Growth in Internet usage drives e-commerce growth in Brazil

Despite the slowdown in Brazil’s economy, many economists remain optimistic about the growth of e-commerce in the country.  A growing middle class coupled with a growing Internet penetration allows for the opportunity for e-commerce expansion. 

      As we approach the 2014 World Cup in Brazil, the local B2C e-commerce industry may see double-digit increase in 2014.  E-Marketer predicts that retail e-commerce sales would lead this double-digit growing industry throughout 2014.

Another factor that will contribute to the e-commerce expansion are the new governmental regulations focusing on online privacy, which will increase the comfort level of Brazilian Internet shoppers.

        On-line tourism sales have also played an important role in the growth of Brazilian e-commerce.  According to e-Marketer, this segment represented close to 1/3 of the country’s total e-commerce sales in 2012.

        Although, the expanding middle class plays a big role in the growth of the Brazilian e-commerce industry, the majority of the sales will continue to be generated by the upper class segment as they have more disposable income and are more Internet savvy.  

       Nevertheless, the current market still offers several opportunities for proven foreign e-commerce models to be replicated in Brazil and leverage the love Brazilians have for shopping on-line.   

Start-Ups in Brazil Remain Optimistic

      Numerous young companies have struggled to show sustainable profitability despite early rapid growth.  Some blame the business environment and the costs of doing business such as legal costs, taxes, employment costs and a lack of logistics infrastructure, which combined make operations more difficult.  The fact that GDP growth slowed last year to 0.9%, compared with 2.7% in 2011 has not helped entrepreneurs either.

     Initially, most investments made by foreign venture capital firms consisted of Brazilian Internet or technology companies looking to replicate existing web business models that proved to be successful in the United States or Europe.  Investors wrongly assumed that the Brazilian market was large enough to support multiple successful companies. Consequently, the market was flooded with excessive competition for limited market share.  However, other investors point to inefficiencies on the execution and operations of companies as the main reason for their poor performance.

     Despite the difficult environment, Brazilian start-ups still have foreign supporters.  Even Silicon Valley investors who have seen ideas fail are still willing to make large bets, believing that the short term will be difficult, but the long-term projections remain highly favorable, as the market grows and consumer purchasing power increases. 

     According to the Brazilian consulting firm E-bit, overall e-commerce grew by 20% in 2012 and mobile represented only 2.5% of transactions, making mobile e-commerce the next big opportunity for growth.  Other sectors in Brazil that remain overlooked and underfinanced but are starting to see more investments are health care, education and innovation. 

We also note the growing interest of Chinese Internet companies looking to duplicate in Brazil the same success that they’ve had in China.

     Overall, as move closer to the World Cup and Olympics, the country show signs of above average GDP growth and the mood for foreign investors still remains positive and more FDI is expected the next 3-5 years to further empower the growth of the Brazilian economy.

 

 

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How To SellIn LinkedIn

As LinkedIn’s profile states on its own company page – “LinkedIn takes your professional network online.” With 135M+ users and 11k new members every 90min, Linkedin has dominated the professional social media space as we all know it.

Aside from connecting with past lunch buddies from previous jobs, one might ask “what can a sales person do on LinkedIn?” As I always tell my students, LinkedIn allows you to do the most important business task ever - SELL!

So then, how should one sell via LinkedIn? If I may add another MBA framework, to a world that doesn’t need another self-proclaiming framework, I would like for you to consider “The 5Cs” of How to SellIn LinkedIn:

CONNECT-->CREATE-->COLD-TWEET-->COLLABORATE-->CLOSE

Let me explain…

CONNECT: Just as a sales person needs to leave the office to meet new prospects, he or she also needs to connect with new prospects on-line.

CREATE: In the era where “Content is King,” a sales professional also needs to be a source of knowledge and information. A well-crafted editorial agenda comprised of engaging & “non-salesy” content can position you and your sales team as a credible resource in your industry.

COLD-TWEET: Rule #1 is to never ever cold call on LinkedIn, aka send a request to someone you don’t know, trust me it looks horrible! However, finding a prospect’s Twitter handle, aka username, following them and eventually replying to one of their clever tweets can be a very classy way to start developing a relationship.

COLLABORATE: Get your sales team to cooperate and collaborate on LinkedIn. Develop discussion groups for teammates to exchange contacts, information and insights. Use the team’s collective LinkedIn connections to generate more leads and don’t forget to recommend one another.

CLOSE: Considering that any given prospect has a never-ending number of options at their fingertips, focus on being an expert and educating the prospects before they have a need for a solution. If you manage the process correctly, the prospects will be closing on you instead of the other way around!

So my dear sales friends, I hope this helps you leverage your sales on LinkedIn, and remember, as Aristotle once said, “A friend to all is a friend to none.” With that in mind, go out there and focus on making ONLY relevant LinkedIn connection, sharing your knowledge and the sales will follow!

Don't Stain Your Brand with Greenwash

As I see brands claiming to have won the “Green” award, I would like to share with you a few principles to keep in mind in order to protect your brand from taking home the “Greenwashing” trophy.

• Proof = Truth – All claims should have scientific proof.
• Don’t Hide and Emphasize – Don’t try to hide some facts and emphasize other information. Your audience will notice and the truth behind your message will come to light. Tell the whole story!

• If you are not different, it doesn’t make a difference – If you are claiming something every other company is doing you are not special.
• The Label Matter – Get a neutral and respectable third party organization to endorse your claim/stamp/label.
• Educate your Audience – If you use a term, i.e. Fair Trade, provide a definition on your label for that or any other term and or claim.

As this blog post is dedicated to my UCLA Green Marketing Strategy students, I would like to share and informative video I found on YouTube made by grenkblog.com. Please watch the video and let me know how you would avoid the “Greenwash” trophy.

Can a Chinese Brand make it in America?

I think it can! A great example is Lenovo, who acquired the former IBM PC Company Division for approximately $1.75 billion, and is currently the largest seller of PCs in China with 28.6% market share. The Chinese PC maker was ranked sixth with a 5.6 percent market share in the U.S. market in 2010, with sales outpacing all competitors in the US.

I believe Chinese brands have to do the following to compete in the US Market:

#1- Upgrade quality standards.

#2- Communicate NEW quality standards through better advertisement and promotional efforts.

#3- Develop a customer relationship management system with “the customer is always right” mentality.

#4- Reevaluate their pricing strategy, as we all know it, in America cheap = low quality.

In addition, the Chinese American community represents the largest group of Asian Americans, accounting for 22.4% of the Asian American population in the US. Therefore, utilizing the following Chinese symbols in product development to communicate Chinese heritage can be a competitive advantage in the American market:

Red: For the Chinese, the color red symbolizes good luck and happiness.

Chinese Dragons: A symbol of authority, might and power. Chinese people consider themselves to be descendants of the dragon and proudly communicate that in several forms.

Chinese Characters: There are over 80,000 Chinese characters that illustrate the Chinese culture.

Given that this blog post is dedicated to my dear Global Marketing Strategy students at UCLA, I am interested in knowing what you think a Chinese Brand ought to do to make it in America?