you are exporting or importing from this exciting and varied region.

1-      Slow down!

The first tip I would give anyone thinking about doing business with Latin America, particularly British companies used to working at a certain pace and in a certain way is – slow down. Business in Latin America is personal and takes time. It is important that you adjust your expectations, your strategy and your resources accordingly.

2-      Talk

As I say, business is personal. People will want to speak to you and serious partners will want to meet you, at least once, and sometimes often. Do not underestimate the importance of building relationships. There are ways of overcoming language barriers, it is the attitude that matters.

And forget emails, very few will answer them efficiently. Even phone c alls are often ignored. Perseverance is key...

3-      Listen

If you want to do business with Latin Amercans, take your time to listen to them, learn from them. International trade is all about win-win.  International business people working in Latin America are often very well educated and well-travelled. Do not underestimate them...

4-      Make sure you know what you are talking about

Sounds obvious, but if you are dealing with Latin America – makes sure you understand what “Latin America” is. Make sure you understand that Mexico, for example, belongs to Latin America but not to South America. That Guyana belongs to South America but not to Latin America. In other words, get a map!

Latin America is a vast and varied continent. Trying to speak to a Brazilian in Spanish will offend them. Translating your literature into mainland Spain Spanish will offend most across the continent. Just like doing business in Spain is not the same as business in Norway, doing business in Colombia is not the same as business in Uruguay. It is important that you understand the variations and focus on your market. Brazil is the size of Europe – and although one country, it can be considered as a plurality of markets.

5-      It is not just about commodities...

Very often I get the impression that British people (and therefore, British businesses), lack an understanding of the shape of the Latin American economies and how these economies actually look. In the last three months, I got asked these three questions:

-          But my (nursery/home decoration) products cost £15, can many people in Brazil afford them?

-          So do most people in Colombia work in coffee plantations?

-          We manufacture laboratory equipment, but I guess there isn’t really a market for that in Latin America?

Oh, dear... Where do I start? A quick objective response...

-          There are 300 million middle class consumers in Latin America according to UKTI. Poverty and inequality are big issues, but not everyone lives in a shanty town. The luxury industry is booming across the continent. Mexico and Brazil have a disproportional concentration of millionaires. There is purchasing power. Not from everyone and not for just anything, but to think these countries are “poor and underdeveloped” is a huge mistake.

-          Latin American economies rely heavily (too heavily, we think) on commodities. But that is not the end of the story. They have developed and are continuing developing their industry and services sector.

-          There is a market for almost anything in Latin America. Whether you can enter it or not, will depend on your product (or service), your strategy, pricing and your willingness to do business in this region. From Scottish whisky to microscopes, from organic baby food to security systems, from catering services to graphic design. The continent is growing steadily and it can’t keep up with its demand, so it needs to import.

 

6-      Be clever

Brazil allures any exporter from anywhere in the world. It regarded as “exotic” and “exciting”. It makes the headlines, it is growing and it massive. But, believe me, it is not for everyone. If you are a first-time exporter, unless you are very niche, you are unlikely to succeed in Brazil. If you are an experienced exporter, and you really, really want to go for Brazil, regard it as a target on its own in Latin America, not as a step into other countries. It can be highly profitable, but highly challenging.

How about other markets? Think laterally. Chile has a Free Trade Agreement with the EU, is very pro-British and is fairly small...

7-      Be innovative

Some Latin American countries, namely Argentina and Brazil, figure amongst the most protectionist in the world. You will be faced with high import duties, a mind-blowing bureaucracy, changing legislation and utter unpredictability. If you are serious about these markets, be innovative.

At a show a few years ago, a Portuguese clothes manufacturer was telling me he “had” to be in Brazil but they just could not get in. The country is highly protective of its industry, particularly textiles. But he knew there had to be a way in. So the business developed a long-term strategy involving partnership with other four Portuguese businesses, local manufacturing and joint ventures. He knew it would take time, probably years, but that is the only way he could see things working.

Argentina is probably the country in Latin America that will test your lateral thinking although things have changed since Macri has been in power.  Don’t expect total openness but the legendary trade berries from the Kirchner era ae definitely weakening

8-      Know what you are good at – and sell it!

Generally speaking, Latin Americans love Britain. You will find English pubs in Montevideo, Beatles fans all over the continent, Twining’s tea and Walkers Shortbread all over the region. Britain means quality. Makes the most of it. We admire the honesty and reliability that Britain inspires. In other words, as I always say, British sells, get informed about the Made in Britain marque too, it can help.

9-      Ask

Latin America is not as far away or as exotic as you think (sorry!).   There are plenty of sources of support to get you started and to accompany you in your journey.

10-   Enjoy it!

Latin Americans are warm and welcoming. If they do business with you, it is because they respect you, and they will treat you accordingly. If you visit them, they will be unbelievably hospitable and make you feel at home. Enjoy!

Article written on 6th February 2012 by Gabriela Castro – Fontoura - Associate of Strong and Herd LLP and revised June 2017

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