Brazil is the farthest geographically from China among the "BRICS countries", but now it is getting closer and closer to China - in 2013, Brazil was China's largest trading partner in Latin America, and China is Brazil's largest trading partner. The author went to Brazil to participate in exhibitions many times, visited local markets, and gained valuable Brazilian business information, and shared it with you.
Brazil's "three slow and three fast"
Live in Brazil, there are "three slow and three fast".
Three slowness refers to romance, slow pace of life, and slow work efficiency.
Brazilians are very romantic in life, and they like jumping and colorful colors. Just look at the theme song MV of "Rio Adventure" and this World Cup.
is a major criticism of Brazilians. I made an appointment to meet at 9 a.m. It is possible that Brazilian buyers have not yet appeared at 10 a.m. It is common for Brazilians to temporarily adjust the meeting time and even cancel the meeting, and it is very likely that you will be notified temporarily 5-10 minutes before the meeting begins, "Sorry, I can't attend today's meeting" or "Today's meeting was cancelled", which is really crazy. If you are waiting for a reply email from a Brazilian customer and have been waiting for more than a month, when you feel hope is slim and decide to give up waiting, you may receive a reply from a Brazilian customer in the next second. Brazilians don’t like others to urge them when doing things, and they will not reply to you until they make a good choice. It is also possible that he happened to be on vacation at this time, so wait for him to come back after the holiday. Brazilians will not check their emails from time to time when they are on vacation like hardworking Chinese.
Therefore, when contacting Brazilian businessmen, you must be patient and it is best to confirm with them how to follow up to make them most comfortable.
"three fasts" means driving fast, playing football fast, and spending money fast.
When driving, the driver only recognizes lights but not people, so it is risking his life to cross the road here.
"Fast kick" is well known to everyone, so I won't repeat it.
"Spend money quickly" is related to the popularity of credit cards in Brazil. The Brazilian government encourages the people to use credit cards to consume. Banks do not charge card fees from users, but also advocate installment payments. It is generally divided into 10 periods, 1,000 baht coins. One period only requires payment of 100 baht coins. Therefore, merchants simply price 100 x 10 on the price tag to stimulate people's desire to consume. Therefore, Chinese students and businessmen who study and work in Brazil have told the author that "the money of Brazilian people is easy to make."
Brazilians' consumption habit of "installment payment" has also affected their foreign trade. After doing several business with Chinese manufacturers, Brazilian merchants often make demands on credit sales to alleviate their financial pressure, but less than 20% of Chinese companies are willing to provide Brazilian merchants with credit sales. For this reason, many Chinese small and medium-sized enterprises have lost the opportunity to continue to expand their trade share with Brazilian merchants, and some have even been forced to be eliminated.
Industry business opportunities are great dialysis
1, power equipment imports grow rapidly
Brazil is a resource country, and the Amazon rainforest provides it with rich forest mineral resources. But she is also a country with weak infrastructure and lack of light industrial products. Improving infrastructure construction and maintaining stable economic growth have been Brazil's top priority in the past decade.
In recent years, Brazil's imports of power equipment such as engines, generators and transformers have maintained rapid growth. According to the 10-year plan of the Brazilian Ministry of Energy and Minerals, the Brazilian power development investment plan from 2006 to 2015 will have an additional investment of 12.5 billion Bacoin (US$6.25 billion) each year, and the total installed capacity is expected to reach 185GW by 2020.
In 2012, electricity and electronic products imported from China accounted for 36.8% of Brazil's total imports of this type of product, reaching US$1.52 billion. A large number of power infrastructure projects have been invited to bid for Chinese companies. If Chinese companies want to bid, they should join a bidding consortium with civil engineering, equipment and financing, take financing as the lead, and combine it with the China Development Bank and the Export-Import Bank of China to conduct export equipment financing, so as to obtain project orders.
