16 May 2011
2.7 Practical Recommendations
First, new-to-the-market companies should prepare for the bureaucratic environment by reserving sufficient time and resources to tackle the time-consuming administrative processes. Finding a reliable trade partner in the region could definitely streamline the procedural and administrative chores. In this regard, trade fairs held in Hong Kong provide an effective platform for Hong Kong and mainland companies to make contacts with potential Brazilian trade partners.
Second, regarding the high-crime and high-violence environment, traders should remain vigilant and pay attention to local don’ts, for example, not to take unofficial taxis from the airport. New-to-the-market traders can also learn from the local practice of removing their titles from their business cards to reduce the risks of being spotted and kidnapped. Bullet-proof vehicles are also common for foreign businesspeople in Brazil.
Third, to ensure smooth customs clearance and maintain efficient logistics control, foreign exporters should employ well-established forwarders who can offer advanced shipping and tracking service and support. In light of the potential difficulties (bureaucracy and corruption) in customs clearance, engagement of efficient forwarders can help save a lot of problems and costs, especially for seasonal products.
Furthermore, since Brazil is a gigantic country, new-to-the-market firms should pay more attention to the changes in consumer preferences and product trends in Brazil so as to better suit Brazilian consumers’ appetite and taste. In location regard, São Paulo is widely considered the city “where things happen” in Brazil, to which Hong Kong companies should be more attentive.
In view of the challenging business environment in Brazil and high travelling costs, Hong Kong and mainland companies can get into contact with Brazilian buyers at trade fairs and exhibitions in Hong Kong, as an alternative to setting up a direct presence in Brazil. In fact, there are growing numbers of Brazilian buyers coming to Hong Kong fairs and exhibitions for sourcing and networking. As an illustration, the Hong Kong Trade Development Council received 2,901 Brazilian visitors at its various trade fairs in 2007, up 40% against the previous year.
For companies who would like to set up production facilities in Brazil, on the other hand, the free trade zone in Manaus, which offers generous fiscal incentives, is considered a prime destination. However, investors should note the rather inhospitable climatic environment in Manaus, i.e. equatorial humidity and heavy rainfall all year round, as well as the necessary financial and managerial resources required for doing so.