Brazil: Direct selling consumer goods to Brazil

Brazil is the type of country that sellers of consumer products love; Brazil is the world’s 6th largest economy bigger than the UK with 3 times the amount of population.  In the last 15 years the Brazilian Economy has more than doubled, income has nearly tripled; over 40 million Brazilians have been pulled out of poverty now wealthy Brazilians are flexing their financial muscle and turning shopping into a national sport. Unlike many western economies Brazilians are earning more than they ever have.

The growing middle class is driving opportunities in the mid to high end of Consumer products but there are also excellent opportunities in Brazil’s favelas where people are starting to have more money to spend on consumer products as Brazil’s rapid economic growth trickles down to Brazils Working class. With demand for Lipsticks to yogurts to shoes demand is increasing and one of the most successful ways to sell into the favelas is through direct selling.

Companies such as Food giants Nestle to Yakult are growing their business in Brazil through door to door selling, it’s a regular sight-seeing sales lady pushing their branded carts through the streets carrying on a tradition in Brazil which is deep rooted. It’s estimated that in Brazil 28% of all Cosmetics, Fragrances and Toiletries are sold via this direct selling route which is a considerably large amount when compared to other regions such as 12% in the Asia Pacific, 7% in North America and 4% across Western Europe.   Several factors are behind why door to door selling is so popular in Brazil the main one being cultural with the Latin American way of favoring relationships, talking and taking advice from friends rather in just plucking from shelf’s. This is a way of selling consumer products into Brazil is set to continue with Brazils growing middle class, with increasing wages and good access to credit then the consumer boom in Brazil is very sustainable for now and into the future.

Sales Reps Brazilian style tends to differ then other countries with exclusivity cursory some operating out of smaller shops with catalogues, more than half of them work on a commission only basis  using this to supplement income from other jobs.  The strength of this model is seeing a wide range of International brand names enter the Brazilian market using this micro distributor route into the market. Micro distributors rely on team sales reps to knock on doors to support the close customer relationship that is important to succeed in Brazil. How it normally works for companies using the Micro distributor’s model is the supplier sells to the distributor with a credit time to pay for the goods, the distributors sells to the local Sales Rep with again a credit and then often the Rep will give a credit to the consumer with a 1 to 2 week period to pay for the product. The whole system is based on credit and more importantly trust which is why the local sales rep knowledge of the customer is key to the success of direct selling in Brazil.

In the future internet selling is considered a threat to this model but this Micro distributor direct selling model in Brazil is very deeply ingrained in the culture of Brazil. For companies wishing to operate successfully in Brazil finding quality local Partners is paramount to success  and figuring out how to sell to the Brazilian growing market is better than focusing on the cash strapped European market.