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March 30, 2012
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CONTINENTAL SHIFT:Bringing the world to Brazil




John Hooker looks at the business culture of one of the new powerhouses of the global economy to provide key insight into how the meetings and events industry should approach this growing market.
 

Many see the BRIC (Brazil, Russia, India and China) economies as a growing source of business – a meetings and events oil well – given that some of the traditional markets for events and luxury travel organisers have the potential for flat growth in 2012.

Much has been written about the growth of India and China, in particular, but in South America, Brazil is fast becoming the powerhouse of the region and this is a country with a strong European heritage, so you would think that this would be an easy market to conquer. There is certainly opportunity, but this is an environment where you need to have your eyes wide open to the business culture and etiquette.

Brazil is certainly buying, and if you were at EIBTM in Barcelona back in November you would have seen Brazilian buyers with briefs in their pockets.


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Economy on the march: Brazil is now the sixth largest economy in
the world and Sao Paulo is the world's seventh largest city

 

In January, Brazil overtook the UK as the world’s sixth biggest economy. The US, China, Japan, Germany and France occupy the top five places. By 2020 Brazil, India and Russia are on target to become the biggest economies in the world. However, unlike China, Brazil is a democracy and this makes it far more attractive to investors. This is why there has been such growth by international corporates, especially around Sao Paulo, which also happens to be the largest city in South America and the seventh largest in the world.

One of the most interesting facts for the events and travel industry is the phenomenal growth in the professional and middle classes. This has led to a rise in consumerism and the desire to travel as a result. In addition, corporate companies are using motivation techniques, such as incentive travel programmes, to increase sales and incentivise sales teams and dealer networks.


In 2011, outbound travel was up and estimated at 13% – on par with 2010, when it rose by 14%. These are impressive figures made possible in part by the increasing number of direct air routes. One of the latest is Rio de Janeiro from Dubai with Emirates. When Turkish airlines introduced their direct service, Turkey soon became a popular destination for Brazilians.

Making the right connection

Brazil has a business culture based on relationships and these take time to build. It is not a market where you can parachute in on a sales week and expect to come away with enquiries and/or firm orders. Brazilians are very welcoming; enjoy communicating and exchanging ideas, but in order to build trust, which is what is required, you need to invest time to build long-term relationships as this is what is likely to lead to business.

This is still a country where the business lunch and/or dinner counts, so forget the diet as you will find some of the finest cuisine in the world especially when it comes to meat dishes.

This is also quite an accessible destination. Sao Paulo, for example, is 11 hours from Europe, nine to 10 hours from North America and three hours from Buenos Aires, another economy that is on the march.

If you want to succeed in Brazil, then you have to take a long-term investment view, and that means having a local presence. Helmut Koll, a former German Chancellor, once said: “You can buy from me in any language you like, but you only ever sell to me in German." There is a similarity with Brazil.

Portuguese is the language and you will be surprised by the preference for this over spoken English or even Spanish when dealing with Brazil. To make it even more interesting, Brazilian Portuguese (BR) does vary from European Portuguese in the same way that US and UK English differs. So does pronunciation, which is why some Brazilians don’t understand a Portuguese when they speak.

Investing in Brazil
There are a number of people who are taking the plunge by investing in Brazil and in a variety of ways, too.

Diogo Assis, chairman of events by tlc, spent over 12 months developing his business model before opening a Brazilian operation in Sao Paulo in 2011 to capitalise on the growth in in-bound business. He has also seen the growth in outbound business, especially for Portugal, where they also have a base. This now accounts for around 30% of his Portugal event programmes and is growing. However, there was some confusion as to the role of the Brazil office with local clients and this is why he has chosen to place the sales responsibility with a specialist sales operation in Sao Paulo called the collection.

“While we have great relationships with our Brazilian clients, this is a culture that still works on face-to-face contact and that is just not possible to maintain efficiently and economically from Lisbon," comments Assis. “You need a local presence that is trusted."

The local presence also has to cover the four principal cities where event, incentive travel and luxury travel agents are based and each is a flight away, not surprising given the size of the country.

Victoria Efremova, head of the MICE department of Moscow-based KMP DMC has seen a growing interest from Brazil. One of the reasons is that Brazilians do not need a visa to visit Russia (and yet they need one to visit the USA) and there are direct flights via a number of European and Middle East gateways, too.

“We decided to increase our presence in Brazil partly because of our concern on the continuing uncertainty with the Euro zone," explains Efremova, “It is about spreading risk, but recognising that Brazil represents a real return on investment opportunity."

Turkey has become a firm favourite with Brazilians. There are 59 flights a week from Sao Paulo connecting to Istanbul. The main interest for Brazil is the culture and the wide choice of locations from city to beach – along with the unusual, such as sights like Kapadokya.

Birgul Ozden, vice president of Istanbul-based MEP, has built an enviable reputation for innovation and quality when it comes to designing event and incentive travel solutions.

“Having a local presence is one thing, having a local team who really understand our service standards and how we make a difference is crucial,” she says. “We wanted to ensure that the Turkish experience starts in Brazil."

Technology is another key element to success in Brazil. Brazilians are very likely to have the latest app and utilise social media. Engaging presentations are essential and you probably have no more than five minutes when starting to present to make your mark on your prospect. They won’t offend you by saying so, but next time around that meeting will not be so easy to secure.

The collection, the Sao Paulo based sales office for a number of destinations, including the above, has created a password-protected client area for buyers to access the information they require and to download their proposals from each of the destination members. However, given the different time zones represented by the collection, having a comprehensive gallery of information, images and video clips adds value irrespective of the time of day.

“If you want to bring your world to Brazil”, says collection sales director Joana Pais, “you need to impress with technology, establish trusting relationships and have a product or service that appeals to Brazilians as they are quite specific in their requirements.”

Brazil is certainly in the spotlight and is only two years off hosting the 2014 World Cup, followed by the Olympics in 2016. The world will certainly be coming to Brazil for these global events, but in the meantime, Brazilians are travelling the world and it is this world that offers long-term opportunities.


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