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3.7 Practical Recommendations

In general, Chilean businesspeople are shy until they develop a degree of confidence and get to know their business partners better. They prefer to have direct contact with their business counterparts and avoid middlemen. They become more prudent and conservative when it comes to decision-making and business deals are usually agreed and concluded in a formal environment. As indicated by many importers and retailers in Chile, companies planning to sell goods to Chile are recommended to appoint a local sales agent or representative or to associate with a local company. New-to-the-market companies can find reliable agents through various Chilean chambers of commerce. Most referred include the Federation of Chilean Industry (SOFOFA).

Given the low level of corruption, there is no need to offer incentives or inducements of any kind, yet it is advisable to include arbitration clauses in business contracts. To better prevent any irregularities, companies can check the commercial performance of their trade partners through, for example, Databusiness Services provided by Santiago Chamber of Commerce (CSS) before closing their business deals with Chilean counterparts.

To enhance the chance of success, companies planning to tap the Chilean market must take the purchasing power of Chilean consumers into account and penetrate the market with goods of high quality/price ratios. Besides, exporters are advised to place their emphasis on practicality and note that fancy designs may not sell well in the Chilean market for the time being (though the demand for luxury consumption is trending up as reported in some market surveys), unless enormous and continuous promotion campaigns are planned to arouse public sentiment. On the other hand, offering products with higher quality/price ratios and providing better services such as accepting small orders or short delivery time not only help exporters to differentiate their products from indigenous mainland supplies, but also cope with the intensifying competition with highly price-competitive indigenous mainland suppliers.

In order to mitigate the annoyance caused by long flights and exorbitant travel costs, exporters, instead of establishing a direct presence in Chile, should consider the alternative of using Hong Kong trade fairs and exhibitions as a platform to meet Chilean businesspeople. This can further help traders avoid the language barriers that they will find difficult to overcome in Chile. As an illustration, Hong Kong Trade Development Council received 898 Chilean visitors at its various trade fairs in 2007, demonstrating a CAGR of 24% over the past five years.

In addition, exporters can make use of the online database maintained by Chile’s Export Promotion Bureau (ProChile) to find contact numbers and addresses of Chilean importers (classified by products) to introduce their products to potential buyers through direct mail as the first step towards longer-term business relationships.

Content provided by Hong Kong Trade Development Council
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