Whether your B2B Company is contemplating an international expansion plan to Latin America, or you want to start from scratch in the region, building an effective B2B Market Expansion strategy is essential for the success of your business plan.
Inevitably you will ask yourself how to approach this strategy:
- Which country has the most attractive market for my expansion in the region?
- What is the best strategy to enter and conquer this market?
- What are the costs and risks involved in our market entry and how can we control them?
Although the answers may vary for each type of company, there are some general points you should take into account when planning doing business in Latin America.
Many reasons can lead a company to make the decision to expand into a foreign market. The key objectives would be profit and sales growth, economies of scale or foreign market opportunities, even the interest of the company in exploiting the market possibilities are just some of the fundamental reasons.
In this article, we will share some considerations to take into account to carry out a successful B2B Market Expansion of your Company in Latin America, with which you can optimize your investment of time, money and effort along with the appropriate strategies to meet your objectives.
Why a B2B Market Expansion in Latin American?
Being a promising and growing market, it is a region that has been attracting investors and global companies from all over the world.
Between 2017 and 2019 alone, 17 of the more than 300 so-called “unicorn companies” in the world (Companies such as Facebook, Xiaomi or Uber for example meet these characteristics of companies), arose in Latin America, this according to a survey carried out by LABS that took into account data sources such as: the Brazilian Innovation Platform “District”, the Latin American Venture Capital Association (LAVCA) and CB Insights.
Given this type of acceptance of new business opportunities in the region, and adaptability to new proposals and technologies, expectations are even higher. The region has a technology-driven environment that is ideal for new products and services. It is a very promising market.
A Vast and Diverse Market
It is important to make sure you choose the correct Latin American markets to the B2B Market Expansion / Entry of your company. Latin America can be seen as a homogeneous economic region by foreigners, but the markets of the region differ significantly in terms of population, culture, level of economic development, ease of doing business, regulatory obstacles, etc. Take these actions into consideration:
- Conduct in-depth market research
- Establish communication with contacts who have already done business in the region
- Contact investment promotion agencies in the countries of interest
- Inquire about the economic and political situation of the countries
- Analyze the potential competencies of your company, gathering detailed information is key to understand the market.
With 33 countries in Latin America and the Caribbean, this is a lot of work and probably won´t be very effective. Using the assistance of an expert Marketing Agency in the region can speed up this research process and guide you to the right decision. After all, sometimes the obvious choice of heading to one of the large markets in the region that might seem like the obvious choice is not the best when you think twice about it. It may be preferable to enter a smaller, “easier” country first, in order to gain experience on a small budget, make “cheap” mistakes, learn your lessons with less risk, and then expand into larger markets.
Business Culture based on Relationships
Make conscious and pragmatic decisions in your B2B Market Expansion / Entry strategy, clearly defined and adapted to each country. Some companies adopt opening subsidiaries of their business or working with an internal distributor for example, depending on the conditions of each market of course. But how do you decide which strategy and business is best for the Latin American country you want to enter?
Keep an open mind before making this decision. Don’t assume that the strategy you use in another part of the world will work similarly in the region. Latin American business culture is very relationship-based. Without building a good relationship on a personal level first and meeting regularly face-to-face with your partners and clients, you will have a hard time succeeding. Also, don’t underestimate the language barrier (many people don’t speak English, so you need to be able to communicate in Spanish and/or Portuguese), the time difference, and the fact that emails are often unanswered. All these aspects must be taken into account when choosing your strategy and business model.
Once you have decided on your B2B Market Expansion / Entry strategy and your business model, stick to it, and give it enough time to make it work, take into account the various aspects that you face in the Latin American business culture.
Current E-Commerce boom
Latin Americans are connected and hungry for global products.
During the last few years, e-commerce in Latin America has grown at an accelerated rate. In 2020, Latin Americans started shopping online like never before, due to the social isolation caused by the COVID-19 pandemic and also the high level of digitization.
E-commerce had grown slowly across the Latin American region in recent years, but the measures put in place to prevent the spread of the coronavirus have accelerated progress. Shoppers who were previously reluctant to use e-commerce sites have been on board strongly, and a United Nations investigation suggests that this shift to online shopping is here to stay, even once restrictions are lifted due to the pandemic, creating even greater opportunities for foreign companies.
Lots of talents to draw on
The wide diversity that exists in Latin American countries and their residents allows foreign companies to have a large number of talent at their disposal to incorporate into their workforce. These potential workers are often highly educated and their labor is less expensive compared to North America and Europe.
However, hiring in Latin America involves many considerations and in some areas includes costs that companies do not routinely consider. Consequently, companies seeking to enter the Latin American market need a strategic partner. This can help foreign companies overcome the challenges of doing business in Latin America, including regulatory compliance, payroll, accounting, in addition to confirming the market potential in an area, answering key questions and connecting companies with the best local talent possible.
The Marketing del Bueno team working hand in hand with our clients, has achieved successful B2B Market Expansion within the Latin American market, with the development of optimal strategies and mechanisms to meet their objectives, from increases of 50% in sales through the web, exponential growth in sales of more than $ 1M, segmentation of its databases for contract closings, as well as expansion campaigns not only in Spanish-speaking regions but also in the territory of Brazil.
If you need help planning your marketing strategy in Latin American countries, Contact us!. Marketing del Bueno´s specialists will be happy to help you.
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