Brazil Is a Good Bet for Global Brand Expansion

Category: International Business

Susan Maria Howard joined Acclaro in 2012 as our in-house Brazilian Portuguese Language Lead. Susan is certified by the American Translators Association and the California Courts, and has worked with major Silicon Valley companies such as Google, Cisco, IBM, Apple, LinkedIn, and Sony.

Brazil’s brighter future begins with global sports. Hosting both the 2014 World Cup and 2016 Olympics, these sporting events alone are projected to push $131 Billion into Brazil’s economy. The great promise of these international events is the infrastructure improvements expected in advance of the crowds. The lasting benefits will impact the citizens of Brazil for decades to come. In conjunction with these improvements, the government has gone all out with a $66 Billion stimulus plan with significant provisions for foreign investment and tax breaks for businesses. While there have been concerns over inflation and the strength of the Brazilian currency, the real, many economists remain optimistic that Brazil has escaped cycles of boom and bust in favor of steady (if somewhat slower) growth.

Another strong driver behind the business case for expanding your business in Brazil resides with the confluence of technological advances (broadband penetration, mobile device usage) and the exploding middle class. Within the last three years, over 45 million Brazilians have moved into the middle class. According to Forbes magazine, only 40% of Brazilians are regularly connected to the internet, but those connected already spend an estimated $13 Billion annually. With this rise has come vast consumption of consumer products and a considerable appetite for new brands.

Many international brands have identified a significant growth sector in the Brazilian economy: Franchise expansion. Young entrepreneurs in Brazil have turned to the franchise model to start their own businesses while mitigating their exposure to risk, and brands with a franchise model built into their business have ample opportunities to grow in Brazil. With 2,031 brands already operating in Brazil, an additional 10% are expected to open their doors for business this year. Currently, 11% of Brazil’s franchises are foreign-based companies.

Perhaps the most significant challenge for international businesses is navigating the tax and legal requirements for operating in Brazil. While there are considerable online resources, such as the Brazilian magazine Exame and Empreendemia, with a Twitter and Facebook network designed to facilitate business in Brazil (both in Portuguese), your best bet is to partner with a translation services company familiar with Brazil’s unique challenges.

Photo attribution: Diego3336