As an important participant in the Brazilian market, China's high-end power equipment company Siyuan Electric has fully participated in the construction of multiple World Cup-related projects, strongly supporting the smooth progress of this globally sporting event, providing safe, reliable and efficient power equipment and services for this cup. This move not only broke the strong monopoly of Western power equipment giants, but also established a good market reputation in the Latin American market, and also brought a demonstration effect to Chinese private power companies entering the international market. Ultra-high voltage equipment has become the "golden business card" of my country's equipment manufacturing industry.
2. Photovoltaic companies can receive government subsidies
In view of the 2014 Brazil World Cup and the 2016 Brazil Olympics, Brazil and the entire Central and South America solar photovoltaic market is quietly rising. As one of the "BRICs" with the best sunshine conditions (BRICs: Brazil, Russia, India, China), the Brazilian photovoltaic market has the potential to reach the level of India and China. In addition, there are signs that the Brazilian government will enact legislation conducive to market development, allowing large-scale solar installation systems to be connected to the grid starting from the end of this year. The "2014 Global Market Outlook" released by the European Photovoltaic Industry Association pointed out that the Brazilian photovoltaic market has huge development potential.
In addition, the government encourages private capital to enter the market. Preferential policies have been introduced to provide subsidies to enterprises that produce photovoltaic power in small areas. Currently, 18 enterprises have received subsidies. If Chinese photovoltaic companies want to enter Brazil's photovoltaic industry, the best way is to establish a joint venture with local companies.
Yingli Green Energy is the world's largest photovoltaic company. It ranked first in the world in shipments for two consecutive years in 2012 and 2013. It is a representative enterprise in my country's photovoltaic industry. This is the second time the company has sponsored the World Cup football match and is also the only Chinese sponsor. Yingli has provided 27 photovoltaic systems for the lighting information towers of all cities in this World Cup competition, and has set up 8 to 15 solar charging stations in media centers and international media bases in six stadiums including Sao Paulo; at the same time, Yingli has also installed solar photovoltaic modules for the New Maracana Stadium and the Pernambuco Athletic Stadium, which can reduce emissions by 2,560 tons per year.
3, Brazil's "Yiwu City" - 25th block
Brazilians living in Sao Paulo, everyone knows the 25th block, which is a copy of Yiwu, China.
In addition to infrastructure, Brazil's self-sustaining light industrial consumer goods are very scarce and mainly rely on imports. Small appliances and small commodities from China have a very good market in Brazil. Many Brazilian merchants came to Yiwu to purchase and then sold in the 25th block. Here, you can also see many Wenzhou people reselling sneakers, mobile phones, mp3s, and watches. Because the price is cheap, the people can afford it.
In contrast, some mid-to-high-end home appliances, such as electric heaters, coffee machines, and roasters, are monopolized by 5 or 6 large importers in Brazil, and it is difficult for foreign-invested enterprises to enter the market with their own brands. Most of them provide services to Brazilian local brands in the form of OEM processing.
4. Textile industry "rejects" Chinese supplier
Textile industry is one of Brazil's traditional industries, and Brazil's industrialization also began in the textile industry. Brazil and China are both developing countries, and the textile industry plays an important role in the industrial structure of both countries. Brazil's textile industry is divided into raw materials industry, textile industry and finished products industry. In these three parts, finished product processing (garment and other finished products) are the main body of the industry, whether it is the total number of enterprises engaged in processing, the number of employees or the output value.
According to customs statistics, from January to November 2012, my country exported US$1.228 billion in fabrics to Brazil, accounting for 37% of my country's exports to Brazil; exported US$1.317 billion in clothing, an increase of 17.09% compared with the previous year.
In order to reduce the strong competition for textiles produced in mainland China, the organizer of the 2012 Brazil International Home Textile Exhibition refused Chinese exhibitors to participate in the exhibition. Chinese exhibitors had to switch to the home furnishings exhibition. Their professionalism and exhibition effect can be imagined.Lin Yunfeng, vice president of the Textile Industry Branch of the my country Council for the Promotion of International Trade, pointed out: "In the process of expanding emerging markets, we must pay special attention to respecting the characteristics of the local industrial structure, fully explore complementary advantages and seek win-win results, seek a harmonious international cooperation, and avoid the large scale of our country's textile and garment industry bringing homogeneous competition to the other party's industries. Because Brazil's clothing industry is relatively mature, while intermediate products such as fabrics are relatively weak. In response to this feature, the Brazil Exhibition has strengthened the professional configuration of exhibits, focusing on intermediate products such as fabrics and related industries. On the one hand, After rapid development in recent years, my country's fabric industry needs to have a new breakthrough in export markets. This positioning is beneficial to the interests of my country's industry. On the other hand, highlighting the positioning of fabrics also provides Brazil's clothing industry with complete and rich industrial supporting procurement options, which is beneficial to the interests of Brazil's clothing industry. Through this complementary cooperation, local industries can benefit from it, promote and adapt to the development of Brazil's local industrial economy, and achieve win-win results for the industries of the two countries. "
Goods pass the "close" challenge
Mr. Nei Sadayuki Hocoya is a local trader Michael met during his exhibition in Brazil. He has been dealing with Chinese small and medium-sized enterprises for many years and has unique insights into Chinese companies' development of Brazil and even South American markets.
He said that the product image of "Made in China" has been increasingly valued by the local market in recent years, because more and more Chinese products are improving their cost-effectiveness. The market found that Chinese products are not expensive, but their quality is better than before. However, although a large number of Chinese manufacturers have come to Brazil to participate in the exhibition in recent years, and the number is beyond his imagination, the exhibition effect may not be very good. There are very few manufacturers who can truly reach cooperation with local terminal retail companies.
There are many reasons in this. The main reason is that local channel dealers control brands and channel resources. If foreign brands want to gain a foothold in the market, they need to pass multiple levels such as language, logistics, and channels.
According to Michael, the work efficiency of Brazil's customs logistics system is indeed slow, and the phenomenon of "delayed" in customs clearance of goods occurs from time to time, which is related to its unique import customs clearance system. Specifically, there are two main points: First, Brazil needs to obtain an official license for the import of most products, which means that importers need to obtain an import license before customs clearance; Second, the Brazilian government imposes high taxes on imported products. Taking Particle board as an example, the basis of customs taxation is the CIF price, and the tax rates are shown in the table below. In this way, all taxes and fees are added together and are close to 50%. Generally speaking, multiplying the FOB price of goods by 1.8 to 2 is the price of goods in the Brazilian market.
IMPORT DUTY + TAXES
However, there are also workarounds for the calculation of taxes and fees. The Brazilian government allows importers to negotiate with customs agents on customs storage fees and agency fees. In this way, cooperating with local traders, or finding agents to explore the market and handle logistics customs clearance in the local area, will become a shortcut for foreign companies to compete for the Brazilian market.
In addition, it should be noted that since 2010, the social security situation in Sao Paulo and Rio de Janeiro has gradually become worrying, and thefts targeting foreign tourists, especially Asian tourists with yellow skin, are very rampant. Whether in the bustling city center or remote exhibition halls, there are endless incidents of robbery of items. Even the old Chinese who have lived in the local area for decades have been robbed at home.
For exhibitors and tourists who stay in Brazil for a short time, try not to travel alone. If you go out, please lock your passport and entry card in the hotel safe. Local police will not ask tourists to show their passports on the street. In the exhibition hall, please be sure to keep an eye on your personal belongings. Since there is no surveillance in the hall, theft has been successful many times.
[Tips] The author works in the marketing department of Focus Import and Export Services Co., Ltd. Its company mainly provides enterprises with outsourcing services for import and export process, including one-stop services such as customs clearance logistics, foreign exchange settlement and tax refunds, and trade financing. Please follow the author's WeChat official account: Focus Import and Export
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