How to make Latin America your next new market
For those of you already exporting, it can tricky to know where to take your business next. Made up of 20 diverse countries and with a population of 626 million, Latin America is an ideal choice for access to new customers and new markets. It’s not, however, for the fainthearted.
Uruguayan business expert Gabriela Castro-Fontoura, founder of Sunny Sky Solutions, specialises in supporting UK firms to secure contracts across Latin America. Such is her expertise that the second edition of her ebook, a guide to the region for British SMEs, has recently been published. So we asked her to outline the seven simple steps Leeds City Region SMEs would need to take to break the Latin American market and she kindly obliged. Here’s what she said:
1. Research, research, research
Latin America is a huge continent that stretches from Mexico (in North America) down to the South of Chile and Argentina (close to the South Pole!) so researching the region, having a plan and prioritising which markets you want to tackle first is critical.
Latin America is made up of 20 countries and they all behave very differently. Brazil and Venezuela, for example, are protectionist, restricting competition from foreign firms to protect domestic ones whereas countries like Peru and Mexico are typically a lot more open to trade. And it’s important to consider the difference in their growth and GDP projections as well [Ed note: warning, we’re about to get technical]: according to the IMF Brazil is expected to experience a recession this year with negative GDP growth of -3.3% and no growth in 2017 whereas Paraguay and Peru are both expected grow by 2 and 4% respectively!
Contrariwise there are also some common elements across many of them that can be used to make sense of large areas not just in terms of geography, you may want to target the Andean region or Southern Cone for example, but also by taking advantage of existing structures such as customs unions or free trade zones.
2. Commitment is key
Securing Latin America as a new market takes time and resources. Business can and often is personal, the bureaucracy can be mind-blowing and, although the continent offers huge opportunities, you need to be prepared to put the work in.
Commit with the longevity of your market strategy too. During the recent recession in Europe, Latin America actually experienced a 10-year economic boom. This meant that they were flooded with foreign businesses desperately trying to expand into the region. Businesses in Latin America want to know that you’re in it for the long run, not just “when the cow is fat” as we say in Uruguay.
And demonstrate your commitment with visits. The more senior the visitor the better; the degree of commitment from an SME and their senior decision makers can make or break a deal.
3. Get connected
Relationships count for a lot in Latin America. People need to get to know and trust you which is another reason why business can be slow so it’s important to start building a network. Getting local support for this can be invaluable for getting things moving quickly.
4. Don’t use Google Translate
Although many Latin Americans speak English to some degree, Spanish (or Portuguese in the case of Brazil) is a must, particularly for written materials. And it’s critical at negotiation stage. Again, access support and make use of a translation service, that way you’re reducing the risk of mistranslation and problems later on but you’re also showing your commitment to Latin America and its way of life.
5. Be prepared to travel
Latin America can be costly to reach and a flight from Leeds Bradford to Sao Paulo airport can take up to 15 hours. Plan your internal flights carefully too – a flight from Mexico City to Buenos Aires can take upwards of 10 hours! Make sure you plan each trip thoroughly so that you can make best use of your time and money.
Latin America is a marvellous continent and the majority of exporters will find it a fascinating place. In a previous blog post, Richard Smith at Surfachem said that you should choose to export to a country you like and that’s certainly true! Not only is Latin America beautiful but your visit will also demonstrate trust, commitment and the promise of networking – all of the things I’ve already mentioned! It makes a lot of sense to see it for yourself.
6. Make the most of “brand Britain”
Britain is highly regarded across Latin America, which is a huge advantage for exporters.
Consider if you should make more use of your British origin in this market, by using different branding or advertising for example.
Your Britishness will ensure you won’t be short of ice-breakers, either. We have a lot more in common than you might think, from football through to music. Great for networking!
7. Enjoy it
Tackled the right way, Latin America can be a key export market for your business. Get to know it well, plan it carefully, be ready to adapt and, above all, enjoy it!
We’ve helped a number of businesses to export and access new markets. If you’re not sure where to start contact our business growth team on 0113 348 1818 or using email@example.com for support.