Date
29/11/2023

In the following article, Dr Messana talks about the opportunities in Brazil and the best sectors in which foreign investors can invest in Brazil. This in addition to explaining why it is important for investors to be informed about the country and its peculiarities.If you also want to open your branch in Brazil, see in 3 simple steps how to click here."Brazil is a country full of opportunities, isn't it? We are organizing a business trip soon and we already have an action plan to attack the market." Several times I was a speaker in Italy about Brazil. Several times I have heard this question that, unfortunately, it is common for many companies that little document themselves or are not used to internationalization or have never done business abroad. This is a problem, because these entrepreneurs or executives arrive in Brazil with a poorly planned trip and, even trying a product or a good technology or a good brand, find a difficult country from the point of view of the business. And those who venture into thinking they know more than Brazilians because they come from the "first world", can be sure that they have a high chance of losing money.In this brief article, I will comment on the opportunities in Brazil and the most interesting sectors to invest. First of all, it is necessary to warn the Italian compatriots about the importance of not getting here uninformed. There are many business guides and institutional websites providing a lot of information about the country. The Italian Embassy, for example, published a guide with more than 200 pages in the Italian language – where I was able to make my contribution- to investors in Brazil. It is necessary to understand the context before travelling to Brazil. Participating in the fairs is a great opportunity to meet competitors and players from a specific sector. So, matching a trip to a trade show can be a great idea. São Paulo is the centre of business in Brazil, but there are other cities growing much from an economic point of view. But going back to the subject of the information, it's important to document yourself well. There is no shortage of tools to make the trip productive and not only tourist. Because, São Paulo, for example, is not exactly a tourist city.Currently, we represent and manage the interests of several Italian companies in Brazil. Many of them have as partners private equity in Italy or are listed on the Italian stock exchange, and began activities here by buying a Brazilian company. Others started with greenfield operations, and we played the startup at 360 degrees. We have an information stage at home. What are the best sectors?The decoration sector is very appealing. The Home Furniture market is now worth $22 billion, and according to studies. In 2016 it will be worth $32 billion an annual growth of 8%. Investigating the industry is not complete. In São Paulo there are two focuses: The D&D mall and the Gabriel Monteiro da Silva mall and the region. The strategy is to learn in advance about indirect taxes and imports on furniture or decorative objects, how to recover part of this cost with a Brazilian subsidiary or a Brazilian partner, stay tuned to the positioning and quality of competitors and evaluate how to offer after-sales service.The luxury market has a class A selected and willing to spend well. We are talking about half a million customers who can buy luxury goods. There are cases and cases. Here in Brazil, you can only buy a car. You can't put it in the trunk. But a bag or a skirt you can buy at a designer store in São Paulo or travel to Miami or Italy and buy there, enjoying the trip and spending less on shopping. Therefore, the trend of luxury brands that are documented, and come to understand Brazil is to study how well to manage the operation and offer an expensive product, but that is still worth buying in Brazil. A good share is worth buying in Brazil. A good part of class A is well informed. Therefore, in addition to the price factor, the product must be exclusive. Profit margins are usually very high. Louis Vuitton has long guided the strategy of offering the same price in all stores around the world and, last year, Brazilian buyers entered the group of top 10 in terms of purchase volume.Events and Fairs, this is a very dynamic market, and I ended up getting to know more, having received the role of Country Manager of the Milano Fair in Brazil. It is a market where acquisitions are focusing in the hands of a few big players, and the prices paid are very high in terms of multiple EBITDA. Those who have the competence and operate in the MICE Market (Meeting-Incentive-Conferences-Events), can be sure that if you join three or four good events, absorb smaller companies, you are going to be targeted by large groups of international operators.The information technology sector is where many Italian companies are doing good business. In the active mobile market, there is still a lot to be developed. Also, within the scope of ERP systems (integrated business management systems), there are opportunities. The food&beverage sector is complexus but pleasing, for sure. I had the opportunity to participate in the startup of the company BaciodiLatte. A seemingly simple initiative and was based on the intuition of friends Edoardo Tonolli and Nick Johnston: Lacked a good handmade gelato in São Paulo and after dinner, it was not the habit of São Paulo go out for good ice cream. The initiative was a success today there are four stores in São Paulo and an ambitious growth program maintaining initial quality. Another opportunity to develop is the Wine Bar, harmonizing wines with different snacks typically Italian. I also think of mozzarella bar, Peck Milano style shop or handmade fresh pasta shop. Everything also has a good market for those who know how to handle these products well. Of course, you need to be careful before investing, knowing how to manage opportunities by surrounding yourself with good consultants or reliable local partners.I remember an invitation I received recently and to give a lecture in Brazil. It came from Big Four on the occasion of an Italian mission. The title that they proposed to me was very funny. I accepted: "Brazil, ten other rules not to slip in banana houses".Graziano Messana. Economist and managing director of GM Venture, a business consulting firm. He has experience in startup, M&A processes (mergers and acquisitions), and general management, acting as a strategic partner of foreign companies interested in investing in Brazil.