CNP Expo: Want to Sell in Brazil? ‘Fasten Your Seatbelt’

May 21, 2013

Moderator Don Bush, vice president of marketing for Kount, kicked off a Tuesday afternoon session of the 2013 CNP Expo titled “Breaking Into Brazil (and Other Cool Places)” by highlighting the need to “do your homework before going international. If you have a good plan, going international can really rejuvenate your business.” He cited a recent Wall Street Journal article that more than 70 percent of CEOs believe their growth in the next ten years will come from expanding to international markets.

Ralf Germer, CEO of PagBrasil, explained that although Brazil is “a very restricted market,” both in terms of shipping merchandise in and getting payments out, it is the fifth-largest e-commerce economy in the world—and it’s still growing. So it is worth the effort to reach this market of 200 million people, many of whom have a great deal of wealth and prefer to shop online or abroad due to the high cost of local goods. As Jay Diamonon, senior vice president of Adyen Global Payments Services, put it: “Expanding into Brazil is worthwhile, but fasten your seatbelts.”

The panelists summarized the sequence of events needed to break into Brazil: First, test your product abroad in a less restrictive market to see if it takes. Second, find a partner to help with the massive amount of legwork needed to enter the market. Finally, open a local subsidiary within Brazil, because, as Bush put it, “Brazil is a market where, if you’re not present, you’re not there.”

ModusLink’s André Malinowski noted that one of the biggest hurdles for companies trying to break into Brazil is payment method: Brazilian credit cards, for the most part, work only in Brazil. Even credit cards like AmEx and Visa cannot be used abroad or online. Because of this, Malinowski explained, “seventy percent of online payments in Brazil are done through a push payment system, rather than via credit card, so if you’re not offering this payment method, your company won’t succeed.”

Another major hurdle to setting up in Brazil is the country’s complex system of taxes and tariffs. For this reason, the panelists strongly suggested teaming up with a partner that is more familiar with navigating the bureaucracy.