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“Why Do Many Companies Fail When Entering the Brazilian Market?”

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Have you ever wondered why giants like Sony, Nike, Fnac, Nikon, and Ford packed their bags and left Brazil in the past three years? It boils down to a very particular reason that might catch you off guard: Custo Brasil!

Despite Brazil’s reputation for warmth and a laid-back atmosphere, our regulatory environment is on another level of complexity. For many business models, bringing a local partner aboard isn’t just beneficial; it’s crucial for navigating this labyrinth.

Brazil is well ahead in banking penetration, but don’t let that fool you. Cash equivalent payments, notably PIX, still reign supreme here. And about PIX, it’s become a staple, yet astonishingly, numerous e-commerce platforms haven’t embraced it as a payment method.

As for the Brazilian Real (BRL), its volatility could rival that of a dramatic telenovela, making transactions and financial planning a rollercoaster. Employing hedging strategies and meticulous financial management is vital for weathering this storm.

Then there’s inflation. Though not as daunting as in the past, it’s still a significant player, influencing pricing strategies and overall competitiveness.

Brazilians’ penchant for installment payments is something to behold. Yes, we like to spread the cost, even for minor purchases. Without offering such flexible payment options, businesses may find themselves at a disadvantage.

The language barrier is HUGE. A sizable portion of the population doesn’t speak English fluently. And remember, we’re talking Brazilian Portuguese here, not its European cousin. The difference is more than just regional dialects.

Adapting your services to align with local customs, language, and consumer tastes is key. A generic approach won’t make the cut in this vibrant market.

And we can’t ignore social inequality. It significantly impacts banking and internet access across various groups. Offering solutions that resonate with a broad audience can unlock greater market potential.

In essence, diving into the Brazilian market is akin to learning to dance samba—challenging yet rewarding. Establishing a local presence, whether through a team or partnerships, and getting a grip on our unique mix of regulatory, economic, technological, and cultural elements, is your ticket to success. Collaborations with local banks, fintechs, and regulatory agencies are not just beneficial; they’re imperative for a smooth ride.

It’s not merely about entering the Brazilian market; it’s about immersing yourself in it, embracing its peculiarities, and flourishing. With the right strategy, Brazil can be as welcoming a home for your business as it is for its people. Just remember to include PIX as a payment method!

Alexandre Pereira
Driving Payment Success with Banks, Acquirers and Card Schemes 🏦💳 | Payments Strategy ♜💡 | Global Cross-Border Payments Expert 🌎 | Payment Partnerships 🤝 | Payment Consulting 📋🎯


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