As the sixth largest economy in the world and a “BRICS” country, Brazil has experienced rapid economic development in recent years and its national consumption level has continued to increase. In the eyes of many investors and traders, this “football kingdom” that breeds hope and opportunities has long been known as a “hot land.” As far as the textile and apparel industry is concerned, the population of 200 million and the rapid rise of the middle class have made it a bridgehead for export companies to compete for after traditional markets such as Europe, the United States, and Japan.
However, while Brazil, located in the southern hemisphere, is showing its market charm, the “uniqueness” of consumption characteristics and business habits has become a challenge that companies have to face. How to pan for gold in hot land? Find the best customers within a limited time and reduce business risks while harvesting orders. This series of issues has become the focus of attention for companies intending to expand into the Brazilian market.
Understand market characteristics and make profitable off-season orders
When talking about their impression of Brazil, most people will think of the hot samba music, the football culture surging in the streets, and the colorful flip-flops and fashionable clothes. In the eyes of some export companies, the charm of the Brazilian market is also closely related to its rising economic indicators. Jiangsu Suhao Garment Co., Ltd. will participate in the GOTEX International Textile and Apparel Procurement Exhibition in Sao Paulo, Brazil, for the first time this year. Manager Li of the company told reporters: “In recent years, Brazil’s economic performance has been outstanding in Latin America. In particular, people’s purchasing power levels have increased. A big improvement. The company currently has very little export business to Brazil. Our main purpose of participating in this exhibition is to further understand the market demand.”
The clothing style of Brazilians has always given people a sense of relaxation and distinct colors. In addition to these intuitive feelings, the Brazilian textile and clothing market also has its own characteristics. Because it is located in the southern hemisphere, Brazil’s climate is counter-seasonal to that of European and American countries. This market characteristic is valued by apparel export companies. Shanghai Shenda Import and Export Co., Ltd. currently has 1/3 of its export business concentrated in the US market. Ge Hong, the company’s department manager, said that in addition to being optimistic about the consumption potential of the Brazilian market, off-season orders also allow it to tap into another value of working in this “hot land.” “Brazilian consumers like to follow European and American fashions, and the clothing sold on the market is counter-seasonal. For our company, orders that are counter-seasonal to the European and American markets can make full use of production capacity and effectively improve production efficiency.” Ge Hong explain.
This sales pattern of “spring and summer products are sold in autumn and winter, and autumn and winter products are sold in spring and summer” is defined as off-season purchasing. With foreign trade business generally experiencing a downturn and peak seasons shortening, off-season products that are in urgent demand often become the focus of export companies. There are not a few clothing manufacturers who have the same idea as Ge Hong. They also believe that under the poor international economic situation, they might as well pay more attention to the sales market of off-season products like Brazil, which can bring more profits to the company. .
Leverage brand exhibitions to reach effective customers
Clothing companies have discovered business opportunities for Brazilian merchants to purchase off-season. For upstream yarn and fabric companies, the Brazilian market also contains opportunities. In recent years, Brazil’s total annual imports of textiles and clothing have been around US$6 billion, with products from China currently accounting for about half. From the perspective of imported product categories, Brazil’s main imported varieties include chemical fiber/blended fabrics, chemical fiber/cotton woven clothing, chemical fiber yarns, industrial/functional textiles, auxiliary materials and accessories, etc.
The main products of Tongling Huayuan Hemp Industry Co., Ltd. are hemp yarn, hemp gray cloth, etc. At present, the company already has some stable customers in the South American market. However, when it first opened up the market, it was difficult for the company to find a reliable and efficient platform to reach high-quality customers. “In the past few years, we have also participated in some textile and clothing exhibitions held in Brazil, but the overall effect was not very good. This year we chose to participate in GOTEX mainly because it is our industry’s own exhibition, and we have high expectations for the organizers. I also trust my ability to organize exhibitions.” Manager Zhang of the company commented that the exhibitions he participated in in Brazil in the past were not very “formal”, so he has great expectations for the effect of this exhibition.
Two years ago, there was no exhibition in Brazil that suited the development needs of my country’s textile and apparel industry and adapted to the development trend of the textile and apparel supply chain. Even export companies that were looking forward to this “hot land” could only “singles” Look for opportunities in the process of “fighting alone”.
In order to fill the market gap and help companies develop the South American market. In October 2013, the GOTEX International Textile Procurement Exhibition in Sao Paulo, Brazil, was held for the first time, organized by the China Council for the Promotion of International Trade Textile Industry Branch, the China Chamber of Commerce for Import and Export of Textiles and Brazil FCEM International Exhibition Co., Ltd. In order to enable exhibitors to reach more effective customers, the organizers have invested a lot of manpower and material resources in the early stage of organizing professional visitors. According to statistics, the three-day exhibition attracted nearly 5,000 trade visitors. According to the exhibitor questionnaires collected from the exhibition, the vast majority of exhibitors recognized the organization and effectiveness of the exhibition.
Strengthen qualification review and lock in the best customers
This year’s GOTEX exhibition will be held as scheduled on October 27~It will be held in Sao Paulo, Brazil on the 29th. With a display platform customized for Chinese textile and garment enterprises, how to meet high-quality merchants and achieve ideal business results in just a few days will test the business wisdom of the exhibitors.
In fact, not only in Brazil, but also at any overseas exhibition, exhibitors will receive a variety of business cards. Who are the potential long-term partners? Which are the small customers with lower credibility? This all needs to be judged by the company itself. Tips from experienced traders: In the Brazilian market, the official language is Portuguese. If a business is exposed to customers who only speak Portuguese, the company may be small or not a real buyer. Because purchasing staff from large companies usually speak English.
Regardless of whether this method can ensure that all high-quality customers are missed, it at least reminds companies to understand the characteristics of local buyers before going to overseas exhibitions. In Brazil, the copycat and smuggling market is huge, so how to identify high-quality merchants is even more important. Ge Hong from Shanghai Shenda Company said: “In terms of customer selection, we cannot judge just through a meeting at an exhibition. We can only judge the type of customer through the exhibition first, such as an importer or a department store. After returning to China, we will verify the information online based on the business card he provided to reduce risks and select some customers with whom we can cooperate long-term through follow-up contact.”
Use credit insurance tools to avoid trade risks
Regarding the Brazilian consumer market, another feature that must be mentioned is the popularity of installment payments. It can be as small as a pair of socks or as large as a refrigerator, and can be paid in installments via credit card. For home textile products, more than 70% adopt installment payments. This kind of consumption behavior is mainly caused by the fact that Brazil experienced more than 30 years of high inflation from the 1960s to the 1990s, and consumers developed the habit of spending future money.
In terms of international trade, Brazilian companies generally adopt the general trade method when importing from China. The payment method is usually 20% or 30% of the full payment in advance. After shipment, the other party is notified to pay the balance with a copy of the bill of lading or the payment document. However, some Brazilian companies will request installment payments from their suppliers for various reasons. In this regard, some export companies admitted that it is difficult for them to accept such a payment method due to the long account period and high risk of later payment. Ge Hong from Shanghai Shenda Company said that by taking insurance, credit investigation and other methods, trade risks can be effectively avoided without missing business opportunities. “If the customer proposes to pay in installments, we will use the insurance with the export credit insurance company to make a judgment on whether to continue cooperation based on the results of its credit investigation of the customer. This can protect the company’s interests. On the other hand, it will not Some high-quality customers will be rejected because of problems with payment methods,” Ge Hong said.